Stock markets are expected to open weakly amid mixed global backdrop

The trends on SGX Nifty indicate a negative opening of the indices with a loss of 72 points. Nifty futures were trading at 17,373.50 on the Singapore Stock Exchange around 7:40 a.m.

Indian markets could open lower continuing Monday’s weakness despite mixed Asian markets today and despite mixed US markets on Monday, said Deepak Jasani, head of retail, HDFC Research.

Nifty fell for the fourth straight session, dropping the most in points in 7 months on November 22. At the close, Nifty was down 1.96% or 348 points to 17,417. Indian markets were the worst performing in the Asian region for the day.

Jasani said Nifty extended the slowdown, as expected, but the fact that he didn’t close at its low is some consolation. 17 360 then 17 190 could be Nifty’s supports while 17613 could be short term resistance.

US stocks end mixed on Monday

U.S. stock indices ended mixed on Monday as investors embarked on a shortened vacation week, with Dow industry posting a three-day losing streak and the Nasdaq Composite recording its biggest daily drop in nearly two. weeks. The stocks dropped their earlier gains following President Joe Biden’s decision to appoint Federal Reserve Chairman Jerome Powell for a second term as head of the US central bank, as widely expected.

The 10-year Treasury bill yields 1.625%, up 9 basis points from 1.535% on Friday as investors continue to deal with higher inflation and rates as part of the COVID-19 recovery.

US Fed chairman gets second four-year term

Biden opted for the continuation option by appointing Powell for a second four-year term as Fed chairman yesterday. Brainard will assume the post of vice president responsible for overseeing banking regulation – vacated by Quarles ahead of schedule. The move is seen as appeasing to both Representatives and Democrats, as Brainard is expected to be tougher on banking regulations, but Powell will ultimately remain in charge. Both confirmations are pending from Congress, but a rejection of either is unlikely. Powell’s next term will begin in February 2022.

Markets saw this as a hawkish turn, with SPX selling on the close after climbing higher all day. Gains were led by energy and financials with 56% of components closing in the green. The yield curve bear flattened again as the front surged higher – 2 years to almost 60bp now and 10 years to 1.62%. Breakeven inflation fell on the day, however, and HY spreads also tightened, indicating a small change in the risk sentiment that prevailed last week.

China steps up diplomatic pressure on Taiwan

China has continued to step up diplomatic pressure on Taiwan, now targeting companies it sees as supporting the cause of independence. China’s recent military achievement on the hyperglide missile launcher (at 5 times the speed of sound) has also left everyone wondering how they did it. On real estate debt, onshore banks would be encouraged to lend to struggling names in the industry and Kaisa would repay its wealth management product obligations this quarter. Stock indexes on the continent were among the biggest gainers of the day.

Germany GDP data, Europe PMI today

Coming in today, we have the fourth quarter GDP data for Germany and the PMI data for Europe. Sentiment should have taken a hit here with the recent spike in Covid cases and the restrictions that followed. Merkel said the current wave is more intense than previous ones and that the ECB has chosen to rejoice as the impact on lives and livelihoods diminishes with each passing wave.

Elsewhere, there was some optimism about China’s easing of policy, after the People’s Bank of China reportedly cut several sentences about restricting policies in a report.

Russian stocks tumble

Remaining on the geopolitical front, Russian stocks fell amid concerns from the United States and Europe over a build-up of Russian troops on the Ukrainian border. The Russian ruble fell to its lowest level in four months on Monday. Ukrainian government bond prices fell to their lowest level in over a year, while the Ukrainian currency fell to its lowest level in seven weeks against the dollar.

The Paraguayan Central Bank on Monday raised its monetary policy interest rate by 125 basis points to 4.0%, raising the policy rate for the second month in a row in a bid to curb inflation as the economy is recovering from last year’s COVID-19 shutdown.

Asian markets retreat

The Asian stock market fell on Tuesday after Treasury yields and the dollar surged as the appointment of Jerome Powell as head of the Federal Reserve fueled bets on a faster policy tightening.

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Posted on: Tuesday November 23, 2021 08:47 IST

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