Hela August 27, 2019

Sensex surged nearly 800 points on Monday

Indian stock markets are expected to continue to rise on Tuesday following liquidity support by Reserve Bank of India and firm global cues. The RBI said on Monday that it will transfer 1.76 trillion to the government this fiscal. The additional amount of 86,000 crore that the government will receive this year above its budgeted 90,000 crore as transfers from RBI could be either used to provide fiscal stimulus to a sagging economy, reduce off-balance sheet borrowings or meet the expected shortfall in revenue collections.

Among global markets, Asian stocks tracked global peers higher on Tuesday while safe-haven bonds sold off as signs Sino-US trade hostilities might be easing helped restore investor confidence after the previous session’s rout.

Supporting the market mood, US President Donald Trump on Monday flagged the possibility of a trade deal with China and said he believe Beijing was sincere in its desire to reach an agreement. Global markets had been roiled at the start of the week by new tariffs from the world’s two largest economies.

MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.2% after dropping 1.3% the previous day. South Korea’s Kopsi added 0.8% and Japan’s Nikkei rose 1%.

Equity markets may have found traction for now but the longer-term outlook for risk assets, buffeted repeatedly by trade concerns, remained shaky.

Back home, lenders to Jet Airways (India) Ltd have extended until Saturday the deadline for submitting expressions of interest (EoIs) to invest in the grounded airline to accommodate a potential bidder, which submitted an EoI after the expiry of the deadline, according to a Mint report.

Public sector oil marketing companies — Indian Oil Corp (IOCL), Bharat Petroleum Corp Ltd (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) — that have restricted aviation fuel supply to Air India Ltd at six domestic tier two airports due to non-payment of dues to the tune of 5,000 crore by the national carrier, will not resume fuel supply unless the national carrier assures them in a written communication about its payment plans, according to a Mint report.

In currencies, the dollar held gains made the previous day thanks to a rebound in US Treasury yields. The dollar index versus a basket of six major currencies stood at 98.027, having risen about 0.5% overnight.

The benchmark 10-year US Treasury yield was at 1.530%, pulling back from a three-year low of 1.443% reached on Monday on the back of wide-spread risk aversion.

The greenback traded little changed at 105.990 yen following a 0.7% gain on Monday, when it had brushed an eight-month low of 104.460. The euro was effectively flat at $1.1103 after losing 0.4% on Monday. The Australian dollar, sensitive to developments in China, Australia’s largest trading partner, was steady at $0.6773 following a gain of 0.3% the previous day.

Crude oil prices recovered some ground after significant losses the previous day on the prospect of crude from Iran, currently facing sanctions, hitting the market. Brent crude futures were up 0.4% at $58.94 per barrel after losing 1% the previous day.

Oil prices fell on Monday after French President Emmanuel Macron said preparations were underway for a meeting between Iranian President Hassan Rouhani and President Trump in the coming weeks to find a solution to a nuclear standoff.