Mumbai: Stock markets may continue to keep their momentum intact on Monday following firm global cues. Last week markets consolidated, barring Friday when investors rushed to sell shares due to concerns after rating agency Moody's lowered India's outlook.
Asian shares edged higher on Monday after US President Donald Trump said over the weekend that trade talks with China were moving along "very nicely", though uncertainty remained over whether a deal would be signed this year.
Japan's Nikkei was up 0.2% to inch closer to a recent 13-month high. Australian shares rose 0.5% to a two-week high while South Korea's KOSPI was off 0.2%. That left MSCI's broadest index of Asia-Pacific shares outside Japan firmer at 534.63, testing a recent six-month peak.
Trump told reporters on Saturday that talks with China had moved more slowly than he would have liked, but added that Beijing wanted a deal more than he did. That was a more upbeat tone than just a few days earlier when Trump stressed that the White House would not agree to a full rollback of existing tariffs, remarks that hit stock prices and the dollar.
By the close of Wall Street on Friday, optimism had returned to the market as investors bet that Washington needs a deal and it is in the interests of China, too. All three major US indices eked out record closing highs. The Dow inched up a tad while the S&P 500 climbed 0.3% and the Nasdaq Composite added 0.5%. The record closing high by the S&P 500 was the fourth in six sessions as US stocks rallied on hopes of a trade deal.
The US officials said a lot of work remained to be done when Trump announced the outlines of an interim deal last month, and Beijing has since pushed back on US’ demands for big agricultural purchases, among other issues.
Analysts said the outlook for equities was highly dependent on US economic data as a US-China trade agreement would help bolster manufacturing and industrial sectors.
Data on October US industrial production and retail sales, along with the National Federation of Independent Business's monthly small business survey, are scheduled for release this week.
Back home, markets regulator has written to the finance ministry over its recent circular tagging foreign-controlled mutual funds as investment vehicles, two people familiar with the matter said. The regulator’s intervention comes amid fears that the new rules could force several equity asset managers to freeze investment activity and even sell their holdings. The Securities and Exchange Board of India (Sebi) made its representation after mutual funds made their case to the regulator. The anomaly arising from the circular is that retail domestic money invested in the schemes of foreign-owned mutual funds will be counted as foreign money.
Shares of Britannia Industries, Coal India and Hindalco Industries will be in focus as the companies will announce their September quarter earnings result today.
Reflecting growing economic optimism, the benchmark 10-year US treasury yield moved well off its early September lows, and the yield curve between 3-month bills and 10-year notes steepened.
Safe haven gold was near a three-month low touched on Friday after posting its biggest weekly decline in a year. It was last up a touch at 1460.77 an ounce.
Benchmark Brent crude fell 9 cents to $62.42 a barrel, while West Texas Intermediate (WTI) crude slipped 10 cents to $57.14 a barrel.
In currencies, action was muted with the dollar index mostly flat at 98.346 as was the euro at $1.1023. The Japanese yen held at 109.19, while the Australian dollar remained stuck at $0.6859.
(Reuters contributed to the story)