India stock markets may remain under pressure; Tata Steel, Zomato, Zee in focus

Market


MUMBAI: Indian stock markets may remain under pressure on Thursday while trends in SGX Nifty suggest a weak opening of Indian benchmark indices. 

On Wednesday, the BSE Sensex ended at 60,352.82, down 80.63 points or 0.13% and the Nifty was at 18,017.20, down 27.05 points or 0.15%.

Inflation fears pressured Asian stocks and buoyed the dollar on Thursday after data overnight showed US consumer prices surged at the fastest pace since 1990 last month, boosting the case for faster Federal Reserve policy tightening.

Back home, Tata Steel, Godrej Consumer Product, Piramal Enterprises, HAL, PFC, Zee Entertainment, are among the key companies, scheduled to release their September quarter results today.

Zomato Ltd plans to invest $1 billion in startups over the next two years, founder and chief executive Deepinder Goyal said on Wednesday, even as the food delivery company’s loss widened on higher customer acquisition costs.

Insolvency and Bankruptcy Code (IBC) provisions are “fully applicable” to state-run electricity distribution companies, and the corporate insolvency resolution process (CIRP) can be initiated against them, the power ministry said, potentially allowing creditors to turn the screws on indebted discoms.

Meanwhile, nominal US Treasury yields shot higher, with that on the benchmark 10-year note leaping by the most since February, while real yields, which take inflation into account, dipped to record lows.

Gold jumped to a five-month high and bitcoin hit a record as investors sought inflation hedges.

Oil prices pulled back sharply from near seven-year highs after US President Joe Biden said his administration was looking for ways to reduce energy costs.

MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.85%, led by a 1.19% slide in Australia’s benchmark.

Japan’s Nikkei bucked the trend by rising 0.24%, supported by the yen’s weakness against a resurgent dollar and as US stock futures ticked up slightly.

Overnight though, the S&P 500 tumbled 0.82%, its worst day in more than a month. That marked the first back-to-back declines in a month, after the index closed at a record peak to start the week.

The dollar index , which gauges the currency against six major peers including the yen and euro, hovered just below the high reached on Wednesday of 94.905, a level not seen since July of last year. The greenback added 0.13% to 114.04 yen, up from as low as 112.73 at the start of the week.

The US consumer price index surged 6.2% on an annual basis, with gasoline leading a broad-based increase that added to signs that inflation could stay uncomfortably high well into 2022 amid snarled global supply chains. read more

Inflationary pressures are also brewing in the labour market, with other data on Wednesday showing the number of Americans filing claims for unemployment benefits fell to a 20-month low.

Both the White House and the US Fed Reserve have maintained that prices will fall once supply bottlenecks start easing, with the central bank only last week reiterating that high inflation is “expected to be transitory” as policy makers urged patience.

The money market now prices a first Fed interest rate increase by July.

Benchmark 10-year Treasury yields jumped the most in seven weeks to as high as 1.592% on Wednesday. The Treasury market is closed globally Thursday for a U.S. holiday.

Meanwhile, the yield on 10-year Treasury Inflation-Protected Securities (TIPS) dipped sharply to as low as an unprecedented -1.243% before drifting higher over the course of the session.

(Reuters contributed to the story)

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