Sensex, Nifty may be wobbly on weak macro data; Asian shares fall
Mumbai: Indian equities may be wobbly on Friday due to weak macroeconomic data. Stock markets are down globally, with Asian shares starting the month on a weak note.
Asian stocks were off their three-month highs struck this week on fresh concerns over US-China trade prospects and ahead of US economic data. The US dollar eased against major rivals.
Chinese officials doubt that a comprehensive long-term trade deal with Washington and US President Donald Trump is possible, Bloomberg reported on Thursday, citing unnamed sources.
The latest blow to hopes that the world’s two largest economies will reach a deal to end their bruising nearly 16-month trade war comes despite comments from Trump on Thursday that the countries would soon announce a new site for the signing of a “Phase One” trade deal after Chile canceled a planned summit set for mid-November.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.09% on the day, and about 0.5% lower than three-month highs touched Thursday.
The losses in Asia mirrored the fall in global stock markets on Thursday, as MSCI’s gauge of equity performance in 47 countries fell from 20-month highs. The index continued to ease on Friday, trimming 0.07%. Japan’s Nikkei .N225 slid 0.63% in early trade, and Australian shares were 0.12% lower.
News of China’s doubts over a trade deal was “not entirely unexpected”, Greg McKenna, strategist at McKenna Macro, said in a morning note to clients, noting that the fall in equity markets were relatively small.
Back home, the core infrastructure industries’ output—measuring a basket of eight sectors accounting for two-fifth of India’s factory output—contracted to the lowest in at least 14 years, pointing to a deepening industrial slowdown. The gauge contracted by 5.2% in September from a growth of 4.3% in the year- ago period, according to data released by the commerce and industry ministry on Thursday.
India’s fiscal deficit reached nearly 93% of the budget estimate at ₹6.52 trillion at the end of September in the current financial year, government data showed on Thursday. In absolute terms, the fiscal deficit or the gap between expenditure and revenue was ₹6,51,554 crore as on 30 September, according to the data released by the Controller General of Accounts (CGA). The deficit stood at 95.3% of the 2018-19 budget estimate in the corresponding month a year ago.
India’s markets regulator has asked publicly traded banks to disclose bad loan divergences with the Reserve Bank of India’s assessment within a day of receiving a final report from the banking regulator, tightening norms for asset quality disclosures.
Yes Bank Ltd on Thursday said a global entity has made a binding offer to invest $1.2 billion in the cash-starved lender through an issue of new shares, boosting its stock by as much as 35%, even as concerns remain about whether the proposal will pass muster with the banking regulator.
Meanwhile, the yield on benchmark 10-year Treasury notes was a touch higher at 1.6927% compared with its US close of 1.691% on Thursday. The two-year yield, sensitive to market expectations of Federal Reserve policy, was at 1.5279% compared with a close of 1.526%.
The Fed cut interest rates for a third time this year on Wednesday to help sustain US growth, but signaled there would be no further reductions unless the economy takes a turn for the worse.
In the currency market, the dollar was a touch weaker against the safe-haven yen, trimming 0.06% to 107.95. The euro was 0.04% higher on the day at $1.1155, while the dollar index, which tracks the greenback against a basket of six major rivals, was down 0.07% at 97.285 on the day. The dollar index has fallen 0.56% this week.
In commodities, US crude ticked up 0.26% to $54.32 a barrel and Brent crude rose 0.07% to $59.66 per barrel. Spot gold eased, trimming 0.04% to $1,512.57 per ounce.
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