Markets likely to be volatile; Zee, Tata Steel, Srei group stocks in focus

Asian shares rallied on Thursday, taking heart from a late recovery on Wall Street after US politicans appeared near to a temporary deal to avert a federal debt default and as Russia reassured Europe on gas supplies, calming volatile markets.

Oil prices also dropped back from multi-year highs hit a day earlier, having been a major contributor to this week’s equities sell off, while US benchmark Treasury yields and major currencies steadied amid the calmer mood.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.25% in early trade, regaining ground lost in recent days to be little changed on the week.

As oil prices came off on Thursday, there were gains in share benchmarks in Korea up 1.3%, Australia up 0.64%, and Hong Kong up 2%.Japan’s Nikkei rose 0.89%.

Chinese markets remained closed for a holiday.

Zee Entertainment Enterprises Ltd on Wednesday approached an appellate tribunal in a fresh turn in the ongoing tussle with two of its institutional investors even as the company proceeds with a planned merger with Sony Group Corp.

Tata Steel on Wednesday reported a 7 per cent rise in consolidated steel output to 7.78 million tonnes (MT) for the July-September period this year. The company’s consolidated steel production was 7.25 MT in the same period last year, Tata Steel said in a statement. Tata Steel’s consolidated sales during the quarter under review fell around 6 per cent to 7.4 MT, from 7.87 MT in the same period of the preceding fiscal.

Within days of Reserve Bank of India superseding the boards of the group”s two non-banking finance companies, Srei group on Wednesday moved the Bombay high court against the move. Adisri Commercial Pvt Ltd has filed a writ petition against the RBI challenging the order and has also sought a stay on initiating insolvency proceedings against Srei Infrastructure Finance Ltd (SIFL) and Srei Equipment Finance Ltd (SEFL).

US crude dipped 0.34% to $77.17 a barrel, extending a fall from late on Wednesday after hitting a seven-year high of $79.78 earlier that day. Brent crude was steady at $81.04 per barrel, off its three -year high of $83.47 also hit on Wednesday.

The falls followed an unexpected rise in US crude stocks.

Gas prices also fell, a day after Russian leaders indicated that supply to Europe could increase, which contributed to a late rally on Wall Street after declines in European stock markets. 

Worries the US would default on its debt, have weighed on stocks along with the rising energy prices.

The next US event in focus for global investors is payrolls data due Friday, with investors anticipating that a reasonable figure will mean the USFederal Reserve will begin tapering its massive stimulus programme at its November meeting.

The dollar was steady, not too far from 12 month highs hit last month against a basket of currencies , and held at a 14 month high against the Euro.

The yield on benchmark 10-year Treasury notes was 1.5415% off from Wednesday’s three and a half month high of 1.573%.

Spot gold was little changed, trading at $1,761.89 per ounce.

(Reuters contributed to the story)