On Monday, Indian shares are likely to open slightly down as investors process the mixed U.S. employment data. They are also keeping an eye on the approaching release of U.S. inflation data this week, which will give signals for any potential change in the timing or speed of interest-rate reductions.
Previous week, benchmark indexes such as Sensex and Nifty showed minor gains, achieving record highs due to an increase in FII flow and a decrease in U.S. Treasury yields, hoping for a Federal Reserve rate cut by June.
Unfortunately, small to mid-cap stocks experienced a decrease due to concerns about their valuation. India's retail inflation data for February, in combination with the industrial production data for the same month, will be released on Tuesday.
Later in the week, the Wholesale Price Index-based inflation data will also be announced. This morning, Asian markets were down, with Japan's Nikkei falling over 2% as the yen strengthened its recent gains against the dollar.
Japan's GDP for Q4 was slightly expanded, prompting speculation that the Bank of Japan may soon cease its negative interest rates policy.
In other news, for the first time in six months, consumer prices in China increased in February while producer prices continued to fall.
The U.S. dollar showed weakness in Asian trading today and gold kept steady near a record high. Oil prices fell in anticipation of reports from OPEC and the IEA this week that could hint at the future demand outlook.
U.S. stocks closed lower on Friday as mixed signals from February jobs data created confusion about the economic and rate outlook. The report indicated stronger than expected job creation, with non-farm payroll employment surging by 275,000 jobs in February, exceeding the projected increase of 200,000 jobs. However, the unemployment rate also rose to 3.9%, wage growth slowed, and there were significant downward revisions to job growth in December and January.
Last Friday, the tech-focused Nasdaq Composite dropped 1.2%, the S&P 500 declined by 0.7% and the Dow Jones eased by 0.2%.
European stocks closed Friday mixed due to data revealing that Eurozone GDP remained relatively unchanged at year-end of 2023. The pan-European STOXX 600 ended flat but showed positive signs. The German DAX slipped by 0.2% and the UK's FTSE 100 decreased by 0.4%, while France's CAC 40 experienced a slight increase of 0.2%.
