Bearish sentiment pushed bond prices higher. (Photo: Mint)
Bearish sentiment pushed bond prices higher. (Photo: Mint)

Indian stock markets may stay volatile, Asian shares down

  • MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.45% in early trade
  • Shares of Yes Bank will be in focus as the bank's proactive disclosure of potential investors attracted scrutiny on Monday

Mumbai: Indian stock markets are expected to continue to stay volatile on Tuesday while Asian shares skidded in early deals today after US President Donald Trump stunned markets with tariffs against Brazil and Argentina, renewing fears about global trade tensions. Weak US factory data added to the investor gloom.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.45% in early trade, with Australian shares dropped nearly 2%, on track for their worst day in two months. Japan's Nikkei shed 1.1%.

In tweets on Monday, Trump said he would impose tariffs on steel and aluminum imports from Brazil and Argentina, attacking what he saw as both countries' "massive devaluation of their currencies." Contrary to his remarks, both Brazil and Argentina have been trying to strengthen their respective currencies against the dollar.

China said on Monday US military ships and aircraft won't be allowed to visit Hong Kong, and also announced sanctions against several US non-government organizations for encouraging protesters to "engage in extremist, violent and criminal acts."

Worsening the mood, data from the Institute for Supply Management (ISM) showed the US manufacturing sector contracted for a fourth straight month in November as new orders slid. That erased the market cheer from upbeat Chinese factory surveys released over the past few days.

Back home, the National Securities Depository Ltd (NSDL) on Monday unilaterally transferred back to client accounts the securities that Karvy Stock Broking Ltd had illegally pledged with lenders, on a day Bajaj Finance Ltd moved the Securities Appellate Tribunal (SAT) to access the same securities. The NSDL move, which comes as a relief for 90% of Karvy clients, shuts out lenders from accessing client securities pledged with them, unless the appellate tribunal reverses the transfer.

Yes Bank Ltd’s proactive disclosure of potential investors attracted scrutiny on Monday, with analysts questioning the quality of suitors who have promised a total of $2 billion. The troubled private lender on Friday listed the likely investors, including a group of offshore family offices offering $1.7 billion and six other investors offering a total of $300 million.

Meanwhile, bearish sentiment pushed bond prices higher. The yield on benchmark 10-year Treasury notes fell to 1.8172% from a US close of 1.836% on Monday, and the policy-sensitive two-year yield, dipped to 1.606% from its US close of 1.614%.

In currency markets, the dollar rose 0.06% against the yen to 109.04 and the euro was a touch lower at $1.1075. The dollar index, which tracks the greenback against a basket of six major rivals, was at 97.856.

Oil prices continued to rise on expectations that the Organization of the Petroleum Exporting Countries (OPEC) and its allies may agree to deepen output cuts at a meeting this week.

The US West Texas Intermediate crude was up 0.25% to $56.10 a barrel.

Gold was flat on the spot market, trading at $1,462.21 per ounce.

(Reuters contributed to the story)