MUMBAI: Markets are likely to be under pressure on Monday while trends in SGX Nifty suggest a weak opening of Indian benchmark indices. On Friday, the BSE Sensex ended at 53,140.06, down 18.79 points or 0.04%. The Nifty closed at 15,923.40, down 0.80 points.
Asian shares slipped to a one-week low on Monday and perceived safe haven assets, including the yen and gold, edged higher amid fears of rising inflation and a surge in coronavirus cases, while oil prices fell on oversupply worries.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.1% for a second straight day of losses to 677.45, a level not seen since July 12. The index was on track for its biggest daily percentage drop since July 8.
Oil prices stumbled more than 1% after an agreement over the weekend within the Opec+ group of producers to boost output at a time when the outlook for demand is still cloudy.
Global economic growth is beginning to show signs of fatigue while many countries, particularly in Asia, are struggling to curb the highly contagious Delta variant of the coronavirus and have been forced into some form of lockdown. The spectre of elevated inflation, which the market has long feared, is also haunting investors.
Economists at Bank of America downgraded their forecast for US economic growth to 6.5% this year, from 7% previously, but maintained their 5.5% forecast for next year.
US Federal Reserve chair Jerome Powell has repeatedly said any inflation flare-up is expected to be transitory, indicating monetary policy will remain supportive for some while yet.
Among key companies HCL Technologies, HDFC Life Insurance, ACC, Nippon Life India Asset Management, Indian Bank and Alok Industries will announce June quarter earnings today.
Reliance Retail Ventures Ltd (RRVL) will acquire 66.95% in Just Dial Ltd for ₹3,497 crore, giving the retail arm of India’s most valuable company access to a database of millions of merchants and other users. Reliance Retail will be classified as a promoter of Just Dial post this deal, it said on Friday.
The country’s largest private sector lender HDFC Bank on Saturday reported a 14.36% growth in its consolidated net profit at ₹7,922.09 crore. The June quarter profit has declined when compared with the preceding March quarter’s ₹8,433.78 crore, as per bank’s regulatory filings.
In primary markets, road sector contractor GR Infraprojects, and specialty chemical company Clean Science & Technology will make stock exchange debut on Monday.
Action in the currency market was muted on Monday. The dollar was mildly firmer against a basket of major currencies at 92.712.
Against the safe haven yen, the dollar was down 0.2% at 109.90, edging closer to the recent one-month trough of 109.52.
The euro was mostly flat at $1.1801.The risk-sensitive Aussie slipped to $0.7372, the lowest since last December during early Asian trading.
Equity performance in recent days underscored investor nerves.
MSCI’s all-country world index, a gauge of global shares scaled a record peak last week but finished it 0.6% lower. On Friday, the Dow closed down 0.9%, the S&P 500 slipped 0.75%, and the Nasdaq lost 0.8%.
These losses came despite stronger-than-forecast U.S. retail sales last week, which rose 0.6% in June, contrary to an expected decline.
Elsewhere, gold, a perceived safe haven asset, inched up with spot prices at $1,815.4 an ounce. Brent crude was down 90 cents to $72.69 a barrel. U.S. crude slipped 83 cents to $70.98 a barrel.
(Reuters contributed to the story)
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