Asian stocks are set to pare their weekly gains tracking weak overnight cues from U.S. and Europe, after the European Central Bank downplayed the need for additional stimulus.
The ECB on Thursday refrained from expanding its quantitative easing program and left its key interest rates unchanged. The central bank said it will study options to ensure that they don’t run out of bonds to buy with six months to go until the scheduled end of its QE program. The ECB’s commentary sent the euro rallying to a two-week high and triggered a selloff in debt around the world.
The U.S. indices retreated from a record high with the Nasdaq Index falling 0.46 percent. The number of people filing for unemployment benefits unexpectedly dropped to the lowest level in seven weeks, prompting an increase in odds of the Fed raising rates at its September meeting. The bets on a rate hike in September is now at 28 percent, according to Fed fund futures tracked by Bloomberg.
Oil held above the $45 per barrel mark after data from the Energy Information Administration showed U.S. inventories dropped by 14.5 million barrels last week. That’s the biggest single week drop since 1999.
The SGX Nifty futures fell 0.39 percent to 8,940 as of 7:10 am, foreshadowing losses for Indian equity markets. Investors will react to results from steel companies Steel Authority of India Ltd. as well as Jindal Steel and Power Ltd.