Japan’s Nikkei slipped after giving up early gains as weaker Nasdaq futures pressured technology stocks ahead of Micron’s quarterly results, while banking stocks provided support and the broader Topix edged higher.
Gold and silver prices fell sharply on MCX as rising oil prices fuelled inflation concerns and boosted expectations of further US rate hikes. Gold futures dropped Rs 3,214 per 10 grams, while silver declined Rs 6,661 per kg. Experts expect volatility amid crude prices, the dollar, geopolitical tensions and US-Iran developments.
South Korean shares fell over 2% as higher bond yields weighed on risk appetite after a two-day holiday break. The KOSPI declined 2.13%, led by losses in Samsung Electronics and SK Hynix. Foreign investors sold Korean equities, while rising domestic yields and cautious sentiment around technology valuations added pressure.
In India, major consumer stocks have suffered a staggering drop, with market values plummeting by nearly Rs 4 lakh crore. Even with an uptick in demand, FMCG firms like ITC and Hindustan Unilever are facing profound losses in market cap this year. Rising input costs, despite signs of consumption recovery, are tightening margins.
Japanese government bond yields climbed on Monday as rising services inflation and Bank of Japan rate-hike expectations weighed on debt prices. The benchmark 10-year yield approached multi-decade highs near 3.095%, while investors monitored upcoming Ministry of Finance bond auction plans and central bank policy minutes.
Stock selection will be critical for investors as earnings and valuation gaps widen across large-, mid- and small-cap stocks, according to Chandraprakash Padiyar, senior fund manager at Tata Asset Management. Padiyar said valuations look expensive in some pockets but reasonable in others, making earnings and cash-flow growth key filters in a more volatile global environment. He remains positive on banks and manufacturing, while seeing select auto-ancillary companies as a better way to play the auto theme.
Nomura expects the RBI to pursue a limited tightening cycle, with a possible 50 bps rate hike by December, as food and energy pressures rise but underlying inflation remains contained.
Against this backdrop, SEBI’s proposed PRIM framework could potentially redefine what investors expect from a portfolio manager.
The Federal Reserve’s rate hike may be largely priced in, but according to Nachiketa Sawrikar, Fund Manager at Artha Bharat Global Multiplier Fund, the bigger question for markets is what happens to US bond yields and the dollar from here.
Brent crude futures rose $1.65, or 1.50%, to $106 a barrel, while US West Texas Intermediate crude was at $93.40 a barrel, up 99 cents, or 1.10%.
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