While Indian₹ depreciates ~6% vs $ in 1 year, Japanese yen is down 25%. If you borrowed ₹100 in yen 1 year ago your borrowing cost near zero, and you would have to repay only around ₹84!— Uday Kotak (@udaykotak) June 29, 2022
Asian Markets trade weak
Stocks fell across Asia on Wednesday morning, extending overnight losses on Wall Street amid concerns over recession, inflation and high oil prices, which also boosted the safe-haven dollar.
Japan’s Nikkei index fell 1.01% in early trading, while MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1.1%, dragged lower by Australian shares, off 1.29%, and Korea’s KOSPI, down 1.57%.
Gold prices buoyed by lower US bond yields
Gold prices treaded water on Wednesday, with lower U.S. Treasury yields lending support, as bullion’s struggle to break out of its range-bound trade continued.
Spot gold was up 0.1% at $1,821.57 per ounce by 0254 GMT. U.S. gold futures firmed 0.1% at $1,823.10.
Rupee at fresh record low:
Indian rupee extended the early fall and inching toward 79 level as it is trading at 78.94 per dollar.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services:
The sharp pullback witnessed in the US last Friday has lost steam and the markets have again turned weak. The decline in commodity prices last week has not sustained and Brent crude is back to above $117. Even though there is no consensus on whether the US economy will slip into recession or not, there are clear signs of the economy slowing down. But the labour market continues to be strong in the US and unemployment is low at 3.6%. In this context of conflicting signals, markets are likely to remain choppy.
Investors should understand the fact that big money is made not by investing in a bull market but by systematically investing through a bear market and waiting patiently for the inevitable bull market. So, invest systematically in high-quality stocks.
BSE Metals index shed 1 percent dragged by the Hindalco, NALCO, Jindal Steel
Prashanth Tapse, Vice President (Research), Mehta Equities:
Local benchmark indices are likely to see a gap down opening and stray downwards, tracking a sharp fall in the overnight US markets and weakness in other Asian peers. There are multiple factors at play that would drag markets after having clocked decent gains in the last three sessions.
We have seen oil prices moving up again, while US treasury yields are also trading higher, which has reignited fears of uncertainty going ahead. Besides, FIIs have shown no signs of returning back, as they remained net sellers in the Indian markets.
Traders will also brace for the final revision of the U.S Q1 GDP print to trickle in the evening today. However, IT & Software stocks could be bright spots on the side in the backdrop of depreciating Indian Rupee. We like Infosys, Mindtree, Larsen Toubro Infotech, and Tech Mahindra on the buy side on any early declines.
All the stocks on the BSE Sensex are in the red
Market Opens: Indian indices opened on negative note on June 29 with Nifty around 15700 on the back of weak global cues.
At 09:16 IST, the Sensex was down 506.55 points or 0.95% at 52670.90, and the Nifty was down 146 points or 0.92% at 15704.20. About 546 shares have advanced, 1254 shares declined, and 91 shares are unchanged.
HUL, IndusInd Bank, Hindalco Industries, Wipro and Bajaj Finserv were among major losers on the Nifty, while gainers were ONGC, Tata Consumer Products and SBI Life Insurance.
Indian rupee opened marginally lower at 78.82 per dollar on Wednesday against previous close of 78.78.
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Indian markets are likely to open gap down today on the back of weak global cues after dire consumer confidence data from the US dampened investor optimism and fuelled worries over recession.
US markets ended lower on the back of losses in technology stocks ahead of release of macroeconomic data.