Stock markets may rise as Sensex eyes 60000; Vedanta, IT shares in focus

Mining giant Vedanta has said it will delist its American depositary shares and concentrate all trading of its equity shares on the BSE and NSE

Indian stock markets may have another stellar run on Friday, with the SGX Nifty indicating a higher start for Indian benchmark indices. On Thursday, domestic equities scaled record highs, with the Sensex ending just short of hitting 60,000.

Asian stocks rose Friday and Treasury yields maintained a surge on optimism about the economic outlook and easing fears of contagion from the debt crisis at China Evergrande Group.

Shares jumped in Japan and were steady in Hong Kong and China, where the fate of Evergrande remains uncertain amid a lack of an announcement on a dollar-bond interest payment that was due Thursday. Global market unease about Evergrande has receded but it remains unclear if Beijing plans to manage fallout from any potential default at the word’s most-indebted developer.

U.S futures edged up after the S&P 500’s biggest two-day gain since July. The Wall Street advance was led by economically-sensitive sectors like energy and financials, as investors embraced the view that a looming reduction in Federal Reserve stimulus shows confidence in the recovery from the pandemic. The dollar was steady and oil extended a climb.

Mining giant Vedanta has said it will delist its American depositary shares and concentrate all trading of its equity shares on the BSE and NSE. "The company also intends to deregister such ADSs and the underlying equity shares and terminate the reporting obligations pursuant to the U.S. Securities Exchange Act of 1934, as amended...upon satisfying the relevant criteria," Vedanta Ltd said in a filing to the BSE.

IT consulting firm Accenture on Thursday forecast first-quarter revenue above analysts' estimates, expecting strong demand for its cloud and security services as companies delay return to offices due to the Delta variant. This may boost shares of Indian IT companies.

The prospect of tighter monetary policy spurred a global selloff in bonds. Long-term Treasury yields have surged the most in 18 months as traders brought forward expectations for the first Fed rate hike to the end of 2022. The Bank of England opened the door to a 2021 rate increase, pushing down 10-year gilts. Yields also jumped on sovereign debt in Australia and New Zealand.

Equity investors are taking heart from predictions that the delta virus strain and pandemic-related supply-chain snarls will deal only a temporary setback to economic reopening. Central banks have also pledged to withdraw stimulus gradually. But a continuing rise in long-term borrowing costs could be a risk to the upbeat picture if it ends up denting confidence in recovery prospects.
 

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