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Sunday 26 January 2020

Markets change globally amid pall of gloom

Nifty, Sensex fell 0.70%, 0.94% respectively, as concerns on the declining health of markets diminished investors' risk appetite

Mumbai: Equity benchmarks Nifty and Sensex, on 6 September, end in the green amid the waning signals of the US-China trade war and hopes of the government measures to bolster the auto sector. On a weekly basis, Nifty and Sensex fell 0.70% and 0.94% respectively, as concerns on the declining health of domestic and global markets diminished investors’ risk appetite.

Data released last week revealed that US job growth slowed in August and retail hiring declined for the seventh continuous month. Central bank rate cuts and government hopes have been fanned by poor macroeconomic data from world’s major markets.

The key support level, according to the pivot charts, is placed at 10,890.13, followed by 10,834.07. Key resistance levels to check out for will be 10,979.63 and 11,013.07 once the index moves upward.

The index, up by 1.22%, closed at 27,247.90 at Nifty Bank on 6 September. Soon to act as the crucial index support, the pivot level is placed at 27,028.63, followed by 26,809.37. The key resistance levels, on the upside, are placed at 27,389.13 and 27,530.37.

US markets

During this month, as investors digested a report on mixed US jobs and bet on a Federal Reserve interest rate cut, Dow industrials and the S&P 500 closed a little higher on Friday. The stimulus plan of China helped smoothen some concerns around global growth of markets. In August, US job growth slowed down more than what was expected and retail hiring declined for the seventh month. Strong wage gains countered this slow down by supporting consumer spending and keeping the economy moderately expanding amid threats rising from trade tensions.

The Dow Jones Industrial Average rose 0.26% (69.45 points) to 26,797.6, the S&P 500 increased by 0.09% (2.72 points) to 2,978.72 and the Nasdaq Composite dropped by 0.17% (13.75 points) to 8,103.07.

Asian markets

Amid a cautious market mood, modest gains were eked out by Asian stocks on Monday, as investors expected likely stimulus to support growth in major markets of the world, which indicated further struggle.

Asia-Pacific shares’ broadcast index of the MSCI outside Japan added 0.1%, while Australian stocks gained 0.1%. South Korea’s KOSPI edged up by 0.8% and Japan’s Nikkei increased by 0.5%.

SGX Nifty

A positive opening for the broader index in India was indicated by trends (0.14% or 15.5 points gained) on SGX Nifty, which was trading around level 10,975 on the Singaporean Exchange.

Oil rises as Saudi Arabia signals OPEC cuts to continue

After Saudi Arabia denied to moderate its OPEC policy, oil prices rose on Monday, with Prince Abdulaziz bin Salman being made the new energy minister for the largest crude exporter of the world over the weekend.

By 0106 GMT, Global benchmark Brent increased by 7 cents at $61.61 a barrel, while West Texas Intermediate of the US was 0.3% higher at $56.72 a barrel to 20 cents.

Rupee up 12 paise at 71.72 a dollar

Continuing its winning momentum for the third session in a row on 6 September, the Indian rupee rose by 12 paise and settled at 71.72 against the US dollar as tensions between the US and China eased. The domestic currency, on a weekly basis, lost 30 paise to the US dollar on a weekly basis.

In the last three trading sessions, the rupee has appreciated by 67 paise. The local unit opened on a strong note at 71.87 at the interbank foreign exchange market on Friday to close at 71.72.

18 PSBs hit by