Markets & Finance News

Stocks and the dollar fell on Monday while the Japanese yen, gold and sovereign bonds rose after North Korea's most powerful nuclear test to date dampened investor appetite for risk.

The euro clung to most of its recent gains on Monday while the dollar struggled against a broad swathe of currencies and its trade-weighted basket approached a 2-1/2 year low.

The dollar struggled on Monday with a trade-weighted basket approaching a 2-1/2 year low as North Korea's latest nuclear tests prompted a rush to unwind bets with the euro the only notable exception to the broad market sell-off.

Emerging markets were shaken on Monday by North Korea's most powerful nuclear test yet, with stocks suffering their steepest loss in more than three weeks while South Korea's bourse and currency plumbed multi-week lows.

The dollar fell against the Japanese yen and the Swiss franc on Monday as concerns about geopolitical risks following North Korea's latest nuclear test over the weekend prompted a rush to traditional currency hedges.

* Risk sentiment wobbles after N.Korea's nuclear test on Sunday (Updates prices)

* More selling seen in coming days due to Monday's U.S. holiday

The Japanese yen, gold and sovereign bonds all rose on Monday as North Korea's latest nuclear test, and reports Pyongyang was making preparations for another missile launch, provoked the usual knee-jerk shift to safer harbours.

* Risk sentiment wobbles after N.Korea's nuclear test on Sunday (Updates prices, adds comments)

To access the newsletter, click on the link: http://share.thomsonreuters.com/assets/newsletters/Indiamorning/MNC_IN_09042017.pdf If you would like to receive this newsletter via email, please register at: https://forms.thomsonreuters.com/india-morning/ FACTORS TO WATCH 10:00 am: Minister of Skill Development and Entrepreneurship Dharmendra Pradhan and Minister of State Skill Development and Entrepreneurship Anant Kumar Hegde to assume charge of their portfolios in New Delhi. 11:00 am: New Trade Minister Suresh Prabhu to take charge of portfolio in New Delhi. 5:00 pm: New Railway Minister Piyush Goyal to take charge of portfolio in New Delhi. 6:15 pm: New Power Minister to take charge of portfolio in New Delhi. LIVECHAT - CHINA COMMODITIES Amid the surprising appreciation of the Chinese yuan against the dollar this year, will the commodity rally in China continue to have steam? Simon Ting, a futures trader from Strait Financials, will discuss the outlook of commodities at 09:00 am IST. To join the conversation, click on the link: https://forms.thomsonreuters.com/communities/ INDIA TOP NEWS • India appoints new defence minister, rejigs cabinet to refocus on economy Prime Minister Narendra Modi appointed Nirmala Sitharaman as defence minister on Sunday as part of a cabinet reshuffle, as he seeks to get economic growth back on track and modernise the armed forces before national elections in 2019. • ANALYSIS-Slowdown-hit Indian economy counts costs of stronger rupee India's stronger currency has become a threat for its growth aspirations, piling pressure on the central bank to aggressively intervene in the foreign exchange market even at the risk of incurring the wrath of the United States. • India's former cenbank head says had cautioned government on demonetization -report Former central bank head Raghuram Rajan had cautioned the government that short-term costs of a radical ban of high-value currency notes would outweigh the long-term benefits, Times of India newspaper reported on Sunday. • Adani at odds over royalty negotiations for Australian coal mine -paper Adani Enterprises appears to be at odds with the state of Queensland over royalties for its Carmichael coal project, according to a media report, just days after the Indian company said it would soon break ground on the Australian mine. GLOBAL TOP NEWS • South Korea conducts missile drill after N.Korea nuclear test rattles globe South Korea's military carried out a missile drill in response to North Korea's sixth nuclear test, while global markets reacted to the sharp escalation in tensions between Pyongyang and the United States. • Trump to scrap protection for "Dreamers," give Congress 6 months to fix U.S. President Donald Trump has decided to scrap a program shielding immigrants who came to the United States illegally as children from deportation but will give Congress six months to craft a bill to replace it, sources familiar with the situation said. • Hong Kong, Singapore in talks to grab bigger share of derivatives business Hong Kong and Singapore are seeking to snare a bigger share of the $540 trillion global derivatives business, taking advantage of tough new UK and European banking rules and uncertainty created by Britain's plans to leave the European Union. LOCAL MARKETS OUTLOOK (As reported by NewsRise) • Indian government bonds are likely to trade higher as weaker-than-expected domestic growth has boosted expectations of future rate cuts. The yield on the benchmark 6.79 percent bond maturing in 2027 is likely to trade in a 6.45 percent-6.50 percent band. • The Indian rupee will likely open higher against the dollar, tracking gains in the non-deliverable forwards trade in the previous session, even as North Korea’s latest nuclear test over the weekend sparks risk-aversion. GLOBAL MARKETS • Wall Street gained modestly on Friday as a tepid U.S. jobs report kept expectations muted for another interest rate hike this year, while investors kicked off a typically dour month for stocks on a positive note. • The Japanese yen, gold and sovereign bonds all rose early as North Korea's latest nuclear test provoked the usual knee-jerk shift to safe havens, while futures pointed to a difficult day for global equities. • U.S. Treasury yields rose on Friday as strong manufacturing data boosted sentiment that economic growth is solid, even after the August jobs report was weaker than economists expected. • Oil markets were volatile, supported by shutdowns of U.S. production following Hurricane Harvey, but pressured by an expected downturn in crude demand as the storm knocked out refineries along the Gulf of Mexico coast. CLOSE FII INVESTMENTS EQUITIES DEBT PNDF spot 64.01/64.04 September 1 -$130.12 mln -$11.87 mln 10-yr bond yield 6.76 pct Month-to-date -$1.97 bln - Year-to-date $7.01 bln $23.13 bln For additional data: India govt bond market volumes Stock market reports Non-deliverable forwards data Corporate debt stories [IN CORPD] Local market closing/intraday levels [IN SNAPSHOT] Monthly inflows [INFLOWS RTRS TABLE IN] ($1 = 64.0200 Indian rupees) (Compiled by Erum Khaled in Bengaluru)