Market Bizzz

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%.

Shish Industries has proposed to issue 2 fully paid-up equity shares of INR10 each for every 1 fully paid-up equity share held by shareholders as on the record date. The firm will issue 2.27 crores equity shares as part of the bonus announcement. Bonus equity shares will be issued out of free reserves created out of profits and securities premium accounts. Bonus shares increase stock liquidity, making it affordable for investors. Shish Industries manufactures plastic containers and packaging solutions, and its stock has risen by 153% this year, delivering multibagger returns.

Gold prices were poised for their largest weekly decline since February due to the increased probability of further interest rate hikes by the U.S. Federal Reserve. The dollar index also showed signs of improvement, with markets becoming less attracted to gold. Although spot gold rose 0.1% to $1,915.39 per ounce, the asset stood close to a three-month low, with the US precious metal futures trading at $1,925.10. However, the analysis following Fed Chair Jerome Powell’s announcement said that policymakers aimed to be careful in the gradual increase of interest rates.

The US dollar gained support from risk aversion as hawkish comments from global central banks sparked concerns that monetary tightening could lead to a deeper economic downturn. Although higher rates are typically supportive for currencies, there are concerns they could trigger a recession, leading some investors to seek safe-haven assets such as the US dollar. Sterling struggled to hold gains from a larger-than-expected 50-basis-point rate rise from the Bank of England in response to inflation, and was set for a weekly loss of over 0.5%. Meanwhile, the Australian and New Zealand dollars fell amid the volatility.