Indian stock markets likely to remain stable; Future Group, Nykaa in focus

Asian shares edged cautiously higher on Monday as US stock futures posted early gains, though a batch of Chinese economic data exited later on, investors were wary of bearish surprises.

Annual growth in retail sales, industrial production and urban investment is expected to slow further in October, partly due to pandemic restrictions and stress in the housing market.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.1% after hitting higher levels late last week. Japan’s Nikkei rose 0.7%, as data showed a more-than-expected shrinking economic activity in the third quarter only strengthened the case for an aggressive fiscal stimulus.

Wall Street eased to break a string of gains last week, though major indices were only a shadow from all-time highs. S&P 500 futures gained 0.2% in early trade on Monday, while Nasdaq futures rose 0.3%.

A major release this week will be US retail sales on Tuesday for any impact from a fall in consumer sentiment for November to a decade low, as people worried about higher prices, especially for petrol. There are also doubts about whether firms have the pricing power to maintain margins in the face of rising costs.

Meanwhile, independent directors of Future Retail Ltd (FRL) have again asked the Competition Commission of India (CCI) to rescind its approval of the 2019 deal between a group company and Amazon.com Inc, alleging That the US retail giant hid facts from the regulator. Directors allege that Amazon had taken CCI’s approval for this 1,431 crore investment in Future Coupons Pvt Ltd. Ltd. (FCPL), for a 49% stake by creating an “intentional misrepresentation” and “actively misleading” antitrust watchdog.

FSN E-commerce Ventures, which operates Nykaa, said on Sunday that its net profit was 1.2 crore for the September quarter. The company listed on the stock exchanges on November 10 had made a net profit of 27 crore in the July-September 2020 quarter, FSN said. On the other hand, its revenue from operations grew 47%. 885 crore in the quarter under review from 604 crore in the September 2020 quarter.

There are three stock exchanges listed today. PB Fintech (PolicyBazaar), SJS Enterprises and Sigachi Industries will be listed. The IPOs of the three companies were open for subscription between November 1-3.

Higher US yields combined with general risk aversion to leverage the dollar, which has claimed its best week in nearly three months. Against a basket of currencies, the dollar was stable at 95.120 and was at its highest level since July 2020.

It was holding at 113.99 yen, preparing for another challenge to the October top at 114.69.

Inflation concerns kept gold demand at $1,865 an ounce, after the biggest weekly gain since May.

Oil prices had a rough week, fueled by a strong dollar and speculation that President Joe Biden’s administration may release oil from the US Strategic Petroleum Reserve.

Early Monday, Brent had jumped 21 cents to $82.38 a barrel, while US crude was up 28 cents to $81.07.

(Reuters contributed to the story)