Markets

SGX Nifty up 30 points; here’s what changed for market while you were sleeping

After domestic benchmark equity indices broke above key resistance ranges in the previous session, chances are that they may kick off Wednesday’s trade on a firm note. Global cues are more or less positive, with eyes on US Fed minutes to be released later in the day.

Here’s breaking down the pre-market actions.

STATE OF THE MARKETS
SGX Nifty signals positive start
Nifty futures on the Singapore Exchange traded 31 points, or 0.27 per cent, higher at 11,442.50, in signs that Dalal Street was headed for a positive start on Wednesday.

Tech View: Nifty forms bullish candle
Nifty50 broke above its crucial resistance zone at 11,350-70 on Tuesday and analysts said the index now looked headed towards the 11,450 level. Nifty formed a strong bullish candle on the daily chart after forming indecisive charts for days, and closed above its 78.6 per cent Fibonacci retracement level, adding to the positive momentum.

Asian shares mostly higher
Asian equities were mostly firmer on Wednesday after a strong Wall Street session in which the S&P500 index hit an all-time high, rebounding from huge losses caused by the coronavirus pandemic. Australia’s S&P/ASX 200 rose 0.1 per cent in early trade while South Korea’s Kospi was up 1 per cent. Japan’s Nikkei 225 edged 0.2 per cent lower.

Oil prices fall in early trade
Oil prices slid on Wednesday as concerns grew that US fuel demand may not recover quickly amid stalled talks on a post-coronavirus economic stimulus package, overshadowing a bigger-than-expected drawdown in US crude stocks. Brent crude futures fell 38 cents, or 0.8 per cent, to $ 45.08 a barrel, having edged up 9 cents on Tuesday.

US stocks settled mixed
The S&P500 index gained 7.79 points, or 0.23 per cent, to end at 3,389.78, surpassing its previous record close on February 19. The Nasdaq Composite Index rose 81.12 points, or 0.73 per cent, to 11,210.84, also a record close. However, the Dow Jones Industrial Average fell 66.84 points, or 0.24 per cent, to 27,778.07.

Q1 earnings today
Muthoot Finance, CSB Bank, Ruchi Soya Industries, V2 Retail, Ramky Infrastrcuture, Tips Industries are among companies that are slated to announce their June quarter earnings on Wednesday.

FIIs buy Rs 1,135 crore worth of stocks
Net-net, foreign portfolio investors (FPIs) were buyers of domestic stocks to the tune of Rs 1,134.57 crore, data available with NSE suggested. DIIs were net sellers to the tune of Rs 379.38 crore, data suggests.

MONEY MARKETS
Rupee: The rupee settled 12 paise higher at 74.76 against the US dollar on Tuesday as heavy buying in domestic equities and weak American currency strengthened investor sentiments.

10-year bonds: India 10-year bond yield rose 0.17 per cent to 5.98 after trading in 5.97-5.99 range.

Call rates: The overnight call money rate weighted average stood at 3.48 per cent, according to RBI data. It moved in a range of 1.80-4.10 per cent.

DATA/EVENTS TO WATCH

  • CSB Bank I Muthoot Finance I Ruchi Soya I
  • Japan July Balance of Trade (05.20 am)
  • UK July Rate of Inflation (11.30 am)
  • EIA Crude Oil Stocks Change (08.00 pm)
  • FOMC Minutes (11.30 pm)
  • UK-EU Brexit Talks

MACROS

Fed minutes to be released today
Minutes from the Fed’s recent meeting due on Wednesday may provide some insight into how the central bank sees the recovery playing out. The Fed has cut rates to near zero to bolster business through the pandemic The Fed’s intervention in financial markets to maintain liquidity has weakened the dollar, pushed risk assets to all-time highs and reduced demand for safe-havens.

