Market Bizzz

The US dollar was steady against major currencies as traders looked ahead to US data that may determine the timing of interest rate hikes. The crisis in Russia had pushed the greenback to a 15-month high against the rouble, whilst U.S. data released this week includes new orders for durable goods, housing figures, and consumer surveys from The Conference Board and University of Michigan. Commenting on the expected US dollar performance, Masafumi Yamamoto, chief currency strategist at Mizuho Securities, said, “If the US economic data comes out on the strong side, then further pricing in for the two rate hikes will push up the dollar.

The Nasdaq 100 is heading for its best H1 ever, with a surge of 36% so far this year. But Wall Street is concerned that the rally may be derailed by the Federal Reserve tightening its policy. Despite recession fears and bank failures, investors have remained optimistic as the US economy shows resilience and the earnings outlook improves. However, analysts warn that the rally in tech stocks appears overblown due to rich valuations and only a few high-flying companies such as Apple, Microsoft and Nvidia. Historically, a strong first-half for the stock market has been a good omen for the rest of the year.

Indian assets are more promising than those of Indonesia, thanks to their higher compensation for risk, according to data compiled by Bloomberg. The Indian rupee offers a carry-to-risk ratio of 2.8 compared with just 0.5 for Indonesia’s rupiah, while the Indian central bank’s intervention and the highest bond yields among major Asian nations are burnishing the appeal of its assets. Finally, foreign funds are locking in high yields in Indian debt, with the country’s one-year implied volatility slumping to a 10-year low of 5.21%. Experts therefore suggest investors are better off opting for Indian assets.

Gold prices increased by 0.3% to $1,926.29 per ounce during early Asian trade on Monday as the US dollar dropped by 0.2%, rendering bullion more appealing to buyers holding other currencies. However, the likelihood of further interest rate hikes by the Federal Reserve in 2022 to tackle sticky inflation dragged on the metal’s appeal. Fed Chair Jerome Powell indicated more rate hikes, but with caution during his testimony last week. San Francisco Fed Bank President Mary Daly had said two more rate hikes this year is “very reasonable”.

European shares closed lower on Friday amid concerns of higher interest rates and inflation, prompted by central bank policy decisions throughout the week. The STOXX 600 index fell 0.3%, with the index having lost 2.9% for the week, its worst weekly performance in over three months. Siemens Energy’s shares plummeted 37.3% after the company withdrew its annual profit outlook, citing quality problems at its Siemens Gamesa wind turbine unit. The basic resources index fell for the seventh straight session, posting weekly declines of 7.9%, the worst performer of the week. GSK’s shares rose 4.9% after it reached a confidential settlement in a US litigation.

COMEX Gold is facing its biggest weekly decline since January due to major central banks’ rate hikes and markets pushing back against rate cuts. Swaps show that not even a single 25-point rate cut is expected for 2023. Hawks like ECB and BOE increasing rates have led to easing of the dollar index and rising yields, which in turn cause an opportunity cost to holding gold, as a non-yielding asset. Despite recent comments by Atlanta President Raphael Bostic and Chicago Fed President Austan Goolsbee on inflation, Fed Chair Jerome Powell and two Federal Reserve policymakers emphasised the importance of fighting inflation and the need to raise interest rates.

Five entities, including Saubhagya Buildcon and Zolton Properties, have been issued notices by the Securities and Exchange Board of India (Sebi), asking them to pay Rs 5.7 crore ($755,000) in funds relating to Fortis Healthcare’s case of fraud. The five entities received demand notices as they failed to pay the fine imposed by the regulator in May 2020 regarding the alleged diversion of funds and misrepresentations made to conceal it.

IdeaForge has raised funds from anchor investors. Among the numerous participating investors were Nomura, Invesco, Goldman Sachs, and Tata AIG General Insurance. IdeaForge has a significant share in the Indian unmanned aircraft systems market at roughly 50%.