October 3, 2019 / 3:25 AM / 14 days ago

Morning News Call - India, October 3

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FACTORS TO WATCH

No major events are scheduled for the day.

LIVECHAT - BONDS UPDATE

Reuters European Government Bonds Correspondent Yörük Bahçeli examines the state of play in European govvies and tells the GMF what to look out for in debt markets at 5:00 pm IST. To join the conversation, click on the link: refini.tv/2P8N0Wp

INDIA TOP NEWS

• PREVIEW-RBI set to cut rates again as fiscal measures fail to cheer

The Reserve Bank of India (RBI) is expected to cut benchmark interest rates for the fifth time this year on Friday as recent fiscal measures to boost ailing growth seem largely inadequate and benign inflation offers room for more easing.

• U.S. Commerce Secretary Ross to hold talks in India amid hopes of trade deal

U.S. Commerce Secretary Wilbur Ross will be holding talks with Indian leaders today and three sources in government and industry in New Delhi said there were renewed expectations of a trade deal on farm goods and pharmaceuticals.

• September factory growth steady from August, but still weakest in over a year - PMI

Growth in India's manufacturing sector remained weak in September and forward looking indicators in a private business survey suggest the country's wobbly economy is unlikely to start recovering anytime soon.

• Yes Bank says forced stake sale behind stock plunge

Yes Bank said on Wednesday a forced stake sale by a shareholder led to a steep fall in the company's stock in the previous session.

• Ford ties up with Mahindra in India to cut risks and costs

Ford Motor Co and Mahindra & Mahindra said on Tuesday they would form a joint venture in India, in a move aimed at reducing risks for the U.S. automaker's local business and cutting the cost of developing and producing vehicles for emerging markets.

• PM Modi exhorts nation to end usage of single-use plastic by 2022

Prime Minister Narendra Modi called on the nation to work toward ending the consumption of single-use plastics by 2022, in a speech on Wednesday.

• PMC Bank created over 21,000 fake accounts to hide loans -complaint

Punjab and Maharashtra Co-operative Bank (PMC) used more than 21,000 fictitious accounts to hide loans it made, according to a police complaint lodged by Indian officials, in the latest banking fraud case to spook the country's depositors and investors.

• Flooding at large Coal India mine to halt output for a month Flooding at one of Coal India Ltd's largest open-pit mines will halt production there for at least a month, a senior company official told Reuters on Wednesday, in a setback for a country trying to reduce its dependence on coal imports.

GLOBAL TOP NEWS

• U.S. widens trade war with tariffs on European planes, cheese, whisky to punish subsidies

The United States on Wednesday said it would slap 10% tariffs on European-made Airbus planes and 25% duties on French wine, Scotch and Irish whiskies, and cheese from across the continent as punishment for illegal EU aircraft subsidies.

• Trump slams impeachment probe as hoax as Democrats seek White House documents

U.S. President Donald Trump on Wednesday angrily denounced an impeachment inquiry into his July telephone call with Ukraine's leader as Democratic lawmakers said they would subpoena White House records about the call.

• Japan services activity grows at slightly slower pace in September - PMI

Activity in Japan's services sector expanded for a 36th straight month in September, but at a slightly slower pace than in August, in a sign that robust domestic demand continued to support the economy before a sales tax hike kicked in this month.

LOCAL MARKETS OUTLOOK

(As reported by NewsRise)

• SGX Nifty nearest-month futures were down 11,348.50.

• The Indian rupee is expected to open lower against the U.S. dollar on the back of a selloff in equities after weak U.S. manufacturing and employment data. A further decline in crude oil prices and a pullback in the dollar index are, however, expected to keep the rupee’s losses in check.

• India government bonds are expected to gain in early trade tracking a slump in U.S. Treasury yields and crude oil prices. The yield on the benchmark 7.26% bond maturing in 2029 is likely to trade in a range of 6.62% - 6.69% today.

GLOBAL MARKETS

• Wall Street's main indexes suffered their sharpest one-day declines in nearly six weeks on Wednesday after employment and manufacturing data suggested that the U.S.-China trade war is taking an increasing toll on the U.S. economy.

• Asian stocks skidded to a one-month low after the United States opened a new front in its trade dispute with Europe by imposing tariffs, adding to already-growing market fears about global growth.

• The dollar nursed losses, hitting near one-week lows against the euro and yen, amid signs of a slowdown in U.S. economic growth and a deepening of global trade tensions.

• Two-year U.S. Treasury yields fell near two-year lows on Wednesday after a weak private sector jobs report depressed investor confidence in the economy and boosted expectations that the Federal Reserve will cut interest rates in October.

• Oil futures rebounded, reversing losses earlier in the day, as fears over the worsening global economic outlook that hit prices hard in the previous session gave way to modest hopes for progress in resolving the U.S.-China trade war.

• Gold prices extended their gains as weaker-than-expected U.S. jobs data reinforced global economic slowdown fears and raised expectations of further monetary policy easing by the U.S. Federal Reserve.

For additional data:

India govt bond market volumes

Stock market reports

Non-deliverable forwards data

Corporate debt stories [IN CORPD]

Local market closing/intraday levels [IN SNAPSHOT]

Monthly inflows [INFLOWS RTRS TABLE IN]

($1 = 71.14 Indian rupees)

Compiled by Samrhitha Arunasalam in Bengaluru

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