Indian stock markets likely to gain as Asian peers rise on stimulus policy2 min read . Updated: 19 Aug 2019, 08:13 AM IST
- Over recent weeks, recession anxiety has led to a shakeout in financial markets
- SBI is extending loan repayment time for stressed automobile dealers by 15 to 30 days amid slowing car sales, a top bank official said
Indian equities may tick higher on Monday riding on optimism in global markets. Asian stocks rose on Monday as hope of more stimulus from central banks around the world and steps being taken by major economies such as Germany and China soothed investors' fear of a sharp global economic slump.
Over recent weeks, recession anxiety - triggered by an inversion in the US bond yield curve - has led to a shakeout in financial markets. That has driven speculation of more support from policy makers, including the US Federal Reserve which last month cut rates for the first time since the financial crisis.
MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.25%. Australian stocks added 0.7%, South Korea's KOSPI advanced 0.5% and Japan's Nikkei rose 0.7%.
Wall Street stocks had rebounded on Friday after a report said Germany's coalition government was prepared to set aside its balanced budget rule in order to take on new debt and launch stimulus steps to counter a possible recession.
Moreover, in a move viewed as a guided rate cut China's central bank on Saturday unveiled key interest rate reform to help steer borrowing costs lower for companies and support a slowing economy caught in the grip of a bruising trade war with the US.
Back home, India’s largest lender State Bank of India (SBI) is extending loan repayment time for stressed automobile dealers by 15 to 30 days amid slowing car sales, a top bank official said.
The bank has an exposure of ₹11,500 crore to auto dealers.
Investment, merger and acquisition (M&A) activity in the roads sector has picked up pace this year as foreign investors pump in millions of dollars to acquire operating roads and developers look to sell assets to pare debt. So far this year, road deals worth around $1.8 billion have been announced. That compares with the entire last year’s deal activity of $2 billion, according to data from consulting firm EY and Mint analysis.
Among primary markets, Spandana Sphoorty Financial Ltd will make stock markets debut on Monday with a share price of ₹856 per share.
In currencies, the yen, a gauge of risk sentiment due to its perceived status as a safe haven asset, weakened for the third successive session. The Japanese currency last traded at 106.440 per dollar, having pulled back from a seven-month peak near 105.000 reached a week ago when events including unrest in Hong Kong and a meltdown in Argentina's markets triggered a fresh bout of anxiety in markets already shaken by the US-China trade war.
Elsewhere in currency market, the dollar index against a basket of six major currencies, hovered near a two-week high of 98.339 climbed on Friday. The index was supported as US Treasury yields bounced back from recent lows in the wake of German stimulus hopes.
The 10-year US Treasury yield stood at 1.575%, having pulled away from a three-year trough of 1.475% marked last week. The euro was steady at $1.1089 while the Australian dollar nudged up 0.15% to $0.6786.
Brent crude oil futures gained 0.68% to $59.04 per barrel, following improved equity markets, with an ebb in recession concerns easing fears of weak global demand for commodities. The longer-term outlook for the crude oil market, however, remained somber, with the OPEC on Friday painting a bearish outlook for oil for the rest of 2019.
(Reuters contributed to the story)