In line with the bloodbath seen in global peers, Indian equity markets are set to kick off the new week on a gap-down note. US stocks settled sharply lower on Friday after Powell’s speech, whereas Asian stocks felt the aftershocks on Monday as they traded with big cuts too. The US Fed has signalled more rate hikes in the near term. Back home, all eyes are set on ‘ 45th annual general meeting. Here’s breaking down the pre-market actions:
STATE OF THE MARKETS
SGX Nifty signals a negative start
Nifty futures on the Singapore Exchange traded 380.5 points, or 2.15 per cent, lower at 17,278.5, signalling that Dalal Street was headed for a negative start on Monday.
- Tech View: Nifty50 on Friday settled higher but formed a small bearish candle on the daily chart. On the weekly chart, the index formed a bearish candle with a long lower wick. Analysts said that the index may face resistance near 17,720-725 level while they saw 17,400 to act as a strong support going ahead.
- India VIX: The fear gauge plunged as much as 7 per cent to 18.22 level on Friday over its close at 19.57 on Thursday.
Asian stocks tumble at open
Major Asian stocks opened lower Monday after US Federal Reserve Chair Jerome Powell declared his commitment to rate hikes to fight inflation. MSCI’s index of Asia-Pacific shares outside Japan was trading 1.81 per cent lower.
- Japan’s Nikkei plunged 2.80%
- Australia’s ASX 200 tanked 2.78%
- New Zealand’s DJ dropped 1.16%
- South Korea’s Kospi shed 2.22%
- China’s Shanghai retreated 0.47%
- Hong Kong’s Hang Seng fell 0.92%
US stocks settle in deep red
Wall Street ended Friday with all three benchmarks more than 3% lower, as Federal Reserve Chief Jerome Powell’s signal that the central bank would keep hiking rates to tame inflation nixed nascent hopes for a more modest path among some investors.
- Dow Jones plunged 3.03% to 32,283.40
- S&P 500 tumbled 3.37% to 4,057.66
- Nasdaq nose-dived 3.94% at 12,141.71
Dollar held stronger
The US dollar extended its rally on Monday, hitting a five-week high on the yen after US Federal Reserve Chair Jerome Powell signalled interest rates would be kept higher for longer to bring down soaring inflation.
- Dollar index pinned at 109.24
- Euro was dropped to $0.9932
- Pound fell lower to $1.1680
- Yen was struggling at 138.34 per dollar
- Yuan exchanged hands at 6.9048 against the greenback
Oil prices trade mixed
Oil prices were mixed on Monday as investors balanced expectations the OPEC will cut output to support prices against concerns sparked by Federal Reserve Chairman Jerome Powell saying the United States will face slow growth “for some time”.
US West Texas Intermediate (WTI) crude futures rose 2 cents to $93.08 a barrel at 0003 GMT, adding to Friday’s gain. Brent crude futures were down 27 cents, or 0.3 per cent, at $100.72 a barrel, trimming gains from the previous session.
FIIs buy shares worth Rs 49,254 cr in Aug
Net-net, foreign portfolio investors (FPIs) turned sellers of domestic stocks to the tune of Rs 51.12 crore on Friday, data available with NSE suggested. However, DIIs turned net buyers to the tune of Rs 453.59 crore, data suggests. FPIs pumped a net amount of Rs 49,254 crore in Indian equities during August 1-26.
Powell sees pain ahead, puts inflation above growth
The US Federal Reserve Chair Jerome Powell’s message to the investors Jackson Hole, Wyoming was loud, clear and blunt that the central bank is most likely to keep the interest rate lofted to battle the rising prices.
In his speech, little more than 9 minutes, Powell used the phrase ‘price stability’ nine times, which means once every minute on average, signalling that curbing inflation is the prime objective of the Fed over growth.
Stocks in F&O ban today
Since it is the beginning of the new series, no stock is under the F&O ban for Monday, August 29. Securities in the ban period under the F&O segment include companies in which the security has crossed 95 per cent of the market-wide position limit.
Forex reserve dropped to $564.05 bn
The country’s foreign exchange reserves fell $6.687 billion to $564.053 billion in the week ended August 19, according to the Reserve Bank of India (RBI) data. In the previous week ended August 12, the reserves declined $2.238 billion to $570.74 billion.
The drop in the reserves during the week ended August 19 was due to a fall in the Foreign Currency Assets (FCA) and the gold reserves, as per the Weekly Statistical Supplement released by RBI on Friday.
Sebi’s new guideline for portfolio managers
Markets regulator Sebi on Friday said portfolio managers can invest a maximum of 30 per cent of clients’ assets in the securities of their “associates” or related parties.
This came after Sebi amended portfolio managers’ rules on Monday that mandated prudential limits on investments in associates and related parties of portfolio managers, the requirement of taking prior consent of clients for such investments and restrictions based on the credit rating of securities.
MONEY MARKETS
Rupee: The rupee appreciated by 8 paise to close at 79.84 against the US dollar on Friday, supported by a weak dollar in the overseas markets and a positive trend in domestic equities.
10-year bonds: India 10-year bond dropped sharply by 1.03 per cent to 7.22 after trading in 7.20 – 7.29 range on Friday.
Call rates: The overnight call money rate weighted average stood at 5.13 per cent on Friday, according to RBI data. It moved in a range of 3.80-5.40 per cent.
