STATE OF THE MARKETS
SGX Nifty signals a positive start
Nifty futures on Singapore Exchange traded 46 points, or 0.28 per cent, higher at 16,649, signaling that Dalal Street was headed for a positive start on Wednesday.
- Tech View: Nifty50 is trading in the overbought territory but as long as the index trades above the 16,500 level, momentum will stay positive, analysts said.
- India VIX: The fear gauge eased marginally to 13.41 level on Tuesday over its close at 13.46 on Monday.
Asian stocks rise in early trade
Asian markets recouped from the early trade losses on Wednesday, trading mostly higher after Wall Street shares slipped and with Japan struggling to control a surge in virus cases. MSCI’s broadest index of Asia-Pacific shares outside Japan was down by 0.24 per cent.
- Japan’s Nikkei gained 0.33%
- Korea’s Kospi jumped 0.29%
- Australia’s ASX 200 added 0.06%
- China’s Shanghai declined 0.16%
- Hong Kong’s Hang Seng edged up 0.02%
Wall Street slumps after weak retail sales
Wall Street’s main indices slid on Tuesday, with the S&P500 index logging its biggest one-day percentage fall in about a month, weighed down by a drop in US retail sales that raised concerns about the economic recovery, as well as by disappointing results from Home Depot.
- Dow Jones shed 0.79% to 35,343.28
- S&P 500 tanked 0.71% to 4,448.08
- Nasdaq declined 0.93% to 14,656.18
Dollar stands tall amid Covid concerns
The dollar hit a nine-month high against the euro on Wednesday and held near recent peaks on other majors as investors cut exposure to riskier currencies, mostly on Covid-19 concerns.
- Dollar index held at 93.115
- Euro declined to $1.1702
- Pound slipped to $1.3740
- Yen fell to 109.60 per dollar
- Yuan flat at 6.4853 against the greenback
Oil prices fall for 5th day
Oil prices dipped on Wednesday, the fifth day of declines with investors wary about prospects for stronger fuel demand as the use of rail, air, and other forms of transport remained constrained amid surging COVID-19 cases worldwide. Brent crude was down 5 cents or 0.1 per cent at $68.98 a barrel. US oil lost 6 cents or 0.1% to $66.53 a barrel.
FPIs sell shares worth Rs 344 crore
Net-net, foreign portfolio investors (FPIs) turned sellers of domestic stocks to the tune of Rs 343.73 crore, data available with NSE suggested. DIIs were buyers of equities to the tune of Rs 266.43 crore, data suggests.
MONEY MARKETS
Rupee: The rupee on Tuesday declined by 11 paise to close at 74.35 against the US currency due to a stronger dollar in the overseas markets.
10-year bond: India 10-year bond yield eased 0.11 per cent to 6.23 after trading in 6.22-6.25 range.
DATA/EVENTS TO WATCH
- US FOMC Minutes (11:30 pm)
- US Housing Starts MoM JUL (6 pm)
- US Building Permits JUL (6 pm)
- US Housing Starts JUL (6 pm)
- GB Inflation Rate JUL (11:30 pm)
- GB Retail Price Index JUL (11:30 am)
- EA Construction Output YoY JUN (2:30 pm)
- EA Core Inflation Rate YoY Final JUL (2:30 pm)
- EA Inflation Rate Final JUL (2:30 pm)
MACROS
Inflation not a huge concern, says FM
The government and the Reserve Bank of India (RBI) were keeping a close watch on the consequence of an increase in interest rates by the US Federal Reserve while domestic inflation was not a huge concern at the moment as supply-side issues were being addressed, finance minister Nirmala Sitharaman said. India was ideally suited for investors and companies who might be seeking alternatives to China in the wake of the ongoing regulatory actions in the country against local technology giants such as Alibaba, the finance minister said.
Rise in claims for non-Covid procedures may hit insurers
India’s health insurance industry, recovering from the devastating second wave of coronavirus infections in the June quarter, is now preparing for a new challenge — a surge in claims from planned hospitalisations deferred since early 2020. Insurers say optional procedures such as cataract surgeries, kneecap replacements, cardiovascular treatments among others are already showing a gradual pick up in August even as the industry is reeling from one of its worst quarters — financially — in recent history.
Demand to take a while to hit pre-Covid level
Aggregate demand in the economy is ‘limping back’ but a catchup with the pre-pandemic level will take some more time, the Reserve Bank of India (RBI) said in its latest assessment of the economy. The Monetary Policy Committee (MPC) decided to stick to the objective of reviving growth over that of reacting to inflation as its approach is to gradually tackle the prospects of impacting output rather than use a sledgehammer, deploying which could reverse the nascent recovery underway.
Automakers find a way around the global chip crisis
A global shortage of semiconductors which is hurting production of passenger vehicles isn’t going to improve anytime soon, even as the market is witnessing a surge in demand for cars and SUVs with the festive season also around the corner. Automakers have found a way around to keep their production lines running — cut down on the usage of microchips in their vehicles.
Ecommerce sales for FMCG cos to hit double-digits
Ecommerce contribution at FMCG companies will hit the double-digit mark within a year in the fastest adoption of online sales across categories despite the easing of curbs, pointing to altered purchase patterns for daily-use items hitherto sold largely by either large-format supermarkets or tiny mom-and-pop neighbourhood stores.
