MUMBAI: Indian equities may rise on Wednesday, tracking firm global markets. Asian stocks joined the global equities rally, while safe-haven government bonds pulled back on Wednesday after Washington delayed tariffs on some Chinese imports in a much-needed relief for markets in the grip of political and economic turmoil.
Wall Street stocks soared overnight as US President Donald Trump backed off from his 1 September deadline for imposing 10% tariff on remaining Chinese imports, delaying duties on cellphones, laptops and other consumer goods in the hope of blunting their impact on US holiday sales.
The surge in US stocks lifted MSCI's broadest index of Asia-Pacific shares outside Japan by 0.4%. Australian stocks gained 0.4%, South Korea's KOSPI advanced 1.2% and Japan's Nikkei rose 0.8%.
Yet the latest bounce has hardly clawed back the sizable losses for equities over recent months, and broad market sentiment remained fragile given that the US-China trade conflict is still far from resolved. Uncertainty around political risks such as the unrest in Hong Kong continue to keep investors on edge.
The year-long tariff dispute between the world's biggest economies has already disrupted global supply chains and slowed economic growth.
Back home, shares of auto companies may be in focus as India’s passenger vehicle industry suffered its worst sales performance in nearly 19 years in July because a slowing economy, higher ownership costs and floods in some states deterred buyers. Sales fell 31% to 200,790 vehicles last month from 290,931 units a year earlier, according to data released on Tuesday by the Society of Indian Automobile Manufacturers (Siam). It was the worst sales performance since a 35% decline in December 2000.
The Employees’ Provident Fund Organisation (EPFO) will seek early redemption of about ₹700 crore worth of bonds of troubled mortgage lender Dewan Housing Finance Corp. Ltd (DHFL) to safeguard workers’ savings. The retirement fund manager will exercise an early exit option to redeem investments in 10-year bonds of DHFL that mature in 2024, said Prabhakar Banasure, a member of the finance investment committee of EPFO.
In currencies, the safe-haven yen pulled back sharply amid the ebb in risk aversion. The Japanese currency is often sought in times of market turmoil and political tensions. The yen stood at 106.450 per dollar, having lost more than 1% overnight when it recoiled from a seven-month high near 105.000 brushed at the week's start.
Boosted by its surge against the yen, the dollar index versus a basket of six major currencies advanced nearly 0.5% the previous day and last stood little changed at 97.778. The euro was steady at $1.1177 after slipping 0.4% against the dollar on Tuesday.
The greenback was also supported as US yields rose on the slight easing in US-China trade tensions, reversing some of their sharp declines seen at the start of the week.
The 10-year US Treasury note last yielded 1.691% after climbing 6 basis points overnight, knocked away from a three-year low of 1.595% plumbed a week ago.
Brent crude oil futures were down 0.4% at $61.06 per barrel, running out of steam after soaring nearly 5% the previous day.
Crude prices jumped on Tuesday as Washington's decision to delay imposing tariffs on some Chinese goods eased worries about a global economic slowdown, at least for the time being.
(Reuters contributed to the story)