BackMarkets seen weak on China virus scare; Bharti Airtel shares in focus
Asian share markets steadied on Wednesday as investors took stock of the spread of a new strain of coronavirus from ChinaFM Nirmala Sitharaman is likely to set an even more ambitious disinvestment target of ₹1.5 trillion for the year starting 1 April
PremiumIndian stock markets are expected to be marginally lower on Wednesday in line with global peers. Asian share markets steadied on Wednesday as investors took stock of the spread of a new strain of coronavirus from China and weighed the possible consequences of a global pandemic.
Fears of contagion, particularly as millions travel for Lunar New Year festivities, knocked stocks from record levels on Tuesday as investors swapped them for safer assets. The outbreak has revived memories of the Severe Acute Respiratory Syndrome (SARS) epidemic in 2002-03, a coronavirus outbreak that killed nearly 800 people and hurt world travel.
MSCI's broadest index of Asia-Pacific shares outside Japan spent the morning trading either side of flat. Japan's Nikkei opened 0.1% lower, before steadying to trade flat, as did Korea's Kospi index. Australia's S&P/ASX 200 inched 0.3% higher, while the safe havens of gold and US 10-year government bonds handed back some gains.
Overnight on the Wall Street, the Dow Jones Industrial Average fell half a percent and the S&P 500 dropped almost a third of a percentage point, following larger losses in Asia.
In Hong Kong, where the SARS outbreak buffeted the economy, the main stock index fell 2.8% on Tuesday, its biggest one-day decline in over five months. Airline, travel, hotel and casino stocks were the hardest hit, along with China's yuan, which had its worst day since August.
Back home, finance minister Nirmala Sitharaman is likely to set an even more ambitious disinvestment target of ₹1.5 trillion for the year starting 1 April, mostly because many of the strategic sales planned for the current year, including that of Air India, have been delayed.
The strategic disinvestments that are now expected to be completed in the next fiscal include Air India, Bharat Petroleum Corp. Ltd (BPCL), Container Corporation of India Ltd (Concor) and Shipping Corporation of India Ltd (SCI).
Bharti Airtel Ltd has received approval from the telecom department to increase foreign direct investment in the company to 100%, allowing the telecom operator to raise more capital if it so requires. The Reserve Bank of India has already permitted overseas portfolio investors to invest as much as 74% in Bharti Airtel, the company said in a statement on Tuesday.
The Defence Acquisition Council (DAC), chaired by defence minister Rajnath Singh, has shortlisted state-run Mazagon Dock Shipbuilders Ltd and Larsen and Toubro Ltd for the Indian Navy’s Rs45,000 crore submarine project.
Meanwhile, the theme was the same in other markets. US 10-year government bond yields, which fell to a two-week low on Tuesday, rebounded slightly to 1.7848%.
Spot gold was 0.1% weaker at $1,556.00 per ounce.
In currencies, the safe-haven yen eased slightly from the one-week high it touched overnight, although the yuan nursed its losses. In offshore trade, the Chinese currency barely budged from the bottom of its Tuesday plunge, last changing hands at 6.9070 per dollar.
Oil prices also settled back as traders figured a well-supplied global market would be able to absorb disruptions that have cut Libya's crude production to a trickle. Brent futures settled down 20 cents at $64.59 a barrel. US crude fell 20 cents, or 0.3%, to $58.38 per barrel.
(Reuters contributed to the story)
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