SGX Nifty down 35 points; here’s what changed for market while you were sleeping

A spike in Covid cases on both sides of the Atlantic leading to fresh lockdowns, uncertainty over US presidential elections, Thursday’s October series F&O expiry and a host of quarterly earnings will keep domestic equities volatile on Wednesday.

Here’s breaking down the pre-market actions:

SGX Nifty signals negative start
Nifty futures on the Singapore Exchange traded 37.50 points, or 0.32 per cent, lower at 11,850, in signs that Dalal Street was headed for a negative start on Wednesday.

Tech View: Nifty forms bullish candle
Tuesday’s Nifty gains were seen even as Monday’s long bearish candle suggested selling pressure ahead. “In the last few sessions, the formation of long bear candles did not lead to any reasonable follow-through decline,” said Nagaraj Shetti, Technical Research Analyst at HDFC Securities. Tuesday’s upside after Monday’s long negative candle signalled more gains in the market going ahead, Shetti said.

Asian stocks fall in early trade
Japan’s Nikkei 225 fell 0.47 per cent, or 111.52 points, to 23,374.28. Hong Kong’s Hang Seng dipped 0.06 per cent, or 13.65 points, to 24,773.54. China’s benchmark Shanghai Composite ticked 0.06 per cent, or 1.91 points, higher to 3,256.22. MSCI’s gauge of stocks across the globe was down 0.27 per cent.

Oil declines on build in US crude stocks
Oil prices slid more than 1 percent on Wednesday, paring the previous day’s gains, as a jump in U.S. crude inventories and surging COVID-19 cases raised fears of an oversupply of oil and weak fuel demand. In early Asia, Brent crude was down 61 cents, or 1.5%, at $ 40.59 a barrel, having climbed nearly 2% the previous day. U.S. oil was down 66 cents, or 1.7%, at $ 38.91 a barrel, after gaining 2.6% on Tuesday.

US stocks settled lower
After falling hard on Monday on fears of the coronavirus and the lack of new fiscal stimulus from Congress, US markets had a choppier session on Tuesday. The Dow Jones Industrial Average index shed 0.8 percent to 27,463.19. The broad-based S&P 500 declined 0.3 percent to 3,390.68, while the tech-rich Nasdaq Composite index gained 0.6 per cent to 11,431.35.

Q2 earnings today
Axis Bank, Larsen & Toubro, Titan Company, Dr Reddy’s Labs, Hero MotoCorp, Marico, PI Industries, GSK Pharma and ICICI Securities are among companies that will disclose their September quarter results today.

FPIs buy Rs 3,515 cr worth of stocks
Net-net, foreign portfolio investors (FPIs) were buyers of domestic stocks to the tune of Rs 3,514.89 crore, data available with NSE suggested. DIIs were net sellers to the tune of Rs 1,570.80 crore, data suggests.

Rupee: The rupee staged a rebound from the day’s lowest level to settle 13 paise higher at 73.71 against the US dollar on Tuesday, buoyed by upbeat domestic equities and greenback selling by exporters.

10-year bonds: India 10-year bond yield rose 0.21 per cent to 5.84 after trading in 5.83-5.86 range.

Call rates: The overnight call money rate weighted average stood at 3.21 per cent, according to RBI data. It moved in a range of 1.8-3.5 per cent.

Q2 Earnings: Axis Bank I DRL I ICICI Sec I Glaxo I Hero Moto I L&T I Marico I MCX I RBL Bank I Titan
Australia Inflation Rate YoY Q3 (06:00 am)
US Goods Trade Balance Adv Sept (06:00 pm)
US Wholesale Inventories MoM Adv Sept (06:00 pm)
US EIA Crude Oil Stocks Change 23/Oct (08:00 pm)
China Communist Party Annual Meeting

FinMin seeks other views on Voda verdict… The Finance Ministry will seek the views of other ministries, including external affairs, on the law ministry’s opinion regarding whether India should appeal against the arbitration award in the Vodafone tax case. These will be placed before the attorney general for his take on the matter, an official said. However, the call on whether to appeal or not will be taken at the highest political level, he said.

Home, car loan offtake back to normal… Home, vehicle and rural loans are helping banks and non-bank lenders spare their blushes even as they remain risk-averse to unsecured and wholesale credit. Most banks and non-banking finance companies saw their home, vehicle and farm loans surpassing pre-Covid levels in the quarter ended September while the overall credit book shrunk for some lenders.

FM says India to see fastest growth in FY22… The Indian economy may contract or stagnate this fiscal but it will bounce back to be among the fastest growing in the world next year, Finance Minister Nirmala Sitharaman said. Demand revival and the government’s focus on infrastructure, agriculture and related sectors, along with support to sovereign funds and pension funds will drive economic growth, she said at the India Energy Forum by CERAweek. The highest level seen in manufacturing PMI since 2012 signalled revival, she said.

HUL cautious of recovery… Hindustan Unilever Ltd (HUL) chairman Sanjiv Mehta said the country’s biggest consumer goods company cannot “be complacent” despite a strong recovery in the last quarter and has shifted focus to “absolute profit” and volume share rather than just growing value and margins. “It could still be a marathon and there might be many air pockets before we can say that the pandemic is over,” he said in an interview.

Future won’t challenge SIAC ruling… Future Group has decided not to legally challenge the Singapore International Arbitration Centre’s interim ruling that has put the sale of its retail business to RIL on hold as it has taken the view that the SIAC-appointed emergency arbitrator’s verdict cannot be enforced in India. This is in contrast to its earlier position when it was planning to move the Delhi High Court against the verdict.

Faster FDI approvals soon… The government of India, eyeing overseas investments, has begun working to revamp the Standard Operating Procedure (SOP) for processing foreign direct investment (FDI) proposals to fast track approvals. The Department for Promotion of Industry and Internal Trade (DPIIT) is preparing a new set of guidelines to expedite the process for clearances, including security, for investment proposals on the approval route.

GDP may have shrunken 10.4% in Q2… The Indian economy rebounded in the second quarter with gross domestic product likely to have shrunk 10.4% compared with a contraction of 23.9% in the previous quarter, according to Nomura. The Japanese brokerage firm retained its forecast for a 10.8% contraction in FY21. The Nomura Monthly Activity Indicator, which takes into account high-frequency indicators from across sectors, improved to -8.6% yearon-year in September from -19.7% in August and a record low of -37.8% in June, “implying a swift GDP growth rebound,” the firm said in a report on Tuesday.

Core sectors bouncing back… India’s construction, automobiles and energy sectors have bounced back and the government will soon address the downturn in the commercial vehicles sector, commerce and industry minister Piyush Goyal said. He added that the hospitality, aviation and tourism sectors are back to 50%- 60% of pre-Covid levels, and will take another six to eight months to be normal, but compared with Western economies, these sectors have a relatively small share in the GDP.

India’s FDI flow doubles…. Global foreign direct investment (FDI) flows fell 49% in the first half of 2020 compared to 2019 due to Covid-19 impact but India’s investment growth in M&A sales in the digital economy doubled, the United Nations Conference on Trade and Development (UNCTAD) said on Tuesday. It expects flows to developing economies to stabilise with east Asia showing signs of an impending recovery.

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