Home / Markets / Stock Markets /  Indian markets focus on RBI monetary policy, Asian stock slightly up

Mumbai: Indian stock markets are likely to take cues from Reserve Bank of India's commentary on monetary stance. All eyes are on the RBI’s monetary policy committee which will announce its policy decision today. The central bank is widely expected to reduce key interest rates.

Asian stocks edged higher on Friday, thanks to gains on Wall Street, but the mood was cautious before a key US job report that could help determine whether the Federal Reserve cuts interest rates further.

Investors have been caught out by a set of weak US data this week, including surveys on services and manufacturing sectors, deepening fears the Sino-US trade war is starting to hurt growth in the world’s biggest economy.

MSCI's broadest index of Asia-Pacific shares outside Japan ticked up 0.16%. Japan's Nikkei stock index rose 0.04% and Australian shares advanced 0.29%.

US stock futures cell 0.16% in Asia on Friday, though that followed a 0.80% increase in the S&P 500 on Wall Street overnight on hopes that future Fed rate cuts will support corporate profits. That sentiment was underscored by a frail performance of world stocks in recent weeks, hurt by political uncertainty in the United Stated and Hong Kong, geopolitical tensions in the Middle East, Brexit and a drumroll of weak global data.

In Asia, excluding Japan, equities were on course for the third weekly decline, their worst performance since four weeks of declines ended 16 August.

Back home, promoters of debt-ridden Housing Development and Infrastructure Ltd (HDIL) Rakesh and Sarang Wadhawan were arrested on Thursday by the economic offences wing (EOW) of the Mumbai Police on charges of financial fraud for their role in the Punjab and Maharashtra Co-operative (PMC) Bank scam.

Also watch: Five things to watch out for from RBI policy

Yes Bank chief executive Ravneet Gill said he is not concerned about the bank’s exposure to Indiabulls Housing Finance Ltd despite the mortgage lender suffering back-to-back setbacks, including a court decision to examine fraud allegations and the central bank deciding to put curbs on a bank it plans to acquire.

US Treasury prices fell slightly but two-year yields remained near the lowest in two years due to growing signs the United States is feeling an economic chill from its trade war with China.

The dollar traded near a one-month low versus the yen, while it was stuck near a one-week trough versus the euro as traders increased bets that the Fed will have to cut rates further to keep growth in the US economy on track. However, some traders are braced for a disappointing result after the surprisingly soft data earlier this week on US manufacturing, job creation, and the services sector.

The two-year yield, which tracks expectations for US monetary policy, rose slightly to 1.3941% in Asia but was still close to a two-year low of 1.3680%.

The dollar edged lower to 106.85 yen, close to a one-month low of 106.48 yen reached on Thursday. The euro was a shade higher at $1.0942, also near a one-week high.For the week, the dollar was down 1.01% versus the yen and off 0.3% against the common currency.

US crude rose 0.11% to $52.51 a barrel. Oil futures on Thursday touched the lowest in nearly two months as weak US economic data increased concerns that excess supplies will push prices lower. For the week, US crude futures were on course for a 6.1% decline, which would be the worst performance since 19 July.

Spot gold, a safe-haven asset that investors often buy during times of heightened risk, rose 0.17% to $1,507.20 per ounce, on course for a 0.73% weekly gain.

(Reuters contributed to the story)

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