Market Bizzz

China shares were mixed at the open, with the Shanghai Composite Index up 0.1% while Hong Kong’s Hang Seng Index lost 0.02%. Data on Tuesday showed China’s consumer inflation in March was at its slowest since September 2021.

“In our view, equity downside will be driven by worsening economic conditions, a function of: aggressive monetary policy; potential capital/liquidity issues catalyzed by the bank crisis; and a consumer that is increasingly reliant upon credit to sustain spending,” Harvey and his team of strategists said in a note to clients Tuesday.

Oil prices fell on Monday after rising for three straight weeks, after U.S. jobs data pointed to a tight labor market, heightening expectations of another Federal Reserve rate hike that could curb oil demand.

The dollar strengthened against the yen because of the continued strong growth in the U.S. labour market despite inflation and sharp interest rate rises, Mizuho analysts Masafumi Yamamoto and Masayoshi Mihara wrote in a client note.

“Not only should high inflation and a still-strong labour market keep cuts unlikely,” according to Citi strategists. “But we see persistently too-strong inflation as leading to further hikes.” Citi expects three further 25 basis point rate hikes.

Gold prices fell on Monday as the dollar firmed after the U.S. non-farm payrolls report pointed to a tight labour market and raised the odds of another rate hike by the Federal Reserve at its May policy meeting.

“HDFC is my top pick given its strong updates and the volatile market conditions. I also like State Bank of India in the PSU pack, which looks interesting after a recent correction.”

“The Pharma Index is now trading above its 50-day moving average, indicating that buying interest is likely to continue in the short term.”