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Indian stock markets likely to be choppy; auto stocks, Future Retail in focus

On Friday, the Sensex settled 765 points lower to a little below 57,700. Nifty50 index shed over 200 points to end below the 17,200 mark. (Photo: Reuters)Premium
On Friday, the Sensex settled 765 points lower to a little below 57,700. Nifty50 index shed over 200 points to end below the 17,200 mark. (Photo: Reuters)

  • Banks fearful of a loan default have held talks with Future Retail Ltd as they fear the troubled retailer may not be able to pay its dues on time. Since the loan has been restructured once already, a default would mark it as a failed recast, forcing them to make provisions of 25% once it turns bad

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MUMBAI: Markets are likely to be choppy on Monday, with trends SGX Nifty trends suggesting a soft opening for Indian benchmark indices. Investors are expected to be cautious ahead of Reserve Bank of India's monetary policy statement this week.

Asian share markets lagged a bounce in US and European futures on Monday, while bonds surrendered some of their recent gains and oil rallied as Saudi Arabia raised its crude prices.

November's mixed US jobs report did little to shake market expectations of a more aggressive tightening by the Federal Reserve, leaving a week to wait for a consumer price report that could make the case for an early tapering.

Omicron remained a concern as the variant spread to about one-third of US states, though there were reports from South Africa that cases there only had mild symptoms.

Japan's Nikkei eased 0.6%, even as the government considered raising its economic growth forecast to account for a record $490 billion stimulus package.

Wall Street was looking to rally after Friday's late slide, with S&P 500 futures adding 0.4% and Nasdaq futures 0.1%.

Back home, carmakers such as Tata Motors, Honda and Renault are mulling hiking prices of vehicles from January next year given the continuing rise in input costs. Prices of essential commodities such as steel, aluminum, copper, plastic and precious metals have substantially increased over the last one year.

Banks fearful of a loan default have held talks with Future Retail Ltd as they fear the troubled retailer may not be able to pay its dues on time, according to a Mint exclusive. Since the loan has been restructured once already, a default would mark it as a failed recast, forcing them to make provisions of 25% once it turns bad.

The Karnataka high court has issued a notice to the Securities and Exchange Board of India (Sebi) after an investor filed a lawsuit against the markets regulator alleging poor handling of complaints through its grievance redressal system.

While headline US payrolls had underwhelmed in November, the survey of households was far stronger with a 1.1 million jump in jobs taking unemployment down to 4.2%.

For now, short-term Treasury yields are being pushed higher but the longer-end has rallied as investors wager an earlier start to hikes will mean slower economic growth and inflation over time and a lower peak for the funds rate.

Ten-year U.S. yields dived almost 13 basis points last week and were last at 1.38%, shrinking the spread over two-years to the smallest this year. U/S

The rise in short-term rates has helped underpin the U.S. dollar, particularly against growth-leveraged currencies seen as vulnerable to the spread of the Omicron variant.

The U.S. dollar hit 13-month peaks on the Australian and New Zealand dollars but its index was relatively steady on the majors at 96.214 .

The euro eased a touch to $1.1295 , still well above its recent trough at $1.1184, while the dollar steadied on the safe haven yen at 113.01.

In commodities, gold found some support from the decline in longer-term bond yields but has been trading sideways for several months in a $1,720/1,870 range. Early Monday, it was steady at $1,785 an ounce .

Oil prices bounced after top exporter Saudi Arabia raised prices for its crude sold to Asia and the United States, and as indirect U.S.-Iran talks on reviving a nuclear deal appeared to hit an impasse. Brent climbed $1.45 to $71.33 a barrel, while U.S. crude added $1.46 to $67.72 per barrel.

(Reuters contributed to the story)

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