Asian shares rallied on Monday as some semblance of calm returned to bond markets after last week's wild ride, while progress in the huge US stimulus package underpinned optimism about the global economy and sent oil prices higher.
Indian markets are likely to be volatile on Monday while trends in SGX Nifty suggest a positive opening for benchmark equity indices. On Friday, the Sensex tanked 1939.32 points or 3.80% to close at 49,099.99. The Nifty skid 568.20 points or 3.76% to end trading at 14,529.15
Asian shares rallied in early trade as some semblance of calm returned to bond markets after last week's wild ride, while progress in the huge US stimulus package underpinned optimism about the global economy and sent oil prices higher.
Yields on US 10-year notes came off to 1.41%, from last week's peak of 1.61%, though they still ended last week 11 basis points higher and were up 50 basis points on the year so far. The rout owed much to expectations of faster U.S. growth as the House passed President Joe Biden's $1.9 trillion coronavirus relief package, sending it to Senate.
Jaguar Land Rover (JLR) said it would take a one-time write off of 1.5 billion pounds (including cash and non-cash) in the March quarter, as part of its one-time restructuring exercise.
Auto stocks will be in focus as they will release their monthly sales data.
A clutch of banks with significant exposure to farm sector proposed that the government provide an initial corpus of ₹70,000 crore over three years for a fund, which will be structured on the lines of the Credit Guarantee Fund Trust for Micro and Small Enterprises, according to a Mint report. The credit guarantee fund for small businesses makes good losses incurred by lenders up to 85% of the outstanding amount in the event of a default.
Reliance Industries raised its holding in SkyTran to 54.46% from 26.3% on a fully diluted basis for $26.76 million, the Mumbai-based company said in a regulatory filing. The stake is held by RIL’s unit Reliance Strategic Business Ventures Ltd.
The response to the 4G spectrum auction beginning 1 March will set the bar for the minimum price of 5G radio airwaves likely to be sold later this year, said analysts. Though the central government has accepted the base price for 5G spectrum auction recommended by the telecom regulator in August 2018, and has so far not indicated lowering it, a weak response to 4G auctions may push it to reconsider pricing, they added.
Higher U.S. yields combined with the general shift to safety helped the dollar index rebound to 90.917 from a seven-week low of 89.677.
On Monday, the euro was steady at $1.2086, compared to last week's peak of $1.2242, while the dollar held near a six-month top on the yen at 106.57.
Non-yielding gold was still nursing losses after hitting an eight-month low on Friday en route to its worst month since November 2016. It was last at $1,743 an ounce, just above a trough around $1,716.
Oil prices extended their gains ahead of an OPEC meeting this week where supply could be increased. Brent gained 4.8% last week and WTI 3.8%, while both were about 20% higher over February as a whole.
Brent was last up $1.27 at $65.69, while U.S. crude rose $1.22 to $62.72 per barrel.