SENSEX
NIFTY 50
Hang Seng
Taiwan Weighted
MCX GOLD FEB 05
MCX SILVER MAR 05
USD/INR
EUR/INR80.0630

SENSEX
NIFTY 50
NIFTY MIDCAP 100
S&P BSE MIDCAP
Hang Seng
Taiwan Weighted
DAX
Nasdaq
MCX GOLD FEB 05
MCX SILVER MAR 05
MCX CRUDEOIL FEB 19
MCX NATURALGAS JAN 25
USD/INR
EUR/INR
GBP/INR
JPY/INR

Sensex ends 746 points lower, Nifty down 1.5%; banking

Global Markets: Asia shares pare losses as China economy rebounds

Oil prices extend gains after US inventory drop

Wrapping 2020 with a subtle depreciation- What’s on the cards for the Rupee in 2021?

Market

Global stocks creep higher on US stimulus hopes, yuan sinks

Updated : October 12, 2020 08:30 AM IST

MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.1 percent in early trade.

Brent crude futures slipped more than 1 percent to USD 42.28 a barrel and US crude futures were down about 1.4 percent at USD 40.04.

Asian stock markets began the week with cautious gains on Monday, as investors clung to hopes for US stimulus spending, while the dollar firmed after a Chinese central bank policy tweak unwound some of the yuan’s steep gains. The People’s Bank of China has scrapped a requirement for banks to hold a reserve of yuan forward contracts, removing a guard against depreciation, which traders said suggested authorities were discomfited by recent gains.

The yuan fell 0.7 percent to 6.7331 in early trade, pulling the Australian dollar 0.2 percent lower to USD 0.7229. The fixing of the onshore trading band at 0115 GMT will be closely watched as a guide to authorities’ stance on the currency’s level.

MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.1 percent in early trade. Australia’s S&P/ASX 200 was 0.1 percent higher and New Zealand’s NZ50 crept up to a record peak. Japan’s Nikkei slipped 0.3 percent.

The Trump administration on Sunday called on Congress to pass a stripped-down coronavirus relief bill, as talks on a more comprehensive plan were again at an impasse. A new USD 1.8 billion White House proposal has drawn criticism from both Democrats and Republicans, yet investors seem optimistic that spending will resume at some point.

”Markets still have high hopes of a large scale stimulus package, and are indifferent about whether it occurs this side of November or not,” said National Australia Bank economist Tapas Strickland. Polls showing Democrat Joe Biden leading Donald Trump in the US presidential race partly underpin that confidence, Strickland said, since the Democrats are pushing harder for spending.

”Markets should be very sensitive to Senate polling over the coming weeks, given still-high expectations for a large scale US stimulus package, which to some extent if not passed before November is contingent on the Democrats flipping the Senate.”

Biden’s poll lead had also helped drive surging yuan gains on Friday, when Chinese markets re-opened after the Mid-Autumn break and currency jumped more than 1 percent in onshore trade.

Investors figured Biden would be less likely to trigger fresh Sino-US trade disputes. The yuan is up 7.2 percent since late May as China’s economy has led the world’s coronavirus recovery. However, Saturday’s move from the PBOC to cut forward reserve requirements, making it cheaper to short the yuan or to hedge against a rise, hints further gains could be tempered.

”The authorities have not stood in the way of yuan strength, but this move could be seen as a sign that they want to slow the pace of appreciation,” said ANZ Bank’s head of Asia research, Khoon Goh. ”We still see scope for further yuan appreciation, especially with China’s strong growth momentum…but the authorities want to encourage more two-way flows, and removing the reserve requirement will help.”

Other currency moves were modest, with early dollar weakness paring a bit. The euro edged 0.1 percent lower to USD 1.1819 and the yen was broadly steady at 105.64 per dollar. The kiwi dipped 0.1 percent with the softer yuan to sit at USD 0.6666.

In commodity markets, oil prices were back under pressure after ten-day oil workers strike in Norway was resolved late last week, likely boosting production.

Brent crude futures slipped more than 1 percent to USD 42.28 a barrel and US crude futures were down about 1.4 percent at USD 40.04. Gold held steep Friday gains at USD 1,930 an ounce as investors stuck with bets that US stimulus would drive inflation to the benefit of bullion.

The US bond market is closed on Monday for Columbus Day.

You May Also Like

Reliance Industries Q3 net profit up 40% to Rs 14,894 crore; revenue at Rs 1.23 lakh crore

Reliance Industries Q3 net profit up 40% to Rs 14,894 crore; revenue at Rs 1.23 lakh crore

Coronavirus news Jan 21 highlights: India’s COVID-19 caseload crosses 1.06 crore

Coronavirus news Jan 21 highlights: India’s COVID-19 caseload crosses 1.06 crore

Bharat Biotech's Covaxin led to 'enhanced immune responses' in phase 1 trials, says Lancet

Bharat Biotech's Covaxin led to 'enhanced immune responses' in phase 1 trials, says Lancet

Trending on CNBC-TV18

Live TV

recommended for you