Sensex is trading further higher today, while other Asian stocks are trading lower
Jahnavi Prabhakar
Economist,
Bank of Baroda
Mumbai, July 2, 2024: As per the ISM data, US manufacturing PMI declined for the 3rd straight month, down
to 48.5 from 48.7 and the price pressure on inputs eased to a 6-month low. Investors
will track the JOLTS report, ADP data, non-farm payroll and Fed minutes, as this will
offer more cues on rate outlook. Global investors also closely monitored the growing
developments around the political space, ahead of the key elections. In Germany,
inflation eased down in Jun’24 to 2.5% (lowest in 3-years) from 2.8% in May’24 led
by lower energy prices. Core inflation also cooled off to 2.9% (previously 3%), while
service inflation remained unchanged at 3.9%. This data print came in ahead of the
Eurozone inflation which is expected to moderate down to 2.5% (2.6% in May’24)
raising the likelihood of another rate cut possibly in Sep’24.
Barring FTSE (flat), other global indices ended higher. US stocks closed in
green led by gains in technology stocks. Shanghai Comp surged by 0.9% after
a surprising jump in manufacturing Caixin PMI which was in contrast with official
data. Sensex ended higher supported by strong gains in IT and consumer
durable stocks. It is trading further higher today, while other Asian stocks are
trading lower.
Global currencies ended mixed. DXY remained broadly stable despite a rally in
US bond yields. EUR rose by 0.3% as investors sought comfort from a weaker
than expected majority for the far-right parties in the French elections. JPY
languished near a 38-year low. INR depreciated by 0.1%. It is trading further
weaker today, in line with other Asian currencies.
Except Japan and China, other global yields closed higher as investors
assessed the political dynamics in US, UK and France. 10Y yield is US rose
amidst growing expectations of a win for Republican candidate Donald Trump.
In Germany and UK, 10Y yields rose by 11bps each. India’s 10Y yield ended flat
at 7.01% and is trading at the same level today.
(The views expressed in this research note are personal views of the author(s) and do not necessarily reflect the views of Bank of Baroda. Nothing contained in this publication shall constitute or be deemed to constitute an offer to sell/ purchase or as an invitation or solicitation to do so for any securities of any entity.)
