Tuesday Morning Briefing: Asia Falls, Dollar Holds Losses on Trump Ban
Your Tuesday Morning Briefing: SGX Nifty indicates a flat start to Indian equities.
Asian shares declined on Tuesday, tracking a selloff in the U.S. stocks overnight, after President Donald Trump’s order on immigration raised concern that he may follow through with isolationist policies touted on the campaign trail, overshadowing a pro-growth agenda.
U.S. equities fell the most since November presidential election, with the Dow Jones Industrial Average Index closing lower by 0.6 percent at 19,971 and the S&P 500 declined 0.6 percent to end at 2,280.
Trump passed a new order banning people from seven predominantly-Muslim Middle East countries from entering the U.S. for 90 days on Friday. The dollar fell versus the yen and precious metals advanced as investors favoured safe haven assets.
Central Bank Meet In Focus
Investors will now turn their attention to the U.S. Federal Reserve's two-day policy meeting that begins on Tuesday and the Bank of Japan’s policy outcome.
The U.S. central bank, which has forecast three rate hikes this year, is not expected to raise rates at this week's meeting while the Bank of Japan is expected to leave policy unchanged later in the day as it concludes its first meeting of 2017.
Federal Reserve meeting comes in at a time when the economic data in the world’s largest economy has shown signs of improvement. Contracts to buy previously owned U.S. homes rebounded, with gauge rising 1.6 percent in December compared with the forecast of 1 percent.
Meanwhile, consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.5 percent after an un-revised 0.2 percent gain in November.
Oil Hovers Near $55-Mark
Oil held losses after a two-day drop ahead of the U.S. government forecast to show crude stockpiles expanding further.
Brent for March settlement dropped 0.5 percent to $55.23 a barrel in London. U.S. crude inventories probably rose by 3 million barrels last week, according to a Bloomberg survey of analysts before an Energy Information Administration report Wednesday.
American crude output is at the highest level since April, government data showed on Friday.
The recent bout of data has raised fresh concerns of a global supply glut despite the production cuts made by the Organisation of Petroleum Exporting Countries (OPEC) and other producers.
Muted Start?
The Nifty futures on the Singapore Stock Exchange, an early indicator of Nifty’s performance in India, was little changed at 8,648, indicating a flat start to the Indian markets.
Investors will be keenly awaiting the commentary coming in from the Economic Survey that will be tabled in the Parliament today, ahead of all-important Union Budget on Wednesday.
The NSE’s NIfty 50 Index snapped a four-session winning streak to end lower by 0.1 percent at 8,632 on Monday on the back of weak global cues.
Shares of Bajaj Finserv and Dish TV India will be in focus today. Bajaj Finserv posted a 41 percent jump in consolidated net profit while Dish TV India's consolidated profit slumped nearly 61 percent for quarter-ended December 31.
Bajaj Auto, Dabur India, ICICI Bank, InterGlobe Aviation, Indian Oil Corp, ONGC and JSW Steel are scheduled to post their quarterly results later in the day.