Global Bond Rout Adds to India Stock Bulls’ Rupee Worries

Good morning...

I’m Ashutosh Joshi in Mumbai, bringing you the latest market trends.

Indian equities head into Monday on shaky footing after the benchmark Nifty posted its worst weekly loss since mid-March, weighed down by higher crude prices and a currency that slid to yet another record low. Oil extended gains in Asian trading on Monday, while regional stocks are down as investors grapple with a worsening global backdrop.

A surge in global bond yields across the US, UK and Japan is unsettling markets. It is also adding pressure on emerging-market assets and currencies by threatening to lure funds away — creating another headache for Indian equities at a time when foreigners are already exiting the market. The Middle East situation is offering little comfort. President Donald Trump returned from talks in China with limited progress on reopening the Strait of Hormuz, keeping concerns alive over energy supplies and shipping flows.

The rupee will remain firmly in focus today after India’s trade deficit widened in April. Markets will be watching closely for signs of more policy action to stabilize the exchange rate and stem further volatility. Investors will also track Prime Minister Modi’s Europe visit for signs of deepening ties and progress on a free trade agreement with the EU — especially as ties between the US and China appear to be stabilizing after the Trump-Xi summit.

Earnings will also keep traders busy this week, with results due from Indian Oil Corporation, Bharat Petroleum and Life Insurance Corp.

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