MUMBAI: Indian stock markets could see another stellar run on Friday, with SGX Nifty pointing to a higher start for Indian benchmarks. Domestic stocks hit record highs on Thursday, with the Sensex ending just short of hitting 60,000.
Asian stocks rose on Friday and Treasury yields kept renewed optimism about the economic outlook and allayed fears of contagion from the China Evergrande group debt crisis.
Shares surged in Japan and held steady in Hong Kong and China, where Evergrande’s fate remains uncertain in the absence of any announcement of an interest payment on a dollar bond due to be paid on Thursday. Global market unease over Evergrande has faded, but it’s unclear whether Beijing plans to deal with the fallout of a possible default by the world’s most indebted developer.
US futures edged higher after the S&P 500’s biggest two-day gain since July. Wall Street’s advance was led by economically sensitive sectors like energy and finance, as investors embraced the idea that an impending cut in Federal Reserve stimulus shows confidence in the recovery after the pandemic. The dollar was stable and oil continued its rise.
Mining giant Vedanta has announced that it will delist its US depository shares and concentrate all trading of its shares on BSE and NSE. “The company also intends to delist these ADSs and the underlying stocks and terminate reporting obligations under the US Securities Exchange Act of 1934, as amended ….
IT consultancy Accenture forecast first quarter revenue on Thursday that was higher than analysts’ estimates, expecting strong demand for its cloud and security services as businesses delay return to offices due to the variant. Delta. This could increase the shares of Indian IT companies.
The prospect of tightening monetary policy has spurred a global bond selloff. Long-term Treasury yields rose the most in 18 months, as traders advanced their expectations for the Fed’s first rate hike at the end of 2022. The Bank of England opened the door to a rate hike 2021, lowering gilts to 10 years. Yields also surged on sovereign debt in Australia and New Zealand.
Equity investors are encouraged by predictions that the strain of the delta virus and supply chain grunts linked to the pandemic will only cause a temporary setback to the economic reopening. Central banks have also pledged to phase out the stimulus measures. But a continued rise in long-term borrowing costs could undermine optimism if it ends up undermining confidence in the prospects for recovery.
(Bloomberg contributed to the story)
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