June 3, 2019 / 3:22 AM / 3 months ago

Morning News Call - India, June 3

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    INDIA TOP NEWS
    India plays down Trump decision to remove U.S. trade privileges
    The Indian government said on Saturday it will continue to seek to build
strong economic ties with the United States despite a decision by U.S. President
Donald Trump to end preferential trade treatment for India from June 5.
    
    Collapsed Jet Airways' ex-partners, rivals scramble to fill India capacity
void
    Former partners and rivals of Jet Airways are launching replacement routes
and looking for new codeshare partners as they scramble to fill a lucrative gap
left by the collapse of the India's once-largest international airline.
    
    IndiGo close to new engine deal, may drop Pratt for CFM
    India's biggest airline, IndiGo, is close to a decision on engines that
could mark a dramatic shift away from Pratt & Whitney towards its
French-American rival CFM but a final decision is only expected later in June,
according to three people aware of the matter.
    
    SpiceJet examines taking over widebody jets previously operated by Jet
    Indian budget airline SpiceJet is examining the prospect of taking over
widebody jets previously operated by Jet Airways, but initial studies show they
need significant maintenance work, its chairman said on Saturday.
    
    Indian growth rate drops behind China to lowest in more than four years
    India's economy grew at its slowest pace in more than four years in the
January-March period, falling behind China's pace for the first time in nearly
two years and raising the prospect of fiscal stimulus and a rate cut.
    
    India to see 'big-bang' reforms in Modi's second term, says govt think tank
    In the first 100 days of Indian Prime Minister Narendra Modi's second term,
'big-bang' economic reforms that should please foreign investors are likely to
be pursued, according to a top official at the government's main think tank. 
    
    
    GLOBAL TOP NEWS
    Mexico and U.S. gear up for tariff talks as Trump doubles down on threat
    Mexican and U.S. officials were preparing on Sunday for upcoming talks aimed
at averting a major trade clash after U.S. President Donald Trump vowed to
impose punitive tariffs on all Mexican goods in an intensifying dispute over
migration.
    
    China May factory activity grows at steady pace but recovery still patchy
-Caixin PMI
    China's factory activity expanded at a steady but modest pace in May, as
export orders bounced from a contraction, a private business survey showed, but
the overall economic picture was mixed as output growth slipped and factory
prices stalled.
    
    FCA discusses improved Renault merger bid to win French backing
    Fiat Chrysler is discussing a Renault special dividend and stronger job
guarantees in a bid to persuade the French government to back its proposed
merger between the carmakers, sources close to the discussions said.
    
    
    LOCAL MARKETS OUTLOOK
    (As reported by NewsRise)
    SGX Nifty nearest-month futures were 0.3% higher at 11,966.00.
    
    The Indian rupee is expected to open higher against the dollar after Brent
crude fell to its lowest in 11 months. Tepid risk appetite and weak India
economic data, however, are expected to keep the rupee’s advance in check, a
dealer said.
    
    Indian government bonds are likely to rise in early trade as economic growth
in the last fiscal year slowed to a five-year low, raising bets of monetary
easing this week. The yield on the benchmark 7.26% bond maturing in 2029 is
likely to trade in a range of 7.00%-7.05% today.
    
    
    GLOBAL MARKETS
    • U.S. stocks dropped on Friday, as the S&P 500 closed out the month with
its biggest May slump since 2010, after President Donald Trump's surprise threat
of tariffs on Mexico fueled fears that a trade war on multiple fronts could lead
to a recession.
    • U.S. stock futures and Asian share markets slipped on worries intensifying
Sino-U.S. tensions and Washington's new tariff threats against Mexico could tip
the global economy into a recession.
    • The yen brushed a more than four-month high against the U.S. dollar as
U.S. President Donald Trump's hard stance on trade broadened to countries beyond
China, forcing investors to safe-haven assets, including government bonds.

    • Benchmark U.S. Treasury yields tumbled to 20-month lows on Friday after
U.S. President Donald Trump said the United States would impose a tariff on
Mexican goods, sparking broad risk aversion.
    • Oil prices fell more than 1%, extending losses of over 3% from Friday,
when crude markets racked up their biggest monthly losses in six months amid
stalling demand and as trade wars fanned fears of a global economic slowdown.

    • Gold prices rose to their highest in more than two months, with investors
seeking refuge in safe-haven assets as heightened Sino-U.S. trade tensions and
Washington's threat of tariffs on Mexico stoked worries of a global recession.

        
                   CLOSE        FII INVESTMENTS  EQUITIES    DEBT
 PNDF spot         69.79/69.82  May 31           $97.22 mln  $221.31 mln
 10-yr bond yield  7.03%        Month-to-date    $1.28 bln   $426.26 mln
                                Year-to-date     $11.05 bln  -$2.13 bln
   
    
    For additional data:
    India govt bond market volumes                 
    Stock market reports                
    Non-deliverable forwards data              
    Corporate debt stories               [IN CORPD]
    Local market closing/intraday levels [IN SNAPSHOT]
    Monthly inflows                      [INFLOWS RTRS TABLE IN]
 

 (Compiled by Sourav Bose in Bengaluru)
  
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