Markets

SGX Nifty up 40 points; here’s what changed for market while you were sleeping

NEW DELHI: Data showing a major plunge in June quarter US GDP growth depressed sentiments in Asian markets this morning, but Street-beating earnings from the Tech Quartet of Alphabet, Apple, Facebook and Amazon lifted the mood back on Wall Street.

Domestic equities may choose to pay more heed to domestic earnings, where many Nifty heavyweights are either scheduled to announce their numbers later in the day or have delivered them post market hours on Thursday.

Here’s breaking down the pre-market actions.

STATE OF THE MARKETS
SGX Nifty signals positive start
Nifty futures on the Singapore Exchange traded 38 points, or 0.34 per cent higher at 11,139, in signs that Dalal Street was headed for a positive start on Friday.

Market-wide rolls 91%, Nifty at 78%
Market-wide rollovers of F&O contracts stood at 91 per cent. Nifty futures rollovers stood at 78 per cent, which were higher than the average rollovers of 75 per cent in the last three series. Stock futures rollovers at 93 per cent were in line with the average rollovers seen in the last three series.

Tech View: Nifty forms bearish candle
With Thursday’s fall, the index has closed near its eight-day support at 11,080, which remains an important level to watch out for, said Rajesh Palviya of Axis Securities. The 11,150-11,200 zone will act as a key resistance, he said.

Asian markets mixed in early trade lower
Japan’s Nikkei 225 index was down 0.20 per cent or 44.18 points at 22,295.05 in early trade. Hong Kong’s Hang Seng added 0.15 per cent, or 36.70 points, to 24,747.29. But the benchmark Shanghai Composite index dipped 0.18 per cent, or 6.03 points, to 3,280.80.

Oil recovers from 3-week lows
Oil prices rose on Friday, recovering further ground after touching three-week lows in the previous session, hit by a record decline in US growth as the coronavirus ravaged the world’s biggest economy and oil consumer. Brent crude was up by 40 cents, or 0.9 per cent, at $ 43.34 a barrel. On Thursday, Brent closed down 1.9 per cent but had recovered much of the ground lost from the lowest level since July 10.

US stocks fall as GDP shrinks
Wall Street’s major averages closed mostly lower after data showed the US economy contracted massively in the second quarter. On Thursday, the Dow Jones Industrial Average decreased 225.92 points, or 0.85 per cent, to end at 26,313.65, after dropping more than 500 points earlier in the session. The S&P500 index fell 12.22 points, or 0.38 per cent, to 3,246.22. The Nasdaq Composite Index increased 44.87 points, or 0.43 per cent, to 10,587.81.

Q1 earnings today
SBI, Sun Pharmaceutical Industries, IOC, UPL, Tata Motors, UCO Bank, Dr Pathlabs, Tata Chemicals, JSW Energy, Ujjivan SFB and Godrej Agrovet are among companies which will declare June quarter results on Friday.

DIIs sell Rs 387 cr worth of stocks
Net-net, foreign portfolio investors (FPIs) were buyers of domestic stocks to the tune of Rs 207.30 crore, data available with NSE suggested. DIIs were net sellers to the tune of Rs 387.24 crore, data suggests.

MONEY MARKETS
Rupee: The rupee fell 4 paise to close at 74.84 against the American currency on Thursday amid month-end dollar demand from importers and a weak trend in domestic equities.

10-year bonds: India 10-year bond yield fell 0.17 per cent to 5.82 after trading in 5.81-5.85 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: SBI I Sun Pharma I Tata Motors I IOC I JSW Energy I Motilal Oswal I RCom I Reliance Capital I
  • India June Infra Output (05.00 pm)
  • RBI Forex Reserve as of July 24 (05.00 pm)
  • India June Budget Deficit (05.00 pm)
  • India Bank Loan Growth as of July 17 (05.00 pm)
  • Japan June Unemployment Rate (05.00 am)
  • China July Non-Manufacturing PMI (06.30 am)
  • Japan June Housing Starts (10.30 am)
  • UK July Nationwide Housing Prices (11.30 am)
  • US June Personal Spending (06.00 pm)

MACROS

US economy contracts 33% in Q2… The 32.9 percent GDP contraction, though slightly better than expected, was the worst experienced by the world’s largest economy since at least 1947 and underscored the severity of the rapidly unfolding crisis, which has already destroyed tens of millions of jobs, AFP reported

Jobless claims in US rise… After surging in March amid the massive job losses at the start of the pandemic, first time claims for jobless benefits have been falling for weeks, but they rose again to 1.43 million in the week ended July 25, the US Labor Department said on Thursday.

Big Tech Quartet beats Wall Street …
The Big Tech quartet reported quarterly earnings on the same day for the first time ever, all topping Wall Street estimates. Facebook beat analysts’ estimates and forecast similar growth ahead. Apple delivered blowout quarterly results, reporting revenue gains across every category and in every geography. Amazon.com posted the biggest profit in its 26-year history, as online sales and its lucrative business supporting third-party merchants surged during the coronavirus pandemic. Alphabet reported $ 38.3 billion revenues, down 2% — a first — from $ 38.94 billion in Q2 of 2019, with operating income at $ 6.38 billion

Big-ticket direct tax reforms in the works… The government is working on big-ticket direct tax reforms and improve ease of compliance to complement the sharp reduction in the rates to make the regime more attractive for investors. Under the new regime that is in advance stage of preparation there will be zero physical interface between taxpayers and officials, cutting discretion of officers, government officials said

Guarantee-based loans to small biz soon… Amid complaints of exclusion, the government is looking to expand the coverage of the guarantee-based loans for small businesses. The sanctioned limit is proposed to be doubled to up to Rs 50 crore and annual turnover eligibility may be increased to Rs 200 crore. The finance and MSME ministries are working on the changes following discussions at the highest level, amid concerns that several businesses were not getting funds meant to help them navigate the coronavirus crisis.

Parekh bullish about economy rebound … HDFC chairman Deepak Parekh on Thursday said a host of economic indicators are showing improvement and growth would return to the economy if there are no more lengthy and complete lockdowns. “My view is that one should not be too perturbed with forecasts of negative GDP growth rates,” he told shareholders at the company’s AGM via videoconferencing. “Most believe India’s GDP growth will contract by about 5% this year. But recovery will happen assuming no further lengthy and complete lockdowns in future.”

RBI asks govt to cut PSU bank stake… The government should cut its stake in PSU banks to 26% and give their chiefs a long-enough tenure so that these can be run more professionally, RBI has said in a presentation to PM Narendra Modi, people with knowledge of the matter said. The government’s holding in state-run banks currently exceeds 50%. It was also suggested that the government should retain significant control over the banks. Lowering it to 26% might require a fresh legislation

Licence raj returns to colour TV import… India on Thursday imposed restrictions on the import of colour TV sets, bringing back curbs it had lifted almost two decades ago, in a measure to encourage domestic production. Imports of TVs in certain categories will now require a licence from the government. “Import policy of colour television sets… is amended from ‘free’ to ‘restricted’,” the DGFT said in a notification. The curbs are applicable to TV sets included in the ‘other colour’ category that covers LCD TVs among the goods.

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