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

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

A deal booster for the RIL stock, renewed vigour in banking stocks, continued surge in FPI flows and upbeat Asian markets should help lift Indian equity indices higher on Monday. Investors would be watching June quarter GDP print, due for release later in the day. Here’s breaking down the pre-market actions.

SGX Nifty signals solid start
Nifty futures on the Singapore Exchange traded 42 points, or 0.36 per cent higher at 11,732.50, in signs that Dalal Street was headed for a positive start on Monday.

Tech view: Nifty forms bullish candle
Nifty50 on Friday climbed for the sixth straight session and topped the 11,650 level. It formed a bullish candle on the daily chart and continued to form higher highs and lows, suggesting supports are gradually shifting higher. Analysts said the momentum remains strong, but the possibility of a profit booking move has risen, given that the market has entered the overbought territory, as suggested by the relative strength index or RSI.

Asian markets hit 29-month highs
Asian shares notched a 29-month high on Monday as investors wagered monetary and fiscal policies globally would stay super stimulatory, while an upbeat reading on China’s service sector augured well for continued recovery there. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5 per cent to reach its highest since March 2018. Japan’s Nikkei rallied 1.9 per cent aided by news that Warren Buffett’s Berkshire Hathaway had bought more than 5% stakes in each of the five leading Japanese trading companies.

Brent crude edges higher
Oil prices nudged up on Monday, with Brent futures set to post a fifth straight monthly gain, as global stimulus measures underpin prices even as demand struggles to return to pre-COVID levels in a well supplied market. Brent crude futures for November climbed 27 cents, or 0.6 per cent, to $ 46.08 a barrel.

US stocks closed higher on Friday
US stocks finished higher on Friday as investors pored through newly-released economic data. The Dow Jones Industrial Average rose 161.60 points, or 0.57 per cent, to 28,653.87. The S&P 500 increased 23.46 points, or 0.67 per cent, to 3,508.01. The Nasdaq Composite Index climbed 70.30 points, or 0.60 per cent, to 11,695.63.

Q1 earnings today
More than 100 companies are slated to report their June quarter results on Monday. Some of the companies in the list included Uniply Industries, Prozone Intu Properties, Shree Renuka Sugars, Prakash Industries and GNFC.

FIIs buy Rs 1,004 cr worth of stocks
Net-net, foreign portfolio investors (FPIs) were buyers of domestic stocks to the tune of Rs 1,004.11 crore, data available with NSE suggested. DIIs were net sellers to the tune of Rs 543.56 crore, data suggests.

Rupee: The rupee on Friday surged by 43 paise to close at 73.39 to the US dollar, its best closing level in nearly six months, buoyed by sustained foreign fund inflows and weaker greenback against key rivals.

10-year bonds: India 10-year bond yield fell 0.81 per cent to 6.09 after trading in 6.09-6.19 range.

Call rates: The overnight call money rate weighted average stood at 3.43 per cent, according to RBI data. It moved in a range of 1.80-4.10 per cent.

Q1 GDP data today… The National Statistical Office (NSO) will release the infrastructure output data for July and the GDP number for the April-June quarter on Monday. Various rating agencies and industry experts have been forecasting GDP contraction for the first quarter as the economy came under a severe pressure in the wake of the coronavirus outbreak and ensuing lockdowns during this period.

Unlock 4 guidelines issued… In a significant directive, the Home Ministry said that state governments shall not impose any local lockdown outside the containment zones without prior consultation with the central government. Metro rail will be allowed to operate with effect from September 7 in a graded manner, by the Ministry of Housing and Urban Affairs (MOHUA), the Ministry of Railways (MOR), in consultation with the MHA.

