Banking

Markets likely to stay firm; telecom stocks, Yes Bank in focus

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Indian stock markets are likely to stay firm on Wednesday, while trends in SGX Nifty suggest a positive opening for the benchmark equity indices. On Tuesday, the BSE Sensex ended at 50,296.89, up 447.05 points or 0.90%. The Nifty closed at 14,919.10, up 157.55 points or 1.07%.

Asian shares edged higher in early trade as investors shrugged off concerns that stocks may have rallied too far too fast in the past year, and focused instead on optimism that more imminent US stimulus will energise the global economic recovery.

Wall Street had retreated overnight after beginning March with a bang, with the S&P 500 staging its best one-day rally in nine months on Monday.

The government wrapped up an auction for fourth-generation, or 4G, airwaves, generating 77,814.80 crore in proceeds, or about a fifth of the spectrum value put on sale. It, however, claimed the auction was a success as demand “far exceeded” its modest expectations. Reliance Jio Infocomm Ltd, India’s largest telco, emerged as the top bidder, cornering roughly three-fourths of the spectrum sold in the two-day event.

Yes Bank on Tuesday said its shareholders have approved a proposal for raising 10,000 crore capital with the requisite majority.

Government will sell 16% stake in Ircon International via offer for sale. The gloor price is fixed at 88 a share, 10% discount from its Tuesday’s closing. At that floor price, a 16% stake sale would fetch nearly Rs656 crore to the exchequer.

UK fund manager Bay Capital has come in as a pre-initial public offer (IPO) investor in PB Fintech Pvt Ltd, the holding company of Policybazaar, which is set to go public through a 4,000 crore share sale, according to a Mint report.

The cautious mood weighed on the U.S. dollar, which has benefited in recent days from investor hopes that the United States will enjoy a faster economic recovery, and that the US central bank will be more tolerant of higher bond yields.

The U.S. dollar index fell 0.22% against a basket of major currencies to 90.815.

A softer dollar supported the euro, which was steady at $1.20840.

Dollar weakness also gave a fillip to dollar-denominated gold, with spot gold bouncing off lows to be steady at $1,736.1600 per ounce.

Benchmark U.S. government bond yields dipped again for the third consecutive day as investors paused a recent sell-off ahead of a slew of U.S. economic data that will be released later this week. The yield on 10-year Treasury notes stood at 1.3982%, down from last week’s high of 1.614%.

The U.S. stock market was roiled last week when benchmark yields spiked to a one-year high on investor bets that a strong U.S. economic rebound amid ultra-loose monetary conditions could fuel inflation.

U.S. Federal Reserve officials have said that inflation concerns are premature, however, and warned that rising yields could tighten financial conditions and constrain an economic recovery.

Oil prices were soft after hitting a two-week low overnight on expectations that OPEC+ producers will ease supply curbs at their meeting later this week as economies start to recover from the coronavirus crisis.

U.S. West Texas Intermediate crude was down 0.57% at $59.41 a barrel, while Brent futures fell 1.68% to $62.62 a barrel.

(Reuters contributed to the story)

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