Greek stocks and bonds surged yesterday, with Athens' main stock exchange closing almost 10% higher on the day after eurozone financial ministers approved a four-month extension to the country's bailout program. Although the list of proposals were accepted, the ministers warned that the reforms must be expanded in detail before new bailout funding would be released. Athens' ATG stock index +0.1%.

China's factory sector edged up to a four month high in February.

China's factory sector edged up but export orders shrank at their fastest rate in 20 months, painting a gloomy outlook that argues for more policy support. The flash HSBC/Markit PMI crept up to 50.1 (just above contraction) in February, while the new export orders sub-index dropped three points to 47.1, the sharpest rate of contraction since June 2013. Meanwhile, Hong Kong's GDP was reported to have slowed to 2.3% in 2014 and weakened to 0.4% in the fourth quarter as pro-democracy protests froze parts of the city.

Bonds rally after yellen revive market expectations for mid year interest hike

Treasury bonds were boosted on Monday, following the release of somewhat disappointing U.S. housing data.

U.S. equities rose and bond yields fell after U.S. Federal Reserve Chair Janet Yellen said on Tuesday it would be several months before the Fed expects to boost interest rates, while European equity markets gained after Greece locked in a four-month extension of its financial rescue programme.

In recent trading, the yield on the benchmark 10-year Treasury note was 2.070%, compared with 2.136% on Friday. Yields fall as bond prices rise. The greenback jumped initially but paired gains and was down 0.1 percent against a basket of currencies (.DXY).

Yellen is scheduled to testify before the Senate banking committee in her semi-annual report on monetary policy today, and will appear before the House Financial Services Committee on Wednesday.

Japan's Nikkei 225 saw its record close since April 2000

Japan's Nikkei 225 Stock Average extended 15-year highs today after U.S. equity gauges climbed to records following Greece's provisional deal on its bailout program. "The debt deal is giving comfort to the market,"as investors' risk appetite is mainly due to Japanese shares' attractive valuations. The Nikkei added 0.7% to 18,466.92 in Tokyo, its highest close since April 2000.

India's January trade deficit

India's trade deficit for the month of January came in at a 11-month low of $8.3 billion. Exports contracted by 11.3% over the year to $23.8 billion and imports declined by 11.4% to 32.2 billion. The trade deficit in January of 2014 was $9.45 billion.

RBI modifies gold import norms

The Reserve Bank of India (RBI) allowed nominated banks to import gold on a consignment basis. All domestic sale of gold however, will be against upfront payment only. Moreover banks are free to grant gold loans.

 

The central bank also clarified that the 80:20 rule will continue to apply in case of un-utilized gold imported before November 28, 2014.

 

Positive signals from developed markets propped up world markets

The major global stock markets witnessed gains during the week. After various discussions, the Eurozone Finance ministers approved a four-month extension on Greece's bailout on Friday. Though the extension will not be final until Greece government makes some submissions. This deal is expected to eliminate the immediate risk of Greece economy running out of money.

The stock markets in US were up by 0.7% during the week, and ended at record highs on Friday. Lifted by depreciating yen, the Japan markets (up 2.3%) surged to 15-year high levels. After witnessing some rally, the oil prices tumbled during the week on the back of higher supply from US. Back home, the Indian stock markets ended the week on a positive note. While the Indian indices continued to surge during the week, Friday witnessed selling activity, weighed down by oil and gas stocks.