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Business News/ Markets / Stock Markets/  Markets may consolidate as global rally pauses, Airtel, IndiGo shares in focus
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Markets may consolidate as global rally pauses, Airtel, IndiGo shares in focus

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.16% from Tuesday's three-month high
  • Investors now expect the Fed to cut interest rates by 0.25 percentage point for the third time this year later in the day
  • Sensex had settled 581 points higher on TuesdayPremium
    Sensex had settled 581 points higher on Tuesday

    A rally in global shares stalled, with Asian markets stuck in tight ranges early on Wednesday, as the prospect of a rate cut by the Federal Reserve was countered by worries a Sino-US first-stage trade deal could be delayed.

    MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.16% from Tuesday's three-month high while Japan's Nikkei slid 0.07% after hitting a one-year high the previous day.

    On Wall Street, the S&P 500 index eked out a record intraday high, led by strong earnings from drug manufacturers such as Merck and Pfizer, though a disappointing profit report from Google parent Alphabet kept the technology-rich Nasdaq in the red.

    Markets had erased gains after Reuters reported a US administration official said an interim trade agreement between Washington and Beijing might not be completed in time for signing in Chile next month as expected. However, the official added that it did not mean the accord was falling apart, which helped limit the damage to overall market sentiment.

    The S&P 500 ended down 0.08% and the Nasdaq Composite 0.59%.

    MSCI's gauge of stocks across the globe gained 0.42% on Tuesday to end at a 21-month high, having rallied 2.6% so far this month.

    For the past few weeks, global equities have drawn support from hopes for a trade compromise between the United States and China, as well as from expectations of further US monetary policy loosening.

    Investors now expect the US Federal Reserve to cut interest rates by 0.25 percentage point for the third time this year later in the day.

    Back home, telecom stocks are likely to be in focus as a government panel will examine the problems faced by telecom operators and suggest ways to revive their financial health, amid plunging industry revenues and mounting debt.

    According to a Mint report, a committee of secretaries (CoS) under the cabinet secretary will consider the demands of telcos and suggest ways to alleviate their financial stress and create a favourable investment environment.

    Bharti Airtel reported a fall in its average revenue per user (ARPU) in the September quarter, with growth in its subscriber base outpacing revenue growth from mobile services in India. It recorded an ARPU of 128 in the September quarter, down from 129 in the June quarter. Airtel’s revenue from mobile services in India was 10,811 crore in September quarter.

    InterGlobe Aviation Ltd, the operator of India’s largest airline, said on Tuesday it has placed an order for 300 Airbus A320neo family aircraft worth more than $30 billion at list prices. This is Airbus’s largest aircraft order from a single airline and will take IndiGo’s total number of narrow-body A320neo family aircraft orders to 730, the Indian company said. IndiGo’s latest order includes the new A321XLR long-range planes that can travel as far as 4,700 nautical miles.

    Meanwhile, fading expectations of aggressive rate cuts by the Fed have lifted the two-year US bond yield to 1.644%, compared with a two-year low of 1.368% set in early October.

    The 10-year US Treasuries yield stood at 1.833%, near a 1-1.5-month high of 1.860% touched earlier this week. That has helped to lift the dollar against the yen. The dollar was traded at 108.87 yen, after having hit a three-month high of 109.07 yen

    The euro stood at $1.11135, having bounced off from Tuesday's low of $1.10735. Sterling was little changed after Britain decided to hold an election on 12 December following Prime Minister Boris Johnson winning approval from parliament for an early ballot aimed at breaking the Brexit deadlock.

    While Johnson seeks to gain a parliamentary majority to ratify his Brexit deal, the election would be highly unpredictable as Brexit has fatigued and enraged swathes of voters, while eroding traditional loyalties to the two major parties, Conservative and Labour.

    Oil prices were little changed, with Brent crude futures up 0.02% at $61.60 a barrel. US West Texas Intermediate (WTI) crude lost 0.13% to $55.47 per barrel.

    (Reuters contributed to the story)

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    Published: 30 Oct 2019, 08:19 AM IST
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