Markets

SGX Nifty down 120 points; here’s what changed for market while you were sleeping

Domestic stocks looked set for a gap-down start on Thursday, as the minutes of the July 28-29 Fed policy meeting suggested a tough road ahead for the US economy. Stocks fell on Wall Street overnight and in Asian markets this morning.

Here’s breaking down the pre-market actions.

STATE OF THE MARKETS

SGX Nifty signals gap-down start
Nifty futures on the Singapore Exchange traded 119 points, or 1.04 per cent, lower at 11,303.50, in signs that Dalal Street was headed for a gap-down start on Thursday.

Tech View: Nifty forms bearish candle
Nifty50 on Wednesday formed a bearish candle on the daily scale after breaking out of a crucial range in the previous session, which disappointed analysts. The silver lining from the session was the fact that the index managed a close above the 11,400 mark, and formed a higher high and low for the second session, suggesting that supports have shifted higher.

Asian markets drop in early trade
Japan’s Nikkei 225 index was down 0.46 per cent or 105.59 points at 23,005.02 in early trade. Hong Kong’s Hang Sang index slipped 0.49 per cent, or 123.56 points, to 25,055.35. China’s benchmark Shanghai Composite index declined 0.65 per cent, or 22.16 points, to 3,385.96.

Oil eases on demand risks, US stockpile data
Oil prices fell on Thursday as major producers warned of a risk to the recovery in demand if the coronavirus crisis is prolonged, while US crude inventories dropped less than expected. Brent crude was down 28 cents, or 0.6 per cent, at $ 45.09 after slipping 0.2 per cent in the previous session. US oil was down 31 cents, or 0.7 per cent, at $ 42.62 a barrel, after inching higher on Wednesday.

US stocks fall on Fed minutes
US stocks finished lower on Wednesday after the minutes from the Federal Reserve’s July meeting showed concerns about economic outlook.The Dow Jones Industrial Average decreased 85.19 points, or 0.31 per cent, to 27,692.88. The S&P 500 fell 14.93 points, or 0.44 per cent, to 3,374.85. The Nasdaq Composite Index was down 64.38 points, or 0.57 per cent, to 11,146.46.

Apple makes Wall Street history
Apple Inc made Wall Street history on Wednesday when its 2020 stock surge pushed the market value past $ 2 trillion, the first time a US company has surpassed that level. Shares of the iPhone maker rose as much as 1.4% to $ 468.7 in midday trading. The stock has more than doubled off a March low, in a rally that has been driven by strong earnings results and optimism over its upcoming 5G iPhone.

Q1 earnings today
Moil, Indian Overseas Bank, IRB InVit Fund, Madhucon Projects, Healthcare Global Enterprises, Salora International and Modern India are among companies that are slated to announce their June quarter earnings on Thursday.

FIIs buy Rs 459 crore worth of stocks
Net-net, foreign portfolio investors (FPIs) were buyers of domestic stocks to the tune of Rs 459 crore, data available with NSE suggested. DIIs were net sellers to the tune of Rs 97 crore, data suggests.

MONEY MARKETS
Rupee: The rupee pared its initial gains to settle 6 paise lower at 74.82 against the US dollar on Wednesday.. At the interbank forex market, the domestic unit opened at 74.71 against the US dollar, but lost ground and finally settled at 74.82 against, down 6 paise over its previous close of 74.76.

10-year bonds: India 10-year bond yield rose 0.37 per cent to 6 after trading in 5.99-6.01 range.

Call rates: The overnight call money rate weighted average stood at 3.42 per cent, according to RBI data. It moved in a range of 1.80-4.10 per cent.

DATA/EVENTS TO WATCH

  • Earnings: HCG I IOB I MOIL I McDowell
  • RBI Money Policy Review Minutes (05.00 pm)
  • China Loan Prime Rate (07.00 am)
  • Euro Area June Construction Output (02.30 pm)
  • US Aug 15 Initial Jobless Claims (06.00 pm)
  • Russia July Unemployment Rate (06.30 pm)
  • UK-EU Brexit Talks

MACROS
Fed minutes highlight tough recovery… Minutes of the July Fed meeting released overnight raised concerns that the US economic recovery from the devastating effects of the pandemic faced a highly uncertain path. The policy committee said that the swift rebound in employment seen in May and June had likely slowed and that additional “substantial improvement” in the labor market would hinge on a “broad and sustained” reopening of business activity. It also ruled out for now more dovish monetary policy measures such as the yield-curve control.

World Bank warns of slower India recovery… The World Bank said on Wednesday that it may project a steeper contraction for Indian economy in its revised outlook, which will be available in October, as the coronavirus continues to spread and authorities unveil localised lockdowns. It also urged the government to continue with implementation of critical reforms in key areas like health, labour, land, skills and finance to come out stronger from the impact of the pandemic.

Dipam yet to open account on share sale… Almost five months into the financial year, Dipam is yet to open its account, although it is chasing a record disinvestment target of Rs 2.1 lakh crore, raising doubts over its ability to complete transactions. The plan to sell off several loss-making companies has been a non-starter, but the government is unwilling to call them off either. There are murmurs within the government over Dipam holding back on IPOs and follow-on public issues, despite a recovery in the stock markets.

Covid shot in arm for health insurers… The Covid-19 pandemic has provided a booster shot to the health insurance business in the country. With 130 new products launched in four months, the segment has overtaken motor to become the largest business for non-life companies. Motor insurance, which accounted for 38% of industry premiums, has fallen to 30% while health, which was 30% last year, has risen to 33%. Data collated by the General Insurance Council shows the retail health portfolio of non-life insurers up to July was Rs 3,596 crore, an increase of 17%.

Cabinet clears lease-out of 3 airports… The Cabinet on Wednesday allowed relaxation in working capital lending limits for discoms. It also okayed proposals to hike Fair and Remunerative Price for sugarcane by Rs 10 to Rs 285 per quintal and to lease out airports at Jaipur, Guwahati and Thiruvananthapuram under PPP for a 50-year period.

Sebi may tweak norms for firms out of insolvency… Sebi has proposed changes to the minimum public shareholding requirements and enhanced disclosures for companies emerging out of the insolvency process. The regulator on Wednesday proposed three options to increase public holding post the CIRP. All listed companies are required to maintain a minimum public shareholding of 25%

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