US President Donald Trump’s move to sign an executive order on economic relief failed to lift Asian markets early Monday. Domestic equities may take the cue and see a muted start.Here’s breaking down the pre-market actions.
STATE OF THE MARKETS
SGX Nifty signals muted start
Nifty futures on the Singapore Exchange traded 17 points, or 0.15 per cent lower at 11,209.50, in signs that Dalal Street was headed for a muted start on Monday.
Tech view: Nifty forms bullish candle
The NSE barometer on Friday formed a small bullish candle on the daily chart and a pattern resembling a Hanging Man candle on the weekly scale. A breach of the 11,240-250 range may help the index rally towards the 11,340 level, said analysts, who see support for Nifty at 11,100 level.
Buffett indicator signals pricey markets
The global market cap-to-GDP ratio has crossed 100% for the first time since January this year, indicating investors’ bullishness and overvaluation due to fiscal spending and central bank money printing. The ratio, which is a favourite of billionaire investor Warren Buffet, is about 64% higher than the historical average. In the past, global markets have corrected sharply in three such instances of the ratio crossing 100%; in 2000, 2008 and 2018. Countries like China, India, France and Germany have seen a decline in the ratio in last one year.
Asian markets edge lower
Financial markets in Japan and Singapore are closed on Monday for public holidays. Hong Kong’s Hang Seng index eased 0.63 per cent, or 154.80 points, to 24,376.82. China’s Shanghai Composite Index slipped 0.37 per cent, or 12.51 points, to 3,341.53. MSCI’s broadest index of Asia-Pacific shares outside Japan stayed below a 6-1/2 month peak touched last week to be last at 560.17.
Oil prices rise in early trade
Oil prices climbed in early trade on Monday, clawing back over half of Friday’s losses, on a pledge from Iraq to deepen its crude oil supply cuts. US WTI crude futures rose 49 cents, or 1.2 per cent, to $41.71 a barrel, while Brent crude futures were up 40 cents, or 0.9 per cent, at $44.80 a barrel.
Defence stocks in focus
Defence stocks such as Bharat Forge, BEL and L&T may gain after the Ministry of Defence announced over the weekend that it has prepared a list of 101 items for which there would be an embargo on the import beyond the timeline indicated against them.
Q1 earnings today
Titan Company, Power Grid, IPCA Labs, Bank of Baroda, AstraZeneca Pharma, TTK Prestige, Akzo Nobel, KEC International, HEG, Cochin Shipyard, Ujjivan Financial Services and Caplin Point Labs, among others, will announce their quarterly results today.
US stocks closed mixed on Friday
US stocks ended mixed as investors pored through the newly-released July jobs report. The Dow Jones Industrial Average index rose 46.50 points, or 0.17 per cent, to 27,433.48. The S&P500 index was up 2.12 points, or 0.06 per cent, to 3,351.28. The Nasdaq Composite Index slid 97.09 points, or 0.87 per cent, to 11,010.98.
FIIs buy Rs 397 cr worth of stocks
Net-net, foreign portfolio investors (FPIs) were buyers of domestic stocks to the tune of Rs 397.32 crore, data available with NSE suggested. DIIs were net sellers to the tune of Rs 438.62 crore, data suggests.
Rupee: The rupee ended almost flat at 74.93 against the US dollar on Friday due to a caution prevailing in the forex market in view of mounting coronavirus cases and US-China trade tensions.
10-year bonds: India 10-year bond yield rose 0.41 per cent to 5.88 after trading in 5.86-5.89 range.
Call rates: The overnight call money rate weighted average stood at 3.41 per cent, according to RBI data. It moved in a range of 1.80-4.10 per cent.
DATA/EVENTS TO WATCH
- Earnings: BoB I PowerGrid I Titan I VMart I Coffee Day I Equitas I KEC
- China July Inflation Rate (07.00 am)
- China July PPI (07.00 am)
- US July Consumer Inflation Expectations (08.30 pm)
Trump signs orders extending eco relief… US President Donald Trump signed executive actions extending financial relief to Americans hit by the coronavirus pandemic. The $400 assistance, however, is below the $600 offered in the expired stimulus package. It may also end up amounting only to $300 extra a week, as $100 would be provided from states, if they were willing or able to do so.
India’s Motown on a hiring spree… The Indian auto industry’s recent fillip to sales propelled by the pent-up demand released after the lockdown was eased has seen a number of fresh job positions opening up in the segment. Hiring activity recovered in terms of demand for white collar and blue collar workers in July from the slump hit in March and April, data from job sites and staffing consultants showed. Month-on-month hiring growth trend that hit a trough of – 72% in April, rose to 28% in May and peaked at 71% in June before stabilising at 8% in July, shows an analysis by Naukri.com
FDI mandate to RBI to aid foreign investors… Foreign investors could experience an improved ease of doing business environment in the coming days and weeks after the government’s rule change gave the RBI greater say in administering all issues relating to FDI, which would include allowing the central bank to interpret various rules and grant exemptions pertaining to FDI. The rule change applies only to foreign direct investment and not to foreign portfolio investment which is purchase of shares in the secondary market.
PM unveils agri infra fund… Prime Minister Narendra Modi on Sunday launched a Rs 1 lakh crore Agriculture Infrastructure Fund to support community farming assets across the country and said this would enhance India’s ability to compete globally in the agriculture sector. The farm infrastructure will enable farmers get higher value for their produce as they will be able to store and sell at better prices as per market conditions, reduce wastage and increase processing and value addition. Modi also released Rs 17,000 crore to nearly 8.5 crore farmers under the sixth instalment of the PM-Kisan scheme
State-level indicators signal slowing revival… State-level economic indicators such as GST collections and electricity demand show key industrial states such as Gujarat, Maharashtra, Karnataka and Tamil Nadu have seen a slowing of business activity in July from the month before. Only a few states — Rajasthan, Madhya Pradesh, Uttar Pradesh and Uttarakhand — have shown steady recovery from April, when the nationwide lockdown had the biggest economic impact. Google mobility indicators are, however, up for most of these states in July over June.
Govt majorly trims defence imports list… The government on Sunday announced a negative arms imports list, under which acquisition of 101 weapon systems and platforms from abroad will be progressively banned from December 2020 to December 2025, in a bid to bolster the fledgling domestic defence production sector. The 101 items, with different embargo timelines, range from some types of ammunition, sonars, radars, artillery guns and assault rifles to missile destroyers, transport aircraft, light combat helicopters, wheeled armoured fighting vehicles, conventional diesel-electric submarines and communication satellites.
Tech biggies set to oppose India data regulation… India’s plan to regulate “non-personal” data has jolted US tech giants Amazon, Facebook and Google, and a group representing them is preparing to push back against the proposals, according to sources and a letter seen by Reuters. A government-appointed panel in July recommended setting up a regulator for information that is anonymised or devoid of personal details but critical for companies to build their businesses.
Source: ET Markets