Banks write off Rs 19,000 cr legacy loans… India’s 10 largest banks have written off large legacy loans worth a combined Rs 19,000 crore in June quarter, in a bid to keep gross non-performing assets under check. The writedown is over 10% more than the same period last year, when they together wiped clean off their books nearly Rs 17,000 crore in bad loans, data compiled by ET showed.

Top retail brands avail rental discounts… Several top retailers, including Aditya Birla Fashion, Shoppers Stop, Reliance Retail and Tata Trent, successfully negotiated sizable rental discounts in the April-June quarter from malls across major metros. Malls were either shut or operated under multiple restrictions in this period dominated by lockdowns. The rent discounts indicate increased pressure on mall operators and landlords. A big portion of consumers continue to stay away from high streets and shopping malls amid the pandemic.

Fund managers turn bullish on equity… The bullish sentiment among global fund managers has returned to levels seen before the pandemic and they are no longer seeing the rally in financial markets as a bear market rally, showed the Bank of America fund manager survey of August. Investors are expecting higher growth and announcement of a Covid-19 vaccine early in the first quarter of 2021.

5 million salaried employees lose jobs… Nearly 5 million salaried employees lost their jobs in July, taking the total number to 18.9 million due to the Covid-19 pandemic and the lockdown that followed, said CMIE. That marks a reversal from a brief recovery in salaried jobs in June and likely reflects a slump due to the imposition of mini shutdowns in containment zones. However, counting the informal sector, overall job losses narrowed in the month sequentially from April, it said in a report released on Tuesday.

Jio tells SC RCom AGR dues not its liability… Reliance Jio told the Supreme Court on Tuesday that it cannot be asked to pay entire AGR dues of RCom for sharing its spectrum and can be made liable to pay for only the portion of spectrum used by it, which is 23.5 per cent. Senior advocate Harish Salve said Jio had cleared all AGR dues by depositing Rs 195 crore with the government, including the AGR dues arising out of using RCom spectrum.

Airtel to replace Huiwei, ZTE in 5G trials… Bharti Airtel is preparing to replace Huawei and ZTE with European vendors for 5G trials. People familiar with the matter said Airtel will soon submit fresh applications for the trials in Kolkata and Bengaluru with Finland’s Nokia and Sweden’s Ericsson, instead of the Chinese companies with which it had previously tied up.

Bankruptcy fears help settle 9,650 cases… The fear of the bankruptcy action has helped settle over 9,650 cases involving claims of around Rs 3.7 lakh crore, with companies and their promoters settling the dues before the case was admitted in the NCLT. Up to December 2019, this debt had been settled as operational creditors, such as suppliers, or financial creditors, like banks, threatened to initiate action, data with the Insolvency & Bankruptcy Board of India (IBBI) showed.

Now, Templeton puts curbs on FOFs… Franklin Templeton has imposed investment curbs on three of its asset allocation fund of fund schemes, which invested a part of their debt allocation in two plans that are part of the six the fund house decided to wind up late April. “In limiting inflows into the FoFs, our attempt is to gate any arbitrage opportunities available to new investors while protecting the interest of existing investors,” said a spokesperson for the fund house said.

T Rowe Price to hike stake in UTI… US asset manager T Rowe Price is set to increase its stake in UTI Trustee Company to 51% from 26%, a move that will put the firm in the driver’s seat at the country’s eighth-largest mutual fund, two people with direct knowledge of the development said. T Rowe Price, already the biggest shareholder in UTI Mutual Fund, will acquire a portion of the shareholding of LIC, SBI and BoB in the trustee company.

Indiabulls set to exit real estate… Indiabulls group is close to a deal that will see its exit from the real estate development space, one of the areas its name has been associated with for years. This would be a three-way deal involving Indiabulls group, Bangalore-based real estate major Embassy group and global private equity giant Blackstone. It will result in the unlisted Nam Estates merging into the listed Indiabulls Real Estate through a share-swap deal. This would create the second-largest listed real estate entity in India, after DLF.

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