A steep late fall in US stocks overnight on uncertainty over stimulus may not bode well for domestic stocks, which looked set for a gap-down start on Wednesday.
Here’s breaking down the pre-market actions.
STATE OF THE MARKETS
SGX Nifty hints at gap-down start
Nifty futures on the Singapore Exchange traded 113.50 points, or 1 per cent lower at 11,227, in signs that Dalal Street was headed for a gap-down start on Wednesday.
Tech view: Nifty50 forms Doji candles
The index formed a ‘Doji’ candle on the daily chart as uncertainty continued. Analysts said the formation of indecisive candles over the past couple of days suggests the bulls are tired and profit booking may be around the corner. They said the index faces resistance in the 11,340-380 range and has support in the 11,240-250 zone.
Asian shares mixed in early trade
Hong Kong’s Hang Seng dipped 0.09 per cent, or 22.05 points, to 24,868.63. China’s benchmark Shanghai Composite index dropped 0.38 per cent, or 12.80 points to 3,327.49. Japan’s Nikkei 225 index was up 0.16 per cent or 37.32 points at 22,787.56 in early trade.
US stocks snap 7-day winning streak
US stocks snapped a seven-day streak of gains on growing uncertainty about breaking a stalemate in Washington over a fiscal stimulus deal. The Dow Jones Industrial Average index fell 104.53 points, or 0.38 per cent, to 27,686.91, the S&P500 index lost 26.78 points, or 0.80 per cent, to 3,333.69 and the Nasdaq Composite index dropped 185.53 points, or 1.69 per cent, to 10,782.82.
Q1 earnings today
Aurobindo Pharma, Bharat Forge, Aarti Industries, Natco Pharma, Ashok Leyland, Tata Power, Cummins India, Aavas Financiers, Sundaram Fasteners, Thermax, Aster DM Healthcare, Graphite India, Kalpataru Power and NCC are among companies which will disclose their June quarter results on Wednesday.
DIIs sell Rs 1,416 cr worth of stocks
Net-net, foreign portfolio investors (FPIs) were buyers of domestic stocks to the tune of Rs 1,013.66 crore, data available with NSE suggested. DIIs were net sellers to the tune of Rs 1,415.54 crore, data suggests.
MONEY MARKETS
Rupee: The rupee appreciated by 12 paise to close at 74.78 against the US dollar on Tuesday tracking weakness in the greenback and gains in the domestic equity market.
10-year bonds: India 10-year bond yield rose 0.17 per cent to 5.90 after trading in 5.88-5.91 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.
DATA/EVENTS TO WATCH
- Earnings: Ashok Leyland I Auro Pharma I Bharat Forge I Cummins I Natco I Tata Power
- India July CPI Inflation Rate (05.30 pm)
- UK June Balance of Trade (11.30 am)
- UK Q2 GDP Growth Preliminary Estimate (11.30 am)
- UK June Industrial Production (11.30 am)
- Euro Area June Industrial Output (02.30 pm)
- US July Inflation Rate (06.00 pm)
MACROS
SC declares daughters equal inheritors… Putting the last nail on male primacy in division of Hindu ancestral property, the Supreme Court, in a landmark judgment on Tuesday, cleared the legal cobwebs to declare daughters will have inheritance rights equal to those of sons from properties of fathers, grandfathers and great-grandfathers right from the codification of the law in 1956. The bench said irrespective of whether the father was alive or not, daughters born before September 9, 2005, too could claim equal right in inheritance. A bench of Justices Arun Mishra, S Abdul Nazeer and M R Shah ironed out the confusion arising from the apex court’s conflicting interpretations of the amended Section 6 of Hindu Succession Act, which came into force on September 9, 2005.
US stimulus may get delayed… With no talks scheduled on a virus-relief package seen as vital by Federal Reserve officials and market participants alike, the stalemate between Republicans and Democrats risks dragging on for weeks. The four main principals — Treasury Secretary Steven Mnuchin, White House Chief of Staff Mark Meadows, Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer — haven’t talked since Friday. And Senate Majority Leader Mitch McConnell and Schumer continued to exchange rhetorical broadsides on the Senate floor Tuesday, without new ideas for a compromise.
Industrial output contracts in June… India’s industrial output contracted for the fourth successive month in June, led by a decline in manufacturing, mining, electricity and capital goods segments as the coronavirus-induced lockdown continued to take a heavy toll on the crucial sector. Data released by the National Statistical Office (NSO) on Tuesday showed the index of industrial production (IIP) contracted 16.6% in June, compared with a fall of 33.9% in the previous month and 1.3% expansion in the same month last year. For the April-June period, industrial output contracted 35.9% compared with an expansion of 3% in the year-ago period
New govt stimulus in the works…. The government is likely to soon announce fresh measures, including big-ticket infrastructure projects and policy changes, to make local industry more competitive, as part of efforts to rebuild the economy in the wake of the Covid-19 pandemic, said people with knowledge of the matter. Prime Minister Narendra Modi may himself unveil some of these steps, which could also include an initiative to reorient the tax administration, said government sources.
SUVs spring hope for Motown…. When the going gets tough, off-roaders get going. SUVs are steering a comeback for the Indian car industry, providing some much-needed cheer to the coronavirus-battered companies. According to numbers released by industry body Siam, SUVs clocked 14% growth in volumes in July over the year-ago period. Models such as Hyundai’s Creta and Venue, Kia’s Seltos, Maruti’s Brezza and Ertiga, Mahindra’s Bolero, and even the Rs 1 crore-plus Mercedes-Benz GLS have been among those powering the SUV surge.
I-T raids on Chinese entities…. The income-tax department on Tuesday launched a massive search operation on a few Chinese individuals, their Indian associates and some bank employees in Delhi, Gurgaon and Ghaziabad for suspected links to money laundering and hawala deals running into several thousand crores of rupees. Premises of the suspects were searched “based on credible information,” an I-T department statement said.
Govt identifies 10 sectors for disinvestment… The government has identified 18 strategic sectors for disinvestment, including coal, crude oil, power, steel, telecom, atomic energy and defence, allowing presence of 3-4 PSUs in each space. The 18 sectors have been divided into three categories — mining and exploration, manufacturing and services..
