Sensex, Nifty Set To Follow Asian Peers Lower

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( - Indian shares may follow Asian peers lower on Friday after benchmark 10-year U.S. Treasury yields surged to near 18-month highs on the prospects of higher fiscal spending, inflation and interest rates in the U.S. under Trump's presidency. The jump in safe-haven yields and a strengthening dollar pose risks for emerging markets like India dependent on foreign funds.

The dollar fell against a basket of currencies in Asian deals and gold prices recovered from 10-month lows while oil extended gains after settling at six-week high on Thursday in the aftermath of the OPEC agreement to cut production.

U.S. stocks ended mixed overnight as a sell-off in technology stocks offset gains among banks and energy stocks, and economic reports on manufacturing and construction spending boosted the case for higher interest rates.

European shares retreated from three-week highs on Thursday as caution set in ahead of the all-important U.S. jobs report due on Friday as well as a constitutional referendum in Italy and a presidential election in Austria due this weekend.

The pan-European Stoxx Europe 600 index declined 0.3 percent. The German DAX lost 1 percent, France's CAC 40 index dropped 0.4 percent and the U.K.'s FTSE 100 slid half a percent.

Back home, benchmark indexes Sensex and the Nifty fell slightly on Thursday to snap a four-day winning streak after a monthly survey revealed the withdrawal of high-value banknotes took a toll on the country's manufacturing sector growth in November.

The rupee ended higher by four paise to hit a one-week high against the dollar despite sustained selling by foreign portfolio investors.

Investors are pinning hopes that the Reserve Bank of India (RBI) will cut policy rates by at least 25 bps at its forthcoming policy review on December 7 to support small and medium enterprises (SMEs) which have been hit by demonetization of high-value notes.

A two-day Goods and Services Tax (GST) Council meeting begins today to discuss revised drafts of the model GST laws. It is expected that states will harden their stance in the meeting, given the impact on their finances because of demonetization.

Meanwhile, the NITI Aayog on Thursday said that the government is working on 12-digit Aadhar number as the mode of banking to enable financial transactions through mobile phones as part of efforts to convert the country into a cashless economy.

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This article appears in: Market News Headlines

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