Markets seen choppy as investors assess govt's relief package; Asian stocks flat
The government on Thursday unveiled a ₹2.3 trillion cheap loans programme for farmers to prop up the rural economyMarkets regulator Sebi scrapped fines on listed companies unable to meet the minimum public holding norms
Indian equity markets are likely to be volatile on Friday as investors will continue to weigh the positives of the second round of measures announced under the government's ₹20 trillion economic stimulus package. SGX Nifty, which indicates the movement for domestic equities, suggests flat opening.
The government on Thursday unveiled a ₹2.3 trillion cheap loans programme for farmers to prop up the rural economy ahead of the main summer crop planting season. It also announced a raft of measures to ease the hardships of India’s urban poor who have suffered the most after the economy went idle because of the world's most stringent lockdown. Detailed measures are revealed in tranches and markets await more clarity.
The Reserve Bank of India (RBI) said the government will convert some of its short-term securities, worth ₹30,000 crore, into existing long-term bonds on 18 May. RBI notified on its website that it will switch three bonds maturing in June this year in favour of three bonds maturing in 2024, 2030 and 2060.
The Securities and Exchange Board of India (Sebi) on Thursday scrapped fines on listed companies unable to meet the minimum public holding norms, continuing its efforts to help businesses navigate the current turmoil.
Among global markets, Asian stocks were unchanged in early deals as investors exercised caution about the re-opening of the US economy from covid-19 lockdowns and possibly more stimulus that could fuel a recovery.
US President Donald Trump said he was open to negotiating another possible stimulus bill amid the coronavirus pandemic, but "was taking his time" to see if more federal action was needed.
The Dow Jones Industrial Average rose 1.62%, the S&P 500 gained 1.15%, and the tech-rich Nasdaq Composite climbed 0.91%.
Stock markets have rallied more than 30% since their March lows following unprecedented government stimulus measures and central bank intervention to counter the impact of economic lockdowns. Federal Reserve chairman Jerome Powell quashed talk of US interest rates going negative to kick-start investment.
Optimism over potential stimulus spurred investors to look past a report from the US Labor Department, which showed just under 3 million new jobless claims last week, pushing the seven-week tally well over 36 million.
Investors await monthly data from China that tracks industrial production, fixed asset investment and retail sales. The retail data, to be released on Friday, will be an insightful indicator of China's recovery as its economy reopens.
In commodity markets, oil prices settled higher on Thursday after the International Energy Agency (IEA) forecast lower global stockpiles in the second half of 2020, though worries remain that a second surge in covid-19 infections could occur in coming months.
Brent crude futures settled up $1.94, or 6.7%, to $31.13 a barrel. The US West Texas Intermediate (WTI) crude futures settled up $2.27, or 9%, to $27.56 a barrel.
Against a basket of its rivals, the dollar rose 0.20%, hitting a three-week high. The benchmark 10-year US Treasury notes last fell 1/32 in price to yield 0.6218%.
Reuters contributed to the story.
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