WEEKLY MARKET ROUND-UP

Stocks rose, and the bond yields fell in India and the US because softer-than-expected US jobs data reinforced expectations that the Federal Reserve is done with its rate-raising campaign.

US bond yields fell for four days in a row last week.

Nonfarm payrolls increased by 150,000 jobs last month, below economists’ expectations for a gain of 180,000. Data for September was revised lower to show 297,000 jobs created instead of 336,000, as was previously posted by the Bureau of Labor Statistics.

The Indian bond market remained wary of the possibility of the Reserve of India selling bonds under its open market operations, and that limited the fall in Indian bond yields.

Domestic Markets Last Week:

Stocks rose for the week, snapping a two-week losing streak. The rise was mainly due to the comfort that the US Fed may be doing with its interest rate hiking campaign. The main indices rose 1% for the week. IT companies' shares rose. Real-estate companies, too, surged, with the index hitting a record high.

Yields were only slightly changed on Friday but were down for the week owing to a fall in the US yields after the markets reckoned that the US central bank may be done with rate hikes. The cutoffs at the weekly auctions were in line with expectations. The market remains nervous about the possibility of the RBI conducting open market operations.

The rupee weakened against the US dollar on Friday, and for the week, it was only a little changed. The absence of strong inflows resulted in the rupee having a bias to weaken. Dollar sales by the RBI prevented a sharper fall. Most Asian currencies fared better than the rupee during the week against the dollar.

Global Markets Last Week:

US stocks posted the biggest weekly gains in almost one year because weaker-than-expected job growth drove down the treasury yields. Expectations were that the US Fed would hold interest rates steady at the present level for several months. Most sectoral indices rose, led by rate-sensitive ones. The tech-heavy NASDAQ rose six days in a row.

Treasury yields fell during the week on the view the Fed is at the peak of its rate-hiking campaign. The 10-year yield fell to a five-week low, and the 2-year yield was at an almost eight-week low. Softener-than-expected jobs data also added to the buying interest in bonds.

The US dollar suffered one of its biggest weekly losses in about three months as data showed US jobs growth was lower than expected. This reinforced expectations that the Fed may be done with interest rate hikes. On the week, the dollar was down 0.2% versus the yen, its biggest weekly loss since late July.

Corporate Bonds

Secondary Market

Yields were mostly flat as big trading was avoided Friday ahead of the US non-farm payroll data. The broader market was concerned about the prospects of open market operations.

Outlook For This Week

Stocks will likely rise, tailing the rise in US stocks, and a fall in the US treasury yields. The market is comforted by the view that Fed is done with its rate hikes. Bond yields are likely to soften but trained may remain wary of the possibility of the RBI conducting open market operations. The rupee is likely to rise slightly.

In Other news

An earthquake of 6.4 magnitude rocks western Nepal, and tremors felt in north India, China

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