Global market: SGX Nifty, high bond yields to Accenture’s dismal revenue forecast – key triggers for Indian stock market
Accenture shares declined 1.9% after the IT giant forecast weaker-than-expected fourth-quarter revenue, flagging concerns about dwindling IT spending.
Asian markets traded mixed on Friday following mild gains overnight in the US stocks and elevated bond yields following a slew of central bank rate hikes.
Shares in Japan extended gains to reach their highest level since 1990 after the country’s headline inflation rate in May eased to 3.2% from 3.5% in April.
However, the inflation was still above the Bank of Japan’s target of 2% for the 14th straight month and slightly above the 3.1% estimated by economists polled by Reuters.
US Treasury Secretary Janet Yellen sees diminishing risk for the US to fall into recession, and suggested that a slowdown in consumer spending may be the price to pay for finishing the campaign to contain inflation, Bloomberg reported.
On the chance of a recession, Yellen said in an interview with Bloomberg News, “my odds of it, if anything, have gone down — because look at the resilience of the labor market, and inflation is coming down.”
Meanwhile, in Europe, the Bank of England hiked its key interest rate by 50 basis points (bps) to a 15-year high of 5%. Central banks in Norway, Switzerland and Turkey also raised borrowing rates.
On the domestic front, Indian markets will keep an eye on Prime Minister Narendra Modi’s US visit where he and US President Joe Biden announced a series of defense and commercial deals designed to improve military and economic ties between their nations during Thursday’s state visit at the White House.
Asian Markets
Japan’s Nikkei 225 rose 0.56%, while the Topix gained 0.39% after Japan’s core inflation rate in May declined to 3.2% YoY from 3.4% in April.
South Korea’s Kospi declined 0.12%, while the Kosdaq was up 0.35%. Hong Kong’s Hang Seng index futures were 24 points higher at 19,243.
Australia’s S&P/ASX 200 was down 0.49% at open.
Markets in Mainland China are closed for a public holiday.
The SGX Nifty was trading 21 points, or 0.11%, higher at 18,852, indicating a positive start for the Indian indices.
Wall Street
The US stock indices ended mostly highe
The S&P 500 gained 16.20 points, or 0.37%, to close at 4,381.89 points, while the Dow Jones Industrial Average eased 4.81 points, or 0.01%, to 33,946.71.
The Nasdaq Composite rallied 128.41 points, or 0.95%, to 13,630.61, led by gains in stocks such as Amazon, Apple Inc, and Microsoft Corp.
Accenture shares declined 1.9% after the IT giant forecast weaker-than-expected fourth-quarter revenue, flagging concerns about dwindling IT spending. The company expects revenue to be in the range of $15.75 billion to $16.35 billion, an increase of 2% to 6% for the fourth quarter of 2023. This is below Wall Street’s estimates.
Europe
European shares declined after rate hikes by central banks. The pan-European STOXX 600 index closed 0.5% lower.
Britain’s FTSE 100 fell 0.8% to 7,502.03, while Germany’s DAX ended 0.2% lower at 15,988.16. France’s CAC 40 declined 0.8% to end at 7,203.28.
Energy
Crude oil prices were little changed in early trading amid worries about the outlook for fuel demand. Bigger-than-expected interest rate hike in the UK and looming additional US rate hikes also weighed on oil prices that were headed for a 3% drop for the week.
Brent futures gained 0.09% to $74.21 a barrel, while US West Texas Intermediate (WTI) crude futures were down 0.01% at $69.50.
Gold price today
Gold prices were steady but were on track for their biggest weekly drop since February as prospects of additional interest rate hikes by the US Federal Reserve this year weighed on bullion’s appeal.Spot gold was up 0.1% at $1,915.39 per ounce, while US gold futures held steady at $1,925.10.
Bond yields
The US Treasury two-year yields hit the highest since March after Federal Reserve Chair Jerome Powell said the US may need one or two more rate increases in 2023. The yield on the 10-year treasury rose to 3.79% from 3.73% late Wednesday.
The US Treasury two-year yields hovered just below 4.8% after hitting the highest since March on Thursday after Powell said the US indicated more rate hikes in 2023.
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