Markets may stay subdued, telecoms and Yes Bank shares in focus

    Live Mint Updated: 20 Nov 2019, 08:47 AM IST
Indian stock markets may continue to be tepid on Wednesday following muted performance in global peers. Asian shares lumbered lower on Wednesday as the Sino-US trade talks produced nothing but a stream of conflicting messages, while concern about a global glut saw oil prices suffer their biggest spill in seven weeks.
Data from the American Petroleum Institute, out late Tuesday, showed a far larger rise in crude stocks than expected. That followed reports that Russia was unlikely to deepen its crude output cut. Brent crude futures stood at $60.91 a barrel early on Wednesday, after sliding 2.6% overnight, while US crude recouped a single cent to $55.22.
Action in share markets was subdued, with MSCI's broadest index of Asia-Pacific shares outside Japan off 0.25%. Japan's Nikkei eased 0.2% and South Korea 0.4%.
Hopes of progress in the resolution of US-China dispute had risen on Tuesday when Bloomberg reported that talks that failed in May were being considered as a benchmark on what US tariffs on China would be rolled back.
But later, the US President Donald Trump threatened to raise tariffs further if China would not agree to a deal that he liked.
The aggressive tone unsettled Wall Street and the Dow ended Tuesday down 0.36%, while the S&P 500 lost 0.06% and the Nasdaq added 0.24%.
Back home, private sector lender Yes Bank on Tuesday said the Reserve Bank of India has found that it has under-reported bad loans by ₹3,277 crore in the year ended 31 March. Of this, ₹1,259 crore has already been classified as non-performing as on 30 September and ₹2,018 crore is the amount of incremental bad loans, Yes Bank said. Divergence in bad loans and provisions arise when the bank’s and RBI’s assessments differ.
Reliance Jio Infocomm Ltd said it will join rivals Bharti Airtel Ltd and Vodafone Idea Ltd in raising tariffs, indicating that a three-year-long price war that unleashed an unprecedented consolidation in the industry is nearing an end.
According to the latest data from the Federation of Automobile Dealers Association (FADA), during the 42-day festival season this year, retail sales of vehicles across categories fell 2% year-on-year (y-o-y) to 2.41 million units.
Yields on the US 10-year Treasuries dropped to a two-week trough at 1.77%, with a marked flattening of the curve hinting at a possible return of recession fears.
The dip in yields nudged the dollar down on the safe-haven Japanese yen and it was last at 108.43, though still within the 107.87-109.48 range of the last five weeks.
The euro inched up to $1.1077, but faced chart resistance at $1.1090. The dollar was steadier on a basket of currencies at 97.829.
Investors are now awaiting minutes of the Federal Reserve's last policy meeting where it cut interest rates and signaled a pause for the time being.
The market has all but given up on the prospect of an easing in December, which is now priced at just 0.8%. A move in March is put at a probability of around 42%.
The risk-off tone helped spot gold firm 0.1% to $1,474.14 per ounce.

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