Indian stock markets may be marginally lower, Asian shares cautious

India is set to lose a major trade dispute against the US at the WTO. (Photo: Bloomberg)

Mumbai: Indian stock markets may tick marginally lower on Monday, with global peers having kick-started the week on cautious note.

Asian equities and the Chinese yuan were off to a cautious start on Monday as investors looked to how Chinese financial markets will react to the news that the Donald Trump administration was considering delisting Chinese companies from US stock exchanges.

MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.11% while Japan’s Nikkei shed 0.61%. US stock futures gained 0.24% in early trade, paring back almost a half of Friday’s 0.53% fall in the index.

The offshore Chinese yuan was little moved at 7.1339 yuan per dollar and off Friday’s three-week low of 7.1520 to the dollar.

Chinese share markets will trade only on Monday this week ahead of China’s National Day holiday, which runs until 7 October.

Risk assets took a hit in US trade on Friday following news that the Trump administration was considering radical new financial pressure tactics on Beijing, including the possibility of delisting Chinese companies from US stock exchanges. The delisting of Chinese companies from US stock exchanges was part of a broader effort to limit US investment in Chinese companies.

Still, with trade talks between Washington and Beijing expected to be held 10-11 October, many market players were sticking to hopes such drastic measures on capital markets could be avoided. Surveys on Chinese companies are due on Monday while in the US, key business sentiment data and an employment report will be closely scrutinized on clues on how the economy is faring in the face of the ongoing tussle with China.

The US data on Friday showed consumer spending barely rose in August and business investment remained weak, suggesting the American economy was losing momentum as the trade dispute drags on. Industrial output in Japan and South Korea, released Monday morning, dropped more than expected, underscoring the headwinds from the trade war.

Investors are also keeping a wary eye on US politics. US House Speaker Nancy Pelosi said public opinion is now on the side of an impeachment inquiry against Trump following the release of new information about his conversations with Ukrainian President Volodymyr Zelenskiy.

Meanwhile, India is set to lose a major trade dispute against the US at the World Trade Organization (WTO). According to a Mint report, a WTO dispute settlement panel has upheld a US complaint that export subsidy programmes provided by the Indian government violated provisions of the trade body’s subsidies and countervailing measures (SCM) pact.

The government on Sunday banned exports and imposed countrywide stock limits on onion with immediate effect to bring down prices of the key vegetable that have soared ahead of state elections in Maharashtra and Haryana.

Adani group was preparing to raise as much as $2 billion by selling dollar-denominated bonds as it seeks to refinance a bulk of its local debt and diversify its creditor base.

The initial public offer (IPO) of state-owned Indian Railway Catering and Tourism Corporation (IRCTC) will open for subscription today. The issue with price band of 315-320 will close on 3 October. The share sale is a part of the government’s divestment programme for the current financial year 2019-20 and shares will be offered to employees and retail investors at a discount to the final price.

Major currencies were little changed in early trade. The yen traded flat at 107.94 yen. The euro hovered at $1.0945, having sunk to a 28-month low of $1.0904 on Friday as concerns about tepid growth in Europe weighed on the common currency. Sterling traded at $1.229, not far from Friday’s low of $1.2270, its lowest since 9 September.

Oil prices slightly bounced off a tad after last week’s slide. Brent crude futures rose 0.34% to $62.12 a barrel while US West Texas Intermediate (WTI) crude gained 0.32% to $56.09 per barrel.