Sensex, Nifty Seen Up As Economic Data Brings Cheer

Indian shares look set to open a tad higher on Tuesday as investors cheer better-than-expected macroeconomic data.

India’s economy shrank 7.3 percent in the fiscal year ended March 31, preliminary estimates from the statistics ministry showed.

The government had earlier forecast 8.0 percent decline in gross domestic product for the year during which economic activity was severely hurt by the coronavirus pandemic.

In the January to March quarter, the economy grew 1.6 percent year-on-year, which was faster than the 1.0 percent expansion that economists had forecast. The December quarter growth was revised to 0.5 percent from 0.4 percent.

Meanwhile, the output of eight core sectors jumped by as much as 56.1 percent in April mainly due to a low base effect and uptick in production of natural gas, refinery products, steel, cement and electricity.

Separate government data showed that the country’s fiscal deficit for the financial year 2020-21 was 9.3 percent of GDP, which was less than the 9.5 percent estimated earlier.

Benchmark indexes Sensex and the Nifty jumped about 1 percent on Monday, while the rupee dropped 17 paise to close at 72.62 against the dollar, snapping a three-day winning streak.

Asian markets held steady this morning after a slew of surveys signaled an ongoing expansion in regional manufacturing activity, thanks to recovery in global demand.

South Korean shares led regional gains after data showed the country’s exports logged their sharpest expansion in 32 years in May.

The dollar dipped and China’s offshore yuan advanced despite China forcing banks to keep more foreign currencies in reserve for the first time in over a decade.

The British pound hit a three-year high amid bets the U.K.’s economic recovery is gaining traction with the rollout of coronavirus vaccines.

Treasury yields rose ahead of key American jobs data due out later this week. Gold held steady after posting the heaviest monthly jump since July 2020.

Oil prices jumped after OPEC and its allies forecast that oil stockpiles will diminish rapidly in the second half of the year.

European stocks fell on Monday as investors reacted to signs of rising inflation in Germany as well as soft data from China and Japan.

The pan European Stoxx 600 dropped half a percent. Germany’s DAX and France’s CAC 40 index both shed around 0.6 percent.

Markets in the U.K. and U.S. were closed for Bank Holiday and Memorial Day, respectively.