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SGX Nifty up 45 points; here’s what changed for market while you were sleeping

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Domestic stocks may see a positive start to Tuesday’s session, in line with other Asian markets and tracking Monday’s rally in European shares. Here’s breaking down the pre-market actions.

STATE OF THE MARKETS

SGX Nifty signals positive start

Nifty futures on the Singapore Exchange traded 47.50 points, or 0.42 per cent higher at 11,428.50, in signs that Dalal Street was headed for a positive start on Tuesday

Nifty forms Dragonfly Doji candle

Nifty50 on Monday closed almost where it opened, forming a Dragonfly Doji candle on the daily chart. The day saw weakness on the index being bought into on several occasions. Analysts said the index may stay range bound with a positive bias in the coming sessions. A rise above the 11,407 level, which is the index’s 20-day moving average, could show an initial sign of strength, they said. Support for the index is seen in the 11,200-250 range, they added.

Asian shares gain in early trade

Japan’s Nikkei 225 index rose 0.33 per cent or 75.62 points to 23,165.57 in early trade. Hong Kong’s Hang Seng Index rose 0.80 percent, or 195.61 points, to 24,785.26. China’s Shanghai Composite index added 0.26 per cent, or 8.63 points, to 3,301.22, while the Shenzhen Composite index on China’s second exchange added 0.13 per cent, or 2.82 points, to 2,242.50.

US stocks to resume trade after public holiday

US stocks, which were closed on Monday on account of Labor Day, will resume trade on Tuesday. On Friday, the Dow Jones Industrial Average fell 159.42 points, or 0.56 per cent, to end at 28,133.31, after trading more than 600 points lower earlier in the session. The S&P 500 decreased 28.10 points, or 0.81 per cent, to 3,426.96. The Nasdaq Composite Index slid 144.97 points, or 1.27 per cent, to 11,313.13.

Q1 results today

Future Consumer, CESC, Dishman Carbogen Amcis, Mafatlal Industries, Spencers Retail: These companies are scheduled to announce their June quarter earnings on Tuesday.

Happiest Minds IPO fully subscribed

Riding on huge retail demand, the Rs 702 crore initial public offer (IPO) by Happiest Minds sailed through in just over two hours into the bidding process on Monday. The issue received bids for 6,67,09,800 shares, which was 2.87 times the issue size of 2,32,59,550 shares on Day 1, data compiled from NSE and BSE showed.

Quality largecaps poised for rebound?

Are some of the quality large-cap stocks that have underperformed in recent months poised for a rebound? Technical indicators show after drifting lower, stocks such as Infosys, TCS, HUL, Nestle, Dabur, HDFC, Bharti Airtel and HDFC Life, among others, could have reached their lows as some investors are looking to return to these blue chips with the rally in the broader market losing steam.

IPO frenzy lifts grey market premium

The retail stock market frenzy is now sweeping the shores of the IPO market. The public issue of Bengaluru-based digital IT services provider Happiest Minds Technologies was fully subscribed in two hours on the first day itself and the grey market premium of its shares jumped from Rs 110 apiece on Friday to Rs 120 on Monday over the IPO price band of Rs 165-166 per share. Route Mobile, the cloud communication service provider, which is also launching its IPO on Wednesday, commands a grey market premium of 63%, or Rs 220 apiece, over the proposed issue price of Rs 345-350 per share.


DIIs sell Rs 816 cr worth of stocks


Net-net, foreign portfolio investors (FPIs) were sellers of domestic stocks to the tune of Rs 6.93 crore, data available with NSE suggested. DIIs were net sellers to the tune of Rs 815.82 crore, data suggests.

MONEY MARKETS

Rupee: The rupee slid 21 paise to settle at 73.35 against the US dollar on Monday, tracking subdued equities and stronger greenback against its key rival currencies.

