Mumbai: Indian stock markets are expected to be volatile on Monday. In the truncated trading week, markets will likely take cues from corporate earnings that kickstart with Tata Consultancy Services, Infosys and IndusInd Bank reporting their results for September quarter.
Indian companies are expected to report a decline in revenue and profit for the second straight quarter amid a slump in consumer demand that has sent the government scrambling to boost investment and consumption through a raft of measures, including a tax cut for corporates.
Asian shares edged higher on Monday after data showed the US unemployment rate dropped to the lowest in almost 50 years, easing concerns of a slowdown in the world’s largest economy.
MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.25%. Japan's Nikkei stock index rose 0.29%, while Australian shares were up 0.48%
US Treasury yields inched higher as Friday’s data on the US jobs market suggests the Federal Reserve may not need to cut interest rates further. Sentiment around the US economy deteriorated sharply last week after disappointing data on manufacturing and services suggested the trade war was taking a toll, and more rate cuts would be needed to avert a potential recession in the world’s biggest economy.
The modest increase in US jobs eased some of these concerns, but traders warn that downside risks loom large on the horizon. Unemployment rate in the US fell to 3.5% in September to reach the lowest since December 1969. Non-farm payrolls also grew in September, but slightly less than expected.
The focus will shift to the next round of US-China trade negotiations expected in Washington on 10-11 October to see if the two sides can end a bruising year-long trade war that has hurt global growth and raised the risk of recession.
Back home, shares of Yes Bank are likely to be in focus. According to a Mint report, the private lender is in talks with three top technology companies, including Microsoft Corp., to induct one of them as a strategic shareholder as part of the bank’s strategy to get fresh capital infusion and augment its digital ambitions.
The Essel Group which is the promoter of Zee Entertainment Enterprises Ltd (ZEEL) has told its investors that none of ZEEL’s shares were pledged to Russia's VTB Capital Plc, in the structured loan arrangement inked between the firms in September 2017. The development comes after both, VTB Capital Plc and Essel Group, disclosed to stock exchanges on Friday that ZEEL's promoters have created an encumbrance on 10.2 crore shares, translating to a 10.7% stake held by promoter entity Essel Media Ventures Ltd, in favour of VTB Capital.
In the currency market, the yen gained slightly and the yuan slipped after Bloomberg reported that Chinese officials are signaling they are increasingly reluctant to agree to a broad trade deal pursued by US President Donald Trump. The yuan weakened about 0.20% in offshore trade to 7.1285 yuan per dollar. There is no onshore trading as Monday is the last day of China's holiday break. The yen, also considered a safe-haven asset edged slightly higher to 106.78 versus the US dollar and gained to 72.20 per Australian dollar.
The US and China have slapped tariffs on each other’s goods as part of a long-running dispute over Beijing’s trading practices, which Washington says are unfair.
Central banks around the world have been easing policy to offset the negative impact from the trade war. The Fed has already lowered interest rates twice this year, but a strong jobs market suggests further rate cuts may not be necessary. Worries about political instability in Hong Kong could hurt market sentiment after China’s army took the unusual step of issuing warnings to anti-government protesters in Hong Kong over the weekend.
Four months of often violent protests against Chinese rule has pushed the former British colony to the brink of recession and posed a serious challenge to Beijing’s control of the city.
Spot gold, an asset that is often bought during times of uncertainty as a safe-haven, rose 0.26% to $1,508.19 per ounce.
US crude dipped 0.34% to $52.63 a barrel as worries about oversupply regularly weigh on oil futures prices.
(Reuters contributed to the story)