Markets likely to be volatile; Future group, PNB, Reliance Infra in focus

The Singapore International Arbitration Centre (SIAC) has decided to hear the high-profile legal case between Amazon.com NV Investment Holdings Llc and Kishore Biyani-promoted Future Group over the latter’s ₹24,713 crore deal with Reliance Industries Ltd on 12 July, according to a Mint report.

Punjab National Bank (PNB) on Saturday said it will pick up a stake in the National Asset Reconstruction Company Ltd. (NARCL) and has identified NPAs worth ₹8,000 crore to be transferred to the proposed bad bank for resolution.

Anil Ambani’s Reliance Infrastructure Ltd (RInfra) on Sunday said that its board has approved raising a sum of ₹550.56 crore by preferential allotment of up to 88.8 million shares and/or warrants convertible into shares of the company to promoter group and VFSI Holdings Pte. Ltd, an affiliate of Värde Investment Partners LP.

In global markets, Asian shares turned lower on Monday as relief over the benign US jobs report was tempered by caution ahead of key inflation data later this week, while a coronavirus outbreak in Taiwan took a toll on chip manufacturers.

Investors were wary on how shares of major tech firms would react to the G7’s agreement on a minimum global corporate tax rate of at least 15%, though getting the approval of the whole G20 could be a tall order.

Also of interest will be the tussle over US President Joe Biden’s proposed $1.7 trillion infrastructure plan with the White House rejecting the latest Republican offer.

MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.3% and risked a fourth session of losses. Japan’s Nikkei edged up 0.2% and touched its highest in almost a month.

Taiwan stocks lost 1.7% as a spike in covid cases hit three tech companies in northern Taiwan.

While the 559,000 rise in US payrolls missed forecasts it was still a major relief after April’s shockingly weak report, while the jobless rate at 5.8% showed there was still a long way to go to reach the Fed’s goal of full employment.

Attention will now turn to the US consumer price report on Thursday where the risk is of another high number, though the Fed still argues the spike is transitory.

The European Central Bank holds its policy meeting on Thursday and is widely expected to maintain its stimulus measures with tapering a distant prospect. Yields on US 10-year notes were a fraction higher at 1.57%, after diving 7 basis points on Friday and back to the bottom of the trading range of the last three months.

That drop, combined with an improvement in risk appetite, put the dollar on the defensive. It was last at 90.173 against a basket of currencies, having slipped from a top of 90.629 on Friday.

The pullback in the dollar helped gold steady at $1,885 an ounce, up from a low of $1,855 on Friday.

Oil prices ran into profit-taking after Brent topped $72 a barrel for the first time since 2019 last week as opec+ supply discipline and recovering demand countered concerns about a patchy global covid-19 vaccination rollout.

Brent slipped 31 cents at $71.58 a barrel, while US crude eased 24 cents to $69.38.

(Reuters contributed to the story)