The Asian markets edged lower while the US markets ended in the red overnight after treasury yields surged to multi-decade high amid bets that the US Federal Reserve will keep interest rates higher for longer.
Escalating tensions in the Middle East amid the Israel-Hamas war stoked risk aversion trade. Investors will focus on the corporate earnings for further cues.
The Indian equity markets witnessed significant selling pressure on Wednesday, with the benchmark indices ending in negative territory. The 30-share BSE Sensex closed 551.07 points, or 0.83%, lower at 65,877.02, while the NSE Nifty 50 declined 140.40 points, or 0.71%, to settle at 19,671.10.
“Profit booking ensued in Indian markets, spurred by weak global sentiments and escalating Middle East tensions. A sudden rise in the tension has led to instability in energy prices. While the US bond yields were cautiously placed, awaiting the Fed chair’s speech. The initial Q2 earnings disappointments by the IT & financials sector may have prompted attention in the domestic markets,” said Vinod Nair, Head of Research at Geojit Financial Services.
All these factors are presumed to be a knee jerk reaction as the total outlook on the domestic market is stable, underpinned by a healthy Q2 result forecast and favourable fiscal position, he added.
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Here are key domestic and global market cues for Sensex today:
Asian Markets
Asian markets traded lower on Thursday following overnight losses on Wall Street as the US Treasury yields jumped to multiyear high.
Australia’s S&P/ASX 200 traded 1.33% lower.
Japan’s Nikkei 225 declined 1.42%, while the Topix fell 1.18%. South Korea’s Kospi plunged 1.62% and the Kosdaq dropped 2.22%.
Hong Kong’s Hang Seng index futures were lower at 17,569, compared with the HSI’s close of 17,732.52.
Gift Nifty was trading around 19,568 level, as against Nifty futures’ previous close of 19,666, indicating a weak start for the Indian benchmark indices.
Wall Street
US stock market indices ended sharply lower on Wednesday as Treasury yields rose. Mounting tensions in the Middle East stoked risk aversion.
The Dow Jones Industrial Average dropped 332.57 points, or 0.98%, to 33,665.08, while the S&P 500 declined 58.6 points, or 1.34%, to 4,314.6. The Nasdaq Composite ended 219.45 points, or 1.62%, lower at 13,314.30.
Among stocks, Procter & Gamble shares gained 2.6%, while United Airlines Holdings shares plunged 9.7%. Morgan Stanley shares ended 6.8% lower, while Tesla shares ended down 4.8% and Netflix shares closed 2.7% lower.
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US single-family housing starts rebound
US single-family homebuilding rebounded sharply in September, boosted by demand for new construction, Reuters reported. Single-family housing starts, which account for the bulk of homebuilding, increased 3.2% to a seasonally adjusted annual rate of 963,000 units last month, the Commerce Department said on Wednesday.
Data for August was revised to show starts dropping to a rate of 933,000 units instead of 941,000 units as previously reported.
Japan’s records trade surplus
Japan’s exports rose 4.3% in September from a year earlier, Ministry of Finance (MOF) data showed on Thursday, up for the first time in three months. The figure beat a 3.1% increase expected by economists in a Reuters poll. It rebounded from a 0.8% fall in August.
Imports fell 16.3% in the year to September. The trade balance came to a surplus of 62.4 billion yen ($416.78 million), versus the median estimate for a 42.5 billion yen deficit.
US Treasury yields surpass 4.9%
The yield on 10-year notes rose 4.9 basis points to 4.896% after hitting 4.928%, the highest for the benchmark Treasury last seen in July 2007. The two-year’s yield, which reflects interest rates expectations, was down 0.6 basis points at 5.208% after setting a new 17-year high on Tuesday.
Disney to break out sports revenue in financial report
Walt Disney will break out its sports programming revenue from the fourth quarter onwards following a restructuring of the company announced earlier this year, Reuters reported.
Results from Disney’s media and entertainment business will be reported in two segments: entertainment and sports. Sports will include ESPN and ESPN , Star-branded sports channels in India, and fee earned from licensing sports content, while the entertainment segment will include its linear networks, streaming services, and revenue earned from licensing films and television content.
(With inputs from Reuters)
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Updated: 19 Oct 2023, 07:00 AM IST