10-year bonds: India 10-year bond yield rose 1.06 per cent to 5.99 after trading in 5.93-5.99 range

DATA/EVENTS TO WATCH

  • Japan Household Spending YoY JUL (05.00 am)
  • Japan GDP Growth Rate QoQ Final Q2 (05.20 am)
  • Japan Current Account JUL (05:20 AM)
  • Japan Bank Lending YoY AUG (05.20 am)
  • France Balance of Trade JUL (12.15 pm)
  • Euro Area GDP Growth Rate QoQ 3rd Est Q2 (02.30 pm)
  • Euro Area Employment Change QoQ Final Q2 (02.30 pm)

MACROS

Economic recovery gathering pace… Economic recovery in India gathered pace in the first week of September, according to a business resumption index compiled by Japanese investment bank Nomura, as retail and recreation showed signs of a pickup. The Nomura India Business Resumption Index (NIBRI), a weekly tracker of the pace of normalisation of economic activity, went up to 77.4 for the week ended September 6, touching another post-lockdown high. The index reading at the end of August was 75.7.

Centre to convince states to borrow…. The Centre will seek to convince states they should borrow from the market to meet the goods and services tax (GST) compensation cess shortfall, thus allowing the federal government room to raise funds in the event of hostilities with China escalating and allowing it to provide a stimulus to aid the Covid-hit economy. States are well placed to raise funds from the market as their borrowings remain below the mandated level under the Fiscal Responsibility and Budget Management (FRBM) Act and have as much as INR2 lakh crore parked in treasury bills, said officials with knowledge of the matter.

Early Diwali for two-wheeler makers… Diwali may arrive on two wheels this time. Scooter and motorbike manufacturers are aiming for bumper festive season sales, with almost all of them revising their September-October-November production plans upwards by 8-25% to cater to the anticipated high demand. Hero MotoCorp, Bajaj Auto, TVS Motor and Royal Enfield are major players who have charted out a new output plan for September-October, adding to their earlier Diwali plans drawn up in June-July

Hiring sentiment picks up in July-Sept… The impact of the Covid-19 pandemic continues to be felt on corporate India’s hiring plans but there’s been a small pick-up in sentiment from the July-September quarter, the latest Manpower Employment Survey has revealed. However, hiring sentiment in four of seven Indian industry sectors is the weakest reported since the survey began 15 years ago. These are the manufacturing, mining and construction, services, and wholesale and retail trade sectors. The outlook is better for the remaining three — public administration and education; finance, insurance and real estate; and transportation and utilities.

E-comm firms seeks tax clarity… Top digital companies including Amazon, Flipkart, Bookmyshow and Facebook have sought clarity from the government on how a 1% tax on ecommerce transactions announced in the last budget would be levied. The first instalment of the new tax is due in October and there is some ambiguity over its calculation, experts said.

Kamath panel allows loan rejig in 26 sectors… The KV Kamath committee — tasked by RBI to prepare broad parameters for restructuring loans of Covid-hit companies — has selected 26 sectors for such recast and recommended categorising accounts into mild, moderate and severe to ensure quick turnaround. The 26 sectors include aviation, real estate, automobiles, consumer durables, construction, roads, wholesale trading, textiles and tourism.

FPIs may get to buy bad loans directly… Foreign portfolio investors (FPIs) may soon be able to directly acquire bad loans being sold by banks and other lenders. Sebi is planning to include stressed assets in investments permitted for FPIs, said two people with knowledge of the matter. The move could be a shot in the arm for the stressed assets market in India as FPIs are known for their big-ticket purchases, experts said.

FPIs busy dumping Indian bonds… Overseas portfolio investors have sold a record $15 billion of Indian bonds this year, reflecting their risk aversion for emerging-market debt and concerns over the country’s fiscal health. The highest-ever net outflows could well hurt demand for Indian debt securities, sending yields in a direction opposite to that of policy interest rates, now at record lows. If Indian debt continues to lose its allure, sovereign and corporate funding costs could trend higher at a time when New Delhi and states are borrowing more in the aftermath of the pandemic-induced disruptions.

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