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US Markets

The S&P 500 ended slightly higher on Tuesday as investors kept their focus on the growth trajectory of the US economy, and the tech-heavy Nasdaq closed higher while the Dow slipped.

The Dow Jones Industrial Average fell 129.44 points, or 0.42 percent, to 30,967.82, the S&P 500 gained 6.06 points, or 0.16 percent, to 3,831.39 and the Nasdaq Composite added 194.39 points, or 1.75 percent, to 11,322.24.

Asian Markets

Asia-Pacific shares fell at the open on Wednesday despite Wall Street recovering most of its losses by the close. Japan’s Nikkei 225 fell 0.77% and the Topix index slipped 0.72 percent. In South Korea, the Kospi declined 0.52 percent. The S&P/ASX 200 in Australia lost 0.35 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.16 percent lower.

SGX Nifty

Trends on SGX Nifty indicate a positive opening for the broader index in India with a gain of 68 points. The Nifty futures were trading around 15,834 levels on the Singaporean exchange.

Oil rebounds above $100 after plunging on recession concerns

Oil rebounded above $100 a barrel after plunging more than 8 percent to the lowest close since late April on concern a recession will hurt demand. West Texas Intermediate was 2 percent higher as signs of a tight supply situation tempered fears of a global slowdown. Goldman Sachs Group Inc. said crude’s slump was overdone given that production was lagging behind demand.

Commodities have peaked, although raw material prices should remain elevated in the second half, according to Citigroup Inc. The bank said in a note that if there’s a recession, crude could retreat back below $70 a barrel.

Concor privatisation in spotlight as Cabinet may discuss railway land reforms today

The Union Cabinet may consider a proposal to cut land licensing fees (LLF) and increase the lease period for railway land on July 6, sources say. The Cabinet's approval for the much-awaited amendment to the Railway Land Policy would ease the strategic divestment process of Container Corporation of India (Concor). The policy changes will make Concor more attractive to private investors.

According to the sources, the proposal was sent to the Cabinet for approval three weeks back and would be discussed in the next meeting. Another source has confirmed that the Cabinet meeting is scheduled to take place via video conferencing on July 6, although he didn’t disclose the agenda.

Euro slumps to two-decade low as recession fears grow

Safe-haven demand strengthened the dollar on Tuesday to levels last seen in 2002 while the euro slumped to two-decade lows as the latest surge in European gas prices fueled recession concerns.

The dollar index rose 1.6 percent at one point and the euro fell as much as 1.75 percent to lows last seen in late 2002. It was the biggest single-day decline for the euro and the dollar's largest one-day gain since Covid-19 roiled markets in March 2020.

Oil may collapse to $65 by the year-end on recession: Citi

Crude oil could collapse to $65 a barrel by the end of this year and slump to $45 by end-2023 if a demand-crippling recession hits, Citigroup Inc. has warned. That outlook is based on an absence of any intervention by OPEC+ producers and a decline in oil investments, analysts including Francesco Martoccia and Ed Morse said in a report. Brent, the global crude benchmark, last traded near $113 a barrel.

States borrowing cost remains high at 7.86% despite fall in G-secs yield to 7.39%

The borrowing cost for the states continues to remain elevated, sniffing at the 7.9-per cent mark for the fourth consecutive week despite the average cut-off slipping marginally by 2 bps to 7.86 percent at the latest auction of debt on Tuesday. Nine states raised Rs 13,500 crore through state development loans (SDLs) at the first auction of the second quarter, which is nearly 4 per cent higher than the indicated amount for this week as Gujarat accepted an additional Rs 500 crore while the remaining eight states borrowed in line with the amount indicated in the auction calendar, according to an Icra analysis.

Still the overall issuance is still 9.4 percent lower than the year-ago period. Cumulatively, 19 states raised Rs 1,23,700 crore so far this fiscal, which is nearly 22 per cent lower than the year-ago level when it was Rs 1,59,500 crore. The weighted average cut-off declined by 2 bps to 7.86 per cent from the last auction, amidst stable weighted average tenor at 15 years. The yields had peaked at 7.91 percent in the auction held on June 22, Icra chief economist Aditi Nayar said in a note.

FII and DII data

Foreign institutional investors (FIIs) turned net buyers for the first time since May 30, buying shares worth Rs 1,295.84 crore, whereas domestic institutional investors (DIIs) turned net sellers for the first time since April 11, selling shares worth Rs 257.59 crore on July 5, as per provisional data available on the NSE.

US factory orders rise more than expected in May

New orders for US-manufactured goods increased more than expected in May, bucking a slew of recent data showing a softening in the economy and underscoring that demand for products remains strong even as the Federal Reserve aggressively tightens financial conditions.

The Commerce Department said on Tuesday that factory orders rose 1.6% in May after advancing 0.7 percent in April. Economists polled by Reuters had forecast factory orders would rise 0.5 percent.

With inputs from Reuters and other agencies