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Markets could be volatile as investors eye GDP data; banks, airlines in focus

On Friday the Nifty ended at 15,435.65, up 97.80 points or 0.64% and the BSE Sensex closed at 51,422.88, up 307.66 points or 0.60%. (iStock)Premium
On Friday the Nifty ended at 15,435.65, up 97.80 points or 0.64% and the BSE Sensex closed at 51,422.88, up 307.66 points or 0.60%. (iStock)

  • Professional forecasters’ projections for March quarter gross domestic product (GDP) growth of FY21 range from a contraction of 0.4% to growth of 3.5%, as the Central Statistics Office (CSO) will release its GDP estimates for the March quarter and for the full year on Monday

MUMBAI: Markets are likely to be volatile on Monday while trends in SGX Nifty suggest a soft opening of Indian benchmark indices. On Friday the Nifty ended at 15,435.65, up 97.80 points or 0.64% and the BSE Sensex closed at 51,422.88, up 307.66 points or 0.60%.

Professional forecasters’ projections for March quarter gross domestic product (GDP) growth of FY21 range from a contraction of 0.4% to growth of 3.5%, as the Central Statistics Office (CSO) will release its GDP estimates for the March quarter and for the full year on Monday.

The loans under the Emergency Credit Line Guarantee Scheme (ECLGS), which was earlier provided to sectors such as textiles and auto components, can now be availed of by airlines and hospitals until 30 September or till guarantees for an amount of 3 trillion are issued, the finance ministry said in a statement. Disbursement under the scheme will be permitted till 31 December.

Among key companies, Aurobindo Pharma, Honeywell Automation,, Narayana Hrudalaya, Shilpa Medicare, Jamna Auto Industries, Marksans Pharma, Kolte Patil Developers and Chemcon Speciality Chemicals will declare March quarter results today.

Mahindra and Mahindra (M&M) reported a consolidated net profit of 163 crore for the quarter ended March, following its decision to write-off 849.5 crore for key long-term investments, especially in foreign subsidiaries. It had reported a loss of 3,255 crore in the year-ago quarter.

The Reserve Bank of India (RBI) on Friday imposed a 10 crore fine on private sector lender HDFC Bank Ltd for selling vehicle-tracking devices to its auto loan customers.

In global markets, Asian shares edged higher on Monday, looking to extend their recent rally to a third week should US jobs figures show the expected revival in hiring in May and keep the global recovery on track.

MSCI's broadest index of Asia-Pacific shares outside Japan was a fraction firmer, having rallied 2.2% last week. Japan's Nikkei was flat.

Markets in the US and UK are closed for a holiday, but futures were still trading in Asia with the Nasdaq up 0.2% and S&P 500 ahead by 0.1%.

The main event of the week will be US payrolls on Friday with median forecasts at 650,000 but the outcome uncertain following April's shockingly weak 266,000 gain. That April figure was close to 750,000 lower than forecasts, the largest "miss" in the history of the series.

The Federal Reserve next meets on 16 June and this week will be the last chance for members to talk on policy before the blackout period starts on June 5.

So far, investors have taken the Fed at its word that the labour market needs to improve a lot more before it talks of tapering. That helped yields on US 10-year notes ease to 1.58% on Friday even as data on core inflation topped forecasts.

The economic outperformance of the US has a downside in that it has sharply widened the country's trade deficit and added to its need for foreign funding for an already huge budget shortfall.

The dollar index stood at 90.062 , near a five-month low . The euro was steady at $1.2190 , just off a four-month high of $1.2266 hit last week. The dollar has fared better on the Japanese yen as investors borrow the currency at super-low rates to buy higher-yielding assets. The dollar was last at 109.93 yen after touching a two-month top of 110.19 last week.

China's yuan has gained 1.7% so far in May to trade at three-year highs and breach the psychologically important 6.4 per dollar level.

Oil prices were firm after gaining more than 5% last week to reach two-year closing highs as expectations of a rebound in global demand outweighed concerns about more supply from Iran once sanctions are lifted.

All eyes will be Opec this week as it reviews its supply agreement, and any hint of an increase in output could pressure prices. Brent added 21 cents to $68.93 a barrel, while US crude rose 26 cents to $66.58.

(Reuters contributed to the story)

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