MUMBAI: Indian stock markets are likely to remain volatile on Wednesday, while SGX Nifty futures suggest a soft start for domestic benchmark indices. On Tuesday, the BSE Sensex was down 166.33 points or 0.29% at 58,117.09 and the Nifty was down 43.35 points or 0.25% at 17,324.90.
Asian markets were drawn precariously on Wednesday as the world waited to hear from the US Federal Reserve on when it would stop buying assets and start raising interest rates, potentially putting pressure on its peers.
The price of futures has already bottomed out by March and rose 0.25% for the first time in May or June, with rates approaching 0.75% by the end of the year.
Also the final destination for rates will be important as markets are currently only valued for a peak of 1.5-1.75%, a level that will likely not even peak inflation.
The rapid spread of the Omicron version is an added complication that could prompt the Fed to be less aggressive, although recently officials have been more concerned about the persistence of inflation than the pandemic.
Whatever decision the Fed makes, it will set the bar for central banks in the EU, UK and Japan this week, and increase pressure in emerging markets to tighten further.
So many potential losses spooked investors and MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.1% in slow trade. Japan’s Nikkei fell 0.1% and South Korea lost 0.3%. Figures for Chinese retail sales and industrial production are also due after Wednesday, followed by US retail.
Nasdaq futures and S&P 500 futures were all but flat in early trading, with the ground falling overnight.
Back home, multi-business conglomerate ITC Ltd at its analyst meeting on Tuesday did not give any concrete plans for listing and demerger of businesses to unlock value, but did not rule out that they are options for the company. , according to analysts present. chance.
In the meeting, the market was expecting some concrete announcements from the company management in this direction.
State Bank of India on Tuesday said that it has raised 3,974 crore by issuing Basel III compliant bonds to customers. The committee of directors in its meeting held on Tuesday approved the allocation of 3,974 Basel III compliant non-convertible taxable, permanent debt instruments to raise capital, the lender said in a regulatory filing.
Nearly two decades after outlining prompt corrective action to bring panic-stricken banks back to health, the banking regulator on Tuesday said similar rules would be coming soon after several high-profile shadow lenders collapsed in recent years. applicable to non-banking financial companies.
Treasury yields were slightly higher in light of an unexpectedly strong reading for US producer price inflation overnight.
The ten-year yield has declined to 1.44%, but is well below its recent top of 1.693%. The yield curve continued its flattening trend as investors bet on an earlier opening for the Fed to tighten, which will slow inflation in the long run.
The prospect of a short-term rate hike supported the US dollar, particularly against the euro and the yen, where monetary policy is expected to lag.
The single currency returned to the $1.1256 level and again declined to the recent trough of $1.1184. The dollar strengthened near 113.71 yen and resistance at 113.95.
The dollar index rose to 96.554, with bulls eyeing November’s peak at 96.938.
The risk of rising cash rates has been a burden for gold, which offers no fixed returns, leaving it at $1,772 an ounce.
The International Energy Agency (IEA) said as oil prices slumped, the spread of the Omicron coronavirus variant will improve global fuel demand.
US crude fell 34 cents to $70.39 a barrel in early action.
(Reuters contributed to the story)
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