Indian shares fell on Tuesday after four sessions of gains as sentiment across the globe was cautious ahead of the outcomes of the Federal Reserve and the Bank of Japan’s policy meetings later this week.
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The gap between five-year note yields and 30-year bond yields widened to as much as 130.10 basis points on Thursday, the steepest since June 27. In Europe, strong gains were registered in energy companies and financials, although Deutsche Bank notably underperformed and fell a further 2.4% following heavy losses on Friday.
The pre-BOJ and Fed caution kept European bond market moves small too, although longer-dated euro zone government yields edged lower with the BOJ expected to try to lever investors away from its longer-maturity bonds.
Russ Koesterich, head of asset allocation with BlackRock’s Global Allocation Fund, said investors do not expect the Fed to raise interest rates.
“That said, the bond rally this year had taken yields to pathetic levels leaving them at risk of a snapback, which we are now seeing”. Market participants are split on what the BOJ might do, although speculation seems to indicate that policymakers are favouring another rate cut. The Dow Jones industrial average fell 0.02 percent, to 18,120.17, the S&P 500 lost 0.04 points, to 2,139.12 and the Nasdaq Composite fell 0.18 percent, to 5,235.03.
The US Federal Reserve meets today and tomorrow with a statement on monetary policy to come on the second day. Tech Data says the deal will give it operations in 35 countries.
Early trading saw stocks rise, the USA dollar falling and United States yields retreating, as investors largely discounted any move on rates by the Fed, only to reverse by the end of the session.
Oil slipped back to $45.79 per barrel having briefly rallied on Monday on Venezuela’s bid to talk up a potential OPEC output freeze, though that soon fizzled on indications that USA crude stockpiles had risen again last week. Brent crude, used to price global oils, slipped 49 cents to $45.46 a barrel in London. Isle of Capri stock jumped $5.35, or 31.6 percent, to $22.28 while Eldorado Resorts stock rose 5 cents to $14.30. The real estate sector gained 1%.
SAREPTA SURGING: Sarepta Therapeutics soared $26.29, or 93.4 percent, to $54.44 after the Food and Drug Administration granted tentative approval to its drug Exondys 51, a treatment for a type of muscular dystrophy.
Tokyo markets were shut Monday for a public holiday. The central bank will conduct a comprehensive review of its stimulus program after failing to reach its 2% inflation target. Platinum was up 0.3 percent at $1,023.65 per ounce and palladium rose 0.3 percent to $685.15.
KEEPING SCORE: France’s CAC 40 added 0.2 percent to 4,401.61 in early trading.
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CURRENCIES: The dollar fell to 101.66 yen from 102.42 yen. Australia’s stock market suspended trading after a couple of hours because of technical glitches. BHP Billiton (BHP.AU) was up 2.3% with Rio Tinto Ltd. (RIO) higher by 1.6%. The dollar index, which tracks the greenback against a basket of six major peers, remained steady at 95.277, and set to end the week little changed.
