Sensex Today Live Updates : Indian markets to open on cautious note

Sensex Today Live Updates : Shares in Asia slipped to a six week-low as traders grappled with tensions in the Middle East, disappointing bank earnings and the prospect of the Federal Reserve keeping interest rates higher for longer.

A gauge for the region’s equities fell, tracking Friday’s drop in US stocks. Benchmarks in Hong Kong, Japan and South Korea all declined while shares in mainland China rose, led by the energy sector.

But global markets showed signs of stability even after an unprecedented attack on Israel at the weekend. Iran said “the matter can be deemed concluded,” and President Joe Biden reportedly told Israeli Prime Minister Benjamin Netanyahu that the US won’t support an Israeli counterattack against Iran.

Futures for US equities edged higher in Asian trading after the S&P 500 suffered its worst session since January on Friday amid a flight to safety. Oil prices eased on speculation that the conflict would remain contained as global benchmark Brent crude steadied to around $90 a barrel.

Meanwhile, aluminum and nickel surged following new US and UK sanctions that banned deliveries of any Russian supplies after midnight on Friday.

Chinese authorities held a key interest rate unchanged while withdrawing cash from the banking system for a second consecutive month. The operation came even after price growth stalled last month, fueling calls for more stimulus.

With investors already rattled by sticky inflation and the prospect of higher-for-longer interest rates, the escalation of the Middle East crisis may inject fresh volatility into markets. As the conflict widens, many say oil could surpass $100 a barrel and expect a flight to Treasuries, gold and the dollar, along with further stock-market losses.

Bitcoin rallied after it sank almost 9% in the wake of the attacks. Stock markets in Saudi Arabia and Qatar posted modest losses under thin trading volumes on Sunday. Israel’s equity benchmark fluctuated between gains and losses at least nine times before closing with a small gain.

As Wall Street’s earnings season kicked off, big banks’ results offered the latest window into how the US economy is faring amid an interest-rate trajectory muddied by persistent inflation.

JPMorgan Chase & Co. and Wells Fargo & Co. both reported net interest income — the earnings they generate from lending — that missed estimates amid increasing funding costs. Citigroup Inc.’s profit topped analysts’ estimates as corporations tapped markets for financing and consumers leaned on credit cards — signs that a prolonged period of elevated interest rates will benefit big banks.

Traders will soon shift to looming economic data as they refine bets on central bank easing cycles, as well as the International Monetary Fund and World Bank spring meetings in Washington. This week, Chinese growth data and Japan, Eurozone and UK inflation readings are due.

15 Apr 2024, 08:39:10 AM IST

Sensex Today Live : Indian markets to open on cautious note, as focus shifts on the tension in Middle-East

Sensex Today Live : Indian shares are set to open lower on Monday, tracking Asian peers, as investor sentiment was subdued after Iran’s retaliatory attack on Israel over the weekend spurred fears of a wider regional conflict.

India’s GIFT Nifty was trading at 22,470.50 as of 8:04 a.m. IST, indicating that the Nifty 50 will open below its Friday’s close of 22,519.40.

Asian shares slumped and gold prices rose as risk sentiment took a hit. The dollar scaled a fresh 34-year high against the yen on growing expectations that sticky inflationary pressures in the United States will keep rates there higher for longer.

Markets in Asia began the week on a cautious footing. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.7% after Iran had, late on Saturday, launched explosive drones and missiles at Israel in retaliation for a suspected Israeli attack on its consulate in Syria on April 1. That marked Iran’s first direct attack on Israeli territory.

The threat of open warfare erupting between the arch Middle East foes and dragging in the United States has left the region on tenterhooks. U.S. President Joe Biden warned Prime Minister Benjamin Netanyahu the U.S. will not take part in a counter-offensive against Iran. Israel said “the campaign is not over yet”.

Japan’s Nikkei slid more than 1%, while Australia’s S&P/ASX 200 index lost 0.6%. Hong Kong’s Hang Seng Index slumped 0.8%.

The escalating tensions also sparked a flight to safety that sent gold rising 0.51% to $2,356.39 an ounce and the safe-haven dollar broadly higher, extending its 1.6% rise from last week.

Oil prices, however, hardly reacted to the news, as traders had largely priced in a retaliatory attack from Iran that would likely further disrupt supply chains. That saw Brent crude futures peaking at $92.18 a barrel last week, the highest level since October.

Brent was last 0.5% lower at $90.01 per barrel, while U.S. West Texas Intermediate crude futures fell roughly 0.6% to $85.13 a barrel. [O/R]

U.S. stock futures, meanwhile, ticked higher, after a heavy selloff on Wall Street on Friday as results from major U.S. banks failed to impress. S&P 500 futures and Nasdaq futures each rose 0.15%.

Elsewhere, U.S. Treasury yields held near their recent highs as traders pared back their expectations of the pace and scale of rate cuts from the Federal Reserve this year. [US/]

The benchmark 10-year yield last stood at 4.5277%, while the two-year yield held near the 5% level and was last at 4.8966%.

A continued run of resilient U.S. economic data, particularly last week’s hotter-than-expected inflation report, has added to the view that U.S. rates could remain higher for longer, and that a Fed easing cycle is unlikely to commence in June.

Futures now point to about 50 basis points worth of easing expected this year, a huge pullback from the 160 bps that was priced in at the start of the year.

A slew of Fed policymakers are due to speak this week, including Chair Jerome Powell, who could give further clarity on the future path of U.S. interest rates.

The shift in rate expectations has halted bitcoin’s blistering rally, after the world’s largest cryptocurrency repeatedly notched fresh records this year thanks to flows into new spot bitcoin exchange-traded funds and expectations of imminent Fed cuts.

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