Stock markets likely to be firm amidst cautious investor sentiment

Stock markets likely to be firm amidst cautious investor sentiment

Mumbai: A view of the BSE building in Mumbai. Photo: PTI (PTI)

Indian markets are likely to be marginally higher on Monday tracking moderate gains in global peers. Trends in SGX Nifty suggest positive opening of Indian indices.

Indian stock markets will remain shut on Tuesday on account of Muharram.

Asian stocks eked out modest gains on Monday, amid a cautious market mood as investors pinned expectations on likely stimulus to support growth in the world’s major economies, which showed further signs of struggle.

MSCI’s broadest index of Asia-Pacific shares outside Japan added 0.1%. Australian stocks edged up 0.1%, South Korea’s KOSPI rose 0.8% and Japan’s Nikkei was up 0.5%. The Dow rose 0.25% and the S&P 500 edged up 0.1% on Friday.

Global equity markets received a lift after China’s central bank said on Friday it was cutting the amount of cash that banks must hold as reserves, releasing liquidity to shore up a slowing economy dogged by the Sino-US trade conflict.

Risk sentiment was also fortified as Fed Chairman Jerome Powell said Friday that the central bank will continue to act “as appropriate” to sustain the economic expansion in the world’s biggest economy.

Broader stock market gains were tempered in the wake of lackluster economic data – US job growth slowed more than expected in August – although even this was seen as a positive factor for equities.

Buoying market confidence on Monday were expectations the European Central Bank would cut interest rates on Thursday in one of the week’s key events.

Back home, shares of Coffee Day Enterprises Ltd (CDEL), will be in focus as the company has put its Sical Logistics unit on the block as it seeks to pare debt, according to a Mint report. CDEL has hired ICICI Securities as adviser for the potential transaction, which could see the group holding company raise 1,000-1,500 crore, the people cited above said on condition of anonymity.

Meanwhile, trade ministers of the 16- member Regional Comprehensive Economic Partnership (RCEP) grouping on Sunday resolved to conclude negotiations for a free trade agreement by the year end while recognizing that growing protectionism may impact negotiating positions of some member countries, despite serious reservations of member countries with India’s position.

Among currencies, the dollar was capped as US yields came off two-week highs after Friday’s soft US jobs report heightened expectations for a Fed rate cut.

The greenback traded at 106.975 yen, off the one-month peak of 107.235 scaled late last week. The euro was steady at $1.1022, weighed down ahead of Thursday’s ECB policy decision and in distance of a 28-month low of $1.0926 set last week. The Australian dollar, sensitive to shifts in broader risk appetite, hovered near a five-week peak of $0.6862 set on Friday.

The 10-year US Treasury yield was at 1.5585% after bouncing to 1.6080 on Friday, its highest since 23 August.

Brent crude oil futures gained 0.5% to $61.85 per barrel. The contract had risen 1% on Friday after the Fed said it would act to sustain US economic growth and was on track to gain for the fourth day.

[“source=livemint”]