- Asian equities ran into turbulence in early deals on Monday as a flare-up of tensions in the Middle East sent gold to its highest in almost seven years
- The United States detected a heightened state of alert by Iran’s missile forces
Oil prices added to their gains on fears that any conflict in the region could disrupt global supplies
The Indian stock market is likely to be under pressure on Monday following weakness in global peers. Asian equities ran into turbulence in early deals on Monday as a flare-up of tensions in the Middle East sent gold to its highest in almost seven years while oil flirted with four-month peaks.
The United States detected a heightened state of alert by Iran’s missile forces, with President Donald Trump warning that the US would strike back, “perhaps in a disproportionate manner,” if Iran attacked any American person or target.
Iraq’s parliament on Sunday recommended all foreign troops be ordered out of the country after the US killing of a top Iranian military commander and an Iraqi militia leader.
Spot gold surged 1.2% to $1,569.47 per ounce in jittery trade and reached its highest since April 2013.
Oil prices added to their gains on fears that any conflict in the region could disrupt global supplies. Brent crude futures rose $1.02 to $69.62 a barrel, while US crude climbed 81 cents to $63.86.
MSCI’s broadest index of Asia-Pacific shares outside Japan was off 0.2% though China had yet to open. Japan’s Nikkei slid 1.7% in a sour return from holiday.
Back home, ousted Tata Sons Ltd chairman Cyrus Mistry on Sunday said he will not seek to return to the post despite his victory in an appeals court, likely ending protracted uncertainty over the conglomerate’s leadership trajectory.
In a statement issued a fortnight after the National Company Law Appellate Tribunal (NCLAT) reinstated him, Mistry said he would not seek executive chairmanship of the group holding company Tata Sons Ltd, nor directorship of three group companies.
The committee of creditors (CoC) to Dewan Housing Finance Corp. Ltd (DHFL) has approved a plan under which the mortgage lender will resume advancing home loans beginning with ₹500 crore a month to arrest the decline in its loan book.
A document from the central bank-appointed administrator showed DHFL is recovering ₹1,700-1,800 crore from past loans every month and, after setting aside money for securitization payments and operational expenses, it can restart disbursements of ₹500 crore per month.
Meanwhile, sovereign bonds benefited from the safety bid with yields on 10-year Treasuries down at 1.77% having fallen 10 basis points on Friday. Treasury futures gained 7 ticks.
In currency markets, the Japanese yen remained the favored safe harbor courtesy of Japan’s massive holdings of foreign assets. Investors assume Japanese funds would repatriate their money during a true global crisis, pushing the yen higher.
Early Monday, the dollar was flat at 108.00 yen, after touching a three-month trough of 107.78. The euro likewise eased to 120.45 yen having hit a three-week low.
The dollar was steadier against the other majors, with the euro little changed at $1.1166. Against a basket of currencies, the dollar was holding at 96.853.