Indian stock markets are likely to be volatile on Thursday following global cues and expiry of futures and options of May series. SGX Nifty, up 0.4% suggests a positive opening for Indian benchmark indices.
Asian shares were mixed in the morning trade as countries are opening up after lockdown. However, investors are cautious after remarks by US Secretary of State Mike Pompeo that Hong Kong no longer warranted special treatment under US law reignited worries about worsening relations with Beijing.
Pompeo said overnight that China had undermined Hong Kong's autonomy so fundamentally that the territory no longer warranted special treatment, a potentially big blow to the city's status as a financial hub.
Some investors worry a punitive US response to China on the issue of Hong Kong could result in a tit-for-tat reaction from Beijing, further straining ties between the world's two biggest economies and further hobbling global growth.
The S&P 500 had closed above 3,000 for the first time in almost 12 weeks, bolstered by bank stocks, as investors hoped that the world economy can recover as it re-opens.
The S&P 500 has leapt about 36% since the global coronavirus pandemic dragged it to the year's low on March 23, but there are concerns the rally may be overdone and susceptible to a protracted pullback given the US economy is mired in its worst downturn since the Great Depression.
Back home, Microsoft Corp. is negotiating an investment of as much as $2 billion in billionaire Mukesh Ambani’s Jio Platforms Ltd, the digital unit of India’s most valuable company, according to a Mint report.
State Bank of India (SBI) on Wednesday said it has decided to automatically extend the moratorium by another three months for all eligible borrowers without waiting for their request.
Lupin, Federal Bank, Ceat and Muthoot Capital Services among others will announce their March quarter results today.
The central government on Wednesday announced its decision to stop sale of its savings bonds that used to give 7.75% interest rate on a taxable basis.
Haridwar-based ayurvedic food and personal care products manufacturer Patanjali Ayurved Ltd.-promoted by yoga icon Baba Ramdev is looking to raise up to ₹250 crore via sale of non-convertible debentures (NCDs), primarily to aid its working capital needs and tackle supply chain constraints caused by the lockdown.
Bond investors seemed to agree more circumspection is needed. Ten-year US yields dipped to 0.6770% from 0.6802% overnight. Although 10-year yields are up from an all-time low of 0.4980% struck in March, they are still a whopping 120 basis points below highs seen in January.
Oil futures took a beating as investors fretted about Trump's response to China. US crude oil futures fell more than 1% to $31.45 early Thursday.
Uncertainty over Hong Kong's future dragged the yuan in offshore trade to a record low of 7.1966 per dollar. It recouped some of its losses by early Thursday and was firmer at 7.1792.
The euro, however, was buoyed by a 750 bullion euro plan to shore up economies hammered by the coronavirus pandemic.
That pushed the euro to an eight-week high and by early Thursday, the common currency had nudged up 0.1% to 1.1014, while the US dollar index was down 0.09% at 98.927.
Gold investors, on the other hand, appeared to shrug off geopolitical risks and focused instead on optimism around the re-opening of the world economy, paring their holdings of the safe-haven metal. Prices extended overnight losses and spot gold traded at $1,708.60 per ounce.
(Reuters contributed to the story)