China factory activity slows…. China’s factory activity grew at a slower pace in August as floods across southwestern China disrupts production. The official manufacturing Purchasing Manager’s Index (PMI) fell slightly to 51 in August from 51.1 in July. The official non-manufacturing Purchasing Managers’ Index (PMI) rose to 55.2 from 54.2 in July, data from the National Bureau of Statistics (NBS) showed. The 50-point mark separates growth from contraction on a monthly basis. The official August composite PMI, which includes both manufacturing and services activity, rose to 54.5 from July’s 54.1.

What’s behind rupee rally?…
The rupee stood out among its Asian peers last week, and it owes its sterling rise in part to the $ 2 billion L&T-Schneider deal. The central bank, too, didn’t surprisingly intervene, underscoring its intent to allow the local unit to find its value in the face of recent inflows of dollars. The rupee gained about 2% in the past five trading sessions, and that has definitely lessened the damage previously done. In the calendar year to date, the rupee ranks third from the bottom in the continent, having lost 2.76%.

Asean agrees to rejig India CECA… After months of inaction and the government’s threat to pull out of the Comprehensive Economic Cooperation Agreement with Asean, members of the trading block have agreed to review the trade pact amid concerns that China is using the treaty to ship goods to India, which is unable to take full advantage of the 10-year-old arrangement. While the scope of the review will be finalised at the official level, New Delhi is keen that some of the anomalies be removed at the earliest. Chief among them is the inability of Indian exporters to get a level-playing field.

States may oppose borrowing plan… A number of states, particularly Opposition-ruled ones, are set to reject the two borrowing options proposed by the Centre to meet the deficit in the GST compensation fund. State finance ministers will meet on Monday to finalise their joint strategy to approach the Centre again. But government officials sais the Centre is unlikely to give in to demands for changing the compensation formula for GST despite opposition-ruled states demanding that it borrow from the market and transfer funds to meet the shortfall between actual collections and the promised growth of 14%.

Future lenders keep fingers crossed… Lenders to the Future Group are keeping their fingers crossed on what is in store for them in the Reliance-Future Group deal and are hoping that their debts would be paid in full. Bankers said the details given so far in regulatory disclosures and public statements do not detail how the debt would be split. ET reported that Reliance Retail Ventures will take over more than Rs 19,000 crore debt and liabilities owed by Future Group’s retail, wholesale, logistics and warehousing units until March 31, 2020, while Future Group founder and chief executive Kishore Biyani will have to pay the remaining dues from April 1 until the assets are transferred following regulatory approvals.

Yes Bank goes after Goyal, wife… Yes Bank, under a new management, has turned up the heat on Jet Airways founder Naresh Goyal. The private lender has initiated the process to categorise Goyal and his wife Anita as ‘wilful defaulters’, which may stain the reputation of persons and restrict their ability to borrow and hold board positions in companies. Yes Bank recently communicated this to the members of the promoter family of Jet Airways. The Goyals, it’s believed, have responded, indicating they were not involved in the borrowings by the airline.

No fee on UPI payment… CBDT has asked banks to return to customers and merchants any fees levied for making Unified Payment Interface (UPI) transactions in 2020, adding that such charges violate the law. The lenders were asked to stop all such impositions or face “penal actions” in a circular issued on Sunday.

It’s pouring FII money on D-Street… Foreign investors are pumping money into Indian equities with renewed vigour, as the weakening dollar — weighed down by near-zero interest rates in developed economies — has led to a wall of liquidity chasing risky emerging market (EM) assets. Since July 1, overseas investors have net bought Indian shares worth $ 7.5 billion — among the highest across EMs in this period. In August alone so far, these investors have purchased $ 6.35 billion — driving the Nifty and Sensex to sixmonth highs on Friday.

Bank Nifty on a high… Bank Nifty, which has risen 9.5% in four sessions through 24,524 on Friday, could next test the 26,311.30 level, the 61.8% retracement of the correction from the record high of 32,613 in December through the low of 16,116 in March. Any dips will be a buying opportunity, said analysts. Consistently lagging the Nifty, which has bounced back over 50% from its March low of 7,511, the banking index is now trying to “catch up”, the say.

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