Mumbai: Indian stock markets are likely to be volatile on Friday. Asian shares were heading for weekly losses on Friday as conflicting messages on the Sino-US trade war only added to worries for the global economy, while talk of aggressive central bank stimulus drove bond yields to fresh lows.
The US President Donald Trump said on Thursday he believed China wanted to make a trade deal and that the dispute would be fairly short.
Beijing on Thursday vowed to counter the latest tariffs on $300 billion of Chinese goods but called on the United States to meet it halfway on a potential trade deal.
With no settlement in sight, investors chose discretion over valour. MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.17%, down 1.4% for the week. Japan's Nikkei fell 0.5%, making a loss of 1.8% on the week, while commodity-exposed Australia was heading for a weekly drubbing of 2.7%.
Overnight, the Dow rose 0.39%, while the S&P 500 0.25% and the Nasdaq dropped 0.09%.
Back home, shares of Yes Bank Ltd are likely to be in focus as it is planning to raise an additional $600 million from large investors to bolster its capital buffers, according to Mint report. The bank plans to raise more funds after its qualified institutional placement (QIP) offering that closed on Wednesday was oversubscribed. Yes Bank raised about $270 million in the fundraising.
Sluggish sales and mounting stocks of unsold medium and heavy duty trucks—the result of the downturn in the wider economy—are prompting manufacturers to offer heavy discounts to push sales.
Meanwhile, the spectacular rally in bonds remained the main investor focus. Yields on 30-year paper hit an all-time low of 1.916% to be down 27 basis points for the week, the sharpest such decline since mid-2012.
That meant investors were willing to lend the government money for three decades for less than the overnight rate. Such is the gloom that surprisingly strong US retail sales came and went with no impact on the bond rally. Analysts have cautioned that the current bond market is a different beast than in the past and might not be sending a true signal on recession.
All the talk of ECB easing knocked the euro back to $1.1108 and away from a top of $1.1230 early in the week. That helped lift the dollar index up to 98.164 and off the week's trough of 97.033.
The dollar could make little headway on the safe-haven yen, though, and faded to 106.08 yen. The collapse in bond yields continued to make non-interest paying gold look relatively more attractive and the metal held firm at $1,524.90, just off a six-year peak.
Oil prices were trying to bounce after two days of sharp losses. Brent crude futures added 23 cents to $58.46, while US crude rose 33 cents to $54.80 a barrel.
(Reuters contributed to the story)