A rally in US stocks overnight and its ruboff on Asian shares is likely to aid sentiment in India on Thursday where the market is lacking direction. The expiry of weekly options contracts is likely to dictate market moves through the day. A slew of big June quarter earnings scheduled for the day would be watched keenly.
Here’s breaking down the pre-market actions.
STATE OF THE MARKETS
SGX Nifty signals positive start
Nifty futures on the Singapore Exchange traded 20.50 points, or 0.18 per cent higher at 11,331.50, in signs that Dalal Street was headed for a positive start on Thursday.
Tech View: Nifty lacks direction
Nifty50 on Wednesday saw a gap-down start, but managed to recoup most of the losses towards the end. The index formed an indecisive ‘Doji’ formation on the daily chart for yet another session. For Thursday, any violation of the 11,240 level may cause weakness and make Nifty drift towards the 11,200-11,160 zone. Intraday resistance is placed in the 11,320-11,340 zone.
Asian stocks gain in early trade
Hong Kong’s Hang Seng Index rallied 0.97 per cent, or 246.00 points, to 25,490.02. China’s benchmark Shanghai Composite index rose 0.27 per cent, or 8.91 points, to 3,328.18. Japan’s Nikkei225 jumped 276.65 points or 1.21 per cent to 23,120.61 in early trade.
US stocks settled higher
US stocks ended higher as major tech shares recouped some of their losses from the prior session. On Wednesday, the Dow Jones Industrial Average increased 289.93 points, or 1.05 per cent, to 27,976.84. The S&P 500 rose 46.66 points, or 1.40 per cent, to 3,380.35. The Nasdaq Composite Index jumped 229.42 points, or 2.13 per cent, to 11,012.24.
Crude prices start weak
Crude oil prices dipped. WTI futures fell 0.2% to $ 42.57 a barrel in early Asian trade.
Q1 results today
BPCL, Eicher Motors, Hero MotoCorp, Tata Steel, GAIL, Grasim Industries, Balkrishna Industries, Power Finance Corporation, Trend, Godrej Industries, Prestige Estates and Endurance Technologies are among companies which will announce their June quarter results today.
DIIs sell Rs 940 cr worth of stocks
Net-net, foreign portfolio investors (FPIs) were buyers of domestic stocks to the tune of Rs 351.15 crore, data available with NSE suggested. DIIs were net sellers to the tune of Rs 939.67 crore, data suggests.
Rupee: The rupee declined by 5 paise to close at 74.83 against the US dollar on Wednesday due to losses in equity markets and weak industrial production data.
10-year bonds: India 10-year bond yield fell 0.32 per cent to 5.88 after trading in 5.88-5.92 range.
Call rates: The overnight call money rate weighted average stood at 3.47 per cent, according to RBI data. It moved in a range of 1.80-4.10 per cent.
DATA/EVENTS TO WATCH
- Earnings: BPCL I DB Corp I Eicher I EIH I EIL I GAIL I Godrej Ind I Grasim I Prestige Estate I Tata Steel
- Japan July Purchasing Price Index (05.20 am)
- Australia July Unemployment Rate (07.00 am)
- India WPI Inflation for July (05.00 pm)
- India Weekly Index Options Expiry
- US Initial Jobless Claims Aug 8 (06.00 pm)
Fuel demand flatlines in revival signs… India’s fuel demand is beginning to flatline after showing signs of returning to life, as consumption dipped 11.7% in July, official data showed. Fuel consumption, a barometer of economic activity in the country, had slumped by over 45% in April as nationwide lockdown halted most vehicular traffic and shut industries.
Unemployment benefit criteria to be eased…. The labour ministry will soon move a proposal to significantly relax the eligibility criteria for availing unemployment benefits under the Employees’ State Insurance Corporation scheme besides enhancing the quantum of benefits to 50 per cent of last drawn wages and double the support period to six months. It will also propose to do away with the condition that the benefit can be availed only once in a lifetime and enhance the tenure of benefit.
PM to unveil new tax platform… Prime Minister Narendra Modi will on Thursday launch a new platform, “Transparent Taxation – Honouring the Honest”, which will carry forward the journey of direct tax reforms, an official statement said. The virtual event will be witnessed by various chambers of commerce, trade associations, chartered accountants’ associations and “eminent” taxpayers.
General insurers get a shot in the arm… General insurance companies bucked the sluggish growth seen in the first quarter of FY21 to register an 18% yearon-year growth in underwritten premiums in July led largely by a massive uptick in demand for health insurance policies. These companies registered premium collections worth Rs 17,011 crore in July 2020 against Rs 14,369.51 crore in July 2019, latest data released by Irdai showed. The first quarter of FY21 had seen general insurance companies see new premium collections contract 4%.
India Inc may continue work for home in 2020… It is likely to be work from home for a majority of the India Inc employees for the rest of 2020. Only 3 out of 10 employees are willing to return to offices across 550 organisations belonging to 15 industry sectors, according to a survey conducted by Xpheno, a specialist staffing firm, exclusively for ET. Xpheno reached out to 1,800 employees through the survey where 70% of the employees state that they prefer to work from home (WFH) until the end of this year.
Small window for RBI’s loan recast… Banks have been advised to be ready with the list of borrowers who will be eligible for one-time debt restructuring under a special window opened by RBI to tackle stress due to the Covid-19 pandemic. There have been doubts over the one-time loan restructuring scheme being fully available, given that the committee under veteran KV Kamath will start functioning after a few days and will have another 30 days to submit its recommendations before RBI notifies the norms.
Bank’s bad loan recovery hits wall… Bad loan recovery of Indian banks dropped by one-third in June quarter compared to the previous three months, with cases in bankruptcy courts barely moving and sale of bad loans to asset reconstruction companies virtually drying up. Top 10 banks that ET analysed recovered and upgraded loans worth Rs 10,148 crore at the end of June quarter. They had recovered Rs 15,171 crore in March quarter and Rs 14,742 crore at the end of June 2019.
No macro bull cycle ahead… Bernstein Research said the debate on the potential for the next large cycle has begun with economic growth expected to fall to historic lows — similar to the slump seen in the FY01-FY03 phase. While the firm expects a rebound in economic growth in the second half of FY21and FY22, it sees “less room for a multi-year bull macro cycle”.
RIL in talks to invest in TikTok’s India ops?…RIL is engaged in an early-stage exercise to evaluate the possibility of investing in TikTok’s India operations, according to at least six people aware of the matter. The development comes even as the clock is ticking on Microsoft’s fast-tracked negotiations to buy large swathes of the Chinese short-video platform’s global operations ahead of the September 15 deadline set by the Donald Trump administration.