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Market Movers: What changed for D-Street while you were sleeping

Here’s breaking down the pre-market actions.

ETMarkets.com|
Dec 13, 2019, 08.22 AM IST
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NEW DELHI: Indian equity indices are poised to start Friday's session on a positive note amid reports that US President Donald Trump has okayed the Phase One of its trade deal with China. White House is said to have agreed to suspend some tariffs on Chinese goods and reduce others in return for Beijing's pledge to hike purchases of US farm products in 2020, Bloomberg reported.

Here’s breaking down the pre-market actions.


TRADE SETUP

Singapore trading sets stage for positive start
Nifty futures on the Singapore Exchange traded 32 points, or 0.27 per cent, up at 12,056.50, indicating a positive start for Dalal Street.

Tech view: Nifty forms bullish candle
Nifty before closing nearly 62 points higher at 11,972, the index hit an intraday high and low of 12,005 and 11,934, respectively. Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia, said albeit intraday profit booking from the intraday high resulted in a slightly longer shadow, which is dominating the candle body, that itself can’t be construed as a weak sign.

Asian shares gain
Asian share markets jumped on Friday as a last-gasp Sino-US trade deal and a likely major election win by Britain's Conservative Party looked to have cleared a couple of dark clouds from the global horizon. In Asia, Japan's Nikkei climbed 2.1 per cent to a 14-month high, while South Korean stocks firmed 1.2 per cent. E-Mini futures for the S&P 500 rose 0.4% to another peak. MSCI's broadest index of Asia-Pacific shares outside Japan put on 0.5 per cent.

US stocks close higher
Wall Street's main indexes hit record highs following news that the United States had reached a "deal in principle" with China to resolve a trade war that has rattled markets for nearly two years. The Dow Jones Industrial Average rose 220.75 points, or 0.79 per cent, to 28,132.05, the S&P 500 gained 26.94 points, or 0.86 per cent, to 3,168.57, and the Nasdaq Composite added 63.27 points, or 0.73 per cent, to 8,717.32.

FIIs sell Rs 683 crore worth stocks
Net-net, foreign portfolio investors (FPIs) were sellers of domestic stocks to the tune of Rs 683.83 crore on Thursday, data available with NSE suggested. DIIs were net buyers to the tune of Rs 810.23 crore, data suggests.

Oil prices hit three-month high
Crude oil prices rose to the highest level in almost three months after President Trump signed off on a limited trade deal with China, improving the global demand outlook. Futures in New York added as much as 0.7% Friday after climbing by that amount Thursday. Crude is poised to eke out a small gain this week due to the positive sentiment around the trade deal after surging by more than 7% the week before.


DAY PLANNER

  • India Nov WPI inflation
  • Dec forex reserve at RBI
  • India Nov balance of trade
  • US Baker Hughes oil rig count
  • European Council Meeting

MONEY MARKETS

Rupee: The rupee pared most of its early gains and settled marginally up at 70.83 against the US currency on Thursday due to forex outflows amid growth concerns and uncertainty over the imposition of higher US tariffs on Chinese goods.

10-year bonds: India 10-year bond yields rose 0.01% to 6.77% on Thurssday, against 6.76% in the previous session, according to Bloomberg.

Call Rate: The overnight call money rate weighted average was 5.00% on Thursday, according to RBI data. It moved in a range of 3.70-5.25%.

MACROS

Trump signs off trade deal Phase One
President Donald Trump has signed off on a phase-one trade deal with China, averting the Dec. 15 introduction of a new wave of US tariffs on about $160 billion of consumer goods from the Asian nation, according to people familiar with the matter. The deal presented to Trump by trade advisers on Thursday included a promise by the Chinese to buy more US agricultural goods. Officials also discussed possible reductions of existing duties on Chinese products. The terms have been agreed, but the legal text has not yet been finalised. A White House spokesperson declined to comment. A Reuters report said the US negotiators offered to reduce tariffs on about $375 billion in Chinese goods by 50% across the board, and suspend fresh tariffs to secure the deal

NSE back in IPO queue
NSE has revived its listing plans which were stalled due to litigation against the exchange in the colocation matter. The bourse has reached out to the Finance Ministry and Sebi, seeking their opinion about its plan to restart the IPO process and complete it sometime next year. The IPO plan of country’s largest exchange has been on the backburner for almost three years following Sebi investigations against it and some top officials.

Sebi alert over FII shortselling
Some of the foreign portfolio investors are believed to have indulged in shortselling stocks — selling shares which they don’t have. Capital market regulator Sebi recently alerted custodians that it has come across instances where such trades have taken place. In an email to foreign and local custodians, which function as a vital link between offshore funds and the Indian stock market, Sebi has told them to adhere to the regulatory guidelines which bar FPIs from such shortselling in the Indian market.

India factory output shrinks, inflation jumps
Industrial production contracted for the third month running in October with the festival season failing to provide any boost while retail inflation quickened to a 40-month high in November — a double whammy for the struggling economy. Comig at a time when growth in Asia's third largest economy has slowed to a six-year low, some economists are warning that the country could be entering into a stagflationary phase. The index of industrial production (IIP) shrank 3.8% in October. This is better than the 4.3% drop in September. IIP expanded 8.4% in the year-ago month. The simultaneously released consumer price index (CPI) showed retail inflation at 5.54% in November, up from 4.62% in the month before, as food inflation climbed into double digits.

Telecom tariff floor coming
Telecom tariff floor may be coming soon. Regulator Trai says it may reconsider its decision not to regulate tariffs, following requests from all operators, although it would ideally prefer to keep away from intervening in price plans. “It is only recently that the telecom companies have together written to us that regulate us, so it’s for the first time,” Chairman RS Sharma said. The three private telcos have urged Trai to set a floor price for data to improve the health of the sector

India to grow at 4.3% in Q4 2019: Nomura
India's economy is expected to grow at 4.3% in the fourth quarter of this fiscal amid concerns over crisis in the NBFC sector, according to Nomura. The Japanese financial services major also believes that the first quarter of 2020 will see a "weak" uptick in GDP growth at 4.7%. Contrary to the market's current optimism that growth has likely bottomed, Nomura believes it will slide further. It expects 4.9% GDP growth in 2019, down from an earlier estimate of 5.3% and 5.5% in 2020 against an earlier projection of 6.3%. In 2021, it sees India's economic growth at 6.5%.

Farmers may get heavy insurance payout
Insurance companies are likely to pay farmers heavy compensation as dry weather in June and floods in September damaged crops particularly in Maharashtra, where the outgo may be more than Rs 10,000 crore, agriculture ministry officials said. Total claims for this year’s summer-sown, or kharif, season are estimated to be about Rs 18,000 crore, which is close to the previous fiscals’ approved claims of a little over Rs 19,000 crore. Payment for damaged rice, cotton, oilseeds, pulses, sugarcane and horticulture crops will be paid under the Pradhan Mantri Fasal Bima Yoja (PMFBY) launched in 2016.

Rich Indians place trust in new tax haven
Increasingly, rich Indians have started creating and registering family trusts in tax-friendly locations such as Malta, Dubai and Singapore to insulate themselves from taxmen, or other government agencies. Assets, including shares held in India and money repatriated from India, are now being transferred and held in these family trusts. This follows an earlier trend where most business families had made sure that one of their family members become resident of another country due to fear of taxmen and prosecution under insolvency proceedings. The newly created trusts would mean that Indian authorities may have limited access to the assets held outside the country.
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