Markets update to start your week: 06/02/23

The US has launched a mission to retrieve what is believed to be spy equipment from the Chinese balloon that was shot down off the coast of South Carolina. The pressure is increasing on President Biden to impose new export controls on sensitive technology. 

The yen declined to its weakest level in over three weeks after a Nikkei report claimed that Masayoshi Amamiya (current deputy governor) was approached to succeed Haruhiko Kuroda as the governor of the Bank of Japan (BOJ) in April. However, the deputy cabinet secretary denied the report, saying that a decision has not been made yet.

Traders in Europe are showing early signs of preparing for another period of “bond scarcity”. The concern is growing that the European Central Bank will not extend its 0% remuneration cap for government deposits that expires on April 30, which could lead to the 390 billion euros held by national Treasuries entering into higher-yielding money markets.

Meanwhile, traders are becoming more selective about their investment strategies in emerging markets, as new risks arise. The MSCI developing currencies index saw its biggest one-day loss in early December after the US jobs data. 

On the other hand, Nissan rose in Tokyo after Renault was said to have agreed to a landmark rebalancing of the two-decade alliance. 

The stock rout in Adani group companies has entered its third week, as Adani Enterprises suffered a setback in its bond sale and StanChart stopped accepting Adani bonds as collateral on margin loans.

A powerful earthquake struck southern Turkey, killing at least five people and trapping an unknown number of others in pancaked apartment buildings. 

Overall, experts say that European shares are expected to drop due to a hot US jobs report and tensions between Washington and Beijing.

Before you start your day today:

Indian key equity benchmark indices opened lower on Monday as index heavyweights Reliance Industries, Infosys and TCS weighed down the market amid negative trends globally and falling Adani stocks. The Nifty 50 index fell 0.75% to 17,721, while the S&P BSE Sensex declined 0.65% to 60,445. The Nifty IT fell 1.23% and Nifty Metal declined 1.07%. However, the Nifty Smallcap50 rose 0.59% and Nifty Midcap50 advanced 0.50%. The Indian rupee fell by 35 paise to 82.43 against the US dollar in early trade. 

Oil prices inched up after falling around 8% last week to more than three-week lows.

Last week, Equity futures in Europe and the US declined and Asian stocks also fell as the strong US jobs report raised the possibility of further rate hikes from the Federal Reserve, adding to concerns over US-China tensions. The dollar rose for a third day as a gauge of its strength rose more than 1% following the report. Stocks in Hong Kong and mainland China slipped, with the Hang Seng Index on course for the lowest close in a month after the Biden administration decided to postpone Secretary of State Antony Blinken’s trip to China. 

Major indices at 7:45am UKT:

Dow Jones: 33,926.01 (-0.38%)

NASDAQ: 12,006.96 (-1.59%)

FTSE100: 7,901.8 (+1.04%)

CAC40: 7,233.94 (+0.94%)

Sensex: 60,427.79 (-0.68%)

Nifty50: 17,720.05 (-0.75%)

Nikkei225: 27,693.65 (+0.67%)

Disclaimer: The information provided in this summary is based on sources believed to be reliable and accurate. However, the accuracy and completeness of the information cannot be guaranteed. The opinions and views expressed in this summary are for informational purposes only and do not constitute investment advice. This summary should not be relied upon as the sole source of information when making investment decisions. Any decisions made based on information contained in this summary are the sole responsibility of the reader and may not be in the reader's best interest. The author and publisher assume no liability for any errors or omissions in this summary.
MSc Finance graduate from the London School of Economics and Political Science (LSE)
Avatar for Ria Vaghela

Ria V Vaghela is an M&A Executive at RSM UK and an MSc Finance graduate from the London School of Economics and Political Science (LSE). She has worked at Jefferies, Dial Partners and 7i Capital prior to RSM UK gaining an experience of about 1.5 years. She has also worked as an Editor and Content Writer for The Representative Media. Apart from finance, she is interested in reading books on psychology and economics and also likes to paint and play lawn tennis

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