US Jobs Data, SEBI Pulls Up Ola, Tata Steel's Q3 Update | Rise With Profit

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The latest data from the US is pointing to resilience—and that’s a case of good news is bad news for equity markets globally. I’ll get to why in just a bit. First, let’s look at the latest updates. US job openings unexpectedly increased in November, but softer hiring pointed to a slowing labour market, according to a Reuters report.

The Labour Department’s latest Job Openings and Labor Turnover Survey, or JOLTS report, showed that job openings rose 259,000 to 8.1 million by the end of November. What’s more, the data for October was revised higher to show 7.84 million vacancies, instead of the earlier projected 7.74 million. This means that companies have scope to hire more.

The second piece of data is the Institute of Supply Management’s non-manufacturing purchasing managers’ index, which increased to 54.1 last month from 52.1 in November. That’s a high frequency indicator that points to increased activity in the services space. At the same time, a measure of prices paid for inputs rose to a two-year high, which pointed to stubborn inflation.

The projection that inflation will remain sticky and that the US economy is staying resilient has pushed back expectations of rate cuts in 2025. And that, in turn, has caused bond yields to spike—particularly those on the 10-year and 30-year Treasuries.

The 10-year US yield is at the highest in eight months and the yield curve between the two-year and 10-year is at the steepest in nearly three years. Meanwhile, the 30-year yield is within 10-basis points of 5%. The yields on the 10-year and 30-year have climbed about 60 basis points in a month.

Higher yields push up the risk-free return available to investors and that pulls capital away from other, riskier asset classes like equity. On Wall Street, the three benchmarks closed lower on the back of a selloff towards the end of trade, but they ended off the low point of the day. The Dow lost 0.4%, while the S&P 500 and the Nasdaq dropped 1.1% and 1.9%, respectively. It’s a mixed start to trade in the Asia Pacific region, meanwhile, with the Nikkei 225 in Japan lower by 0.7% and the Kospi in South Korea flat.

In the top news back home, the Indian economy is estimated to grow at the slowest pace in four years, as per the government's first advance estimates. The GDP is estimated to grow 6.4% in the current year, according to the first advance estimates released by the Central Statistics Office, ahead of the Union budget. This is compared to a provisional estimate of 8.2% for the previous financial year. This is in line with consensus estimates of economists, as polled by Bloomberg.

Gross value added, which strips out indirect tax and subsidies, is expected to rise 6.4%, as compared with a growth of 7.2% in the previous fiscal.

In quarterly updates, Tata Steel has said that its production in India grew 6% year-on-year to 5.68 million tonnes in the quarter ended December. This was possible due to the commissioning of the blast furnace of 5 million tonnes per annum at Kalinganagar, Odisha, in September. With an 8% YoY growth, the steel major's India deliveries for the quarter under review stood at 5.29 MT.

The company’s production and delivery volumes at its Netherlands arm rose at a healthy pace, while delivery volumes dropped at its UK arm.

Updates in the Futures & Options space. Markets regulator SEBI has said that F&O contracts of six companies, which are NBCC (India) Ltd., Torrent Power Ltd. and Gland Pharma Ltd., Castrol India Ltd., Phoenix Mills Ltd. and Solar Industries India Ltd. will begin trading from Jan. 31.

And finally, SEBI has pulled up Ola Electric Mobility Ltd. for announcing its expansion plans on social media first and not on the exchanges. The warning doesn’t have any material impact on financials, though. In a warning letter, the regulator said that by failing to first disseminate information on the stock exchanges and instead announcing it on a social media platform, the company had failed to provide equal and timely access to information for all investors.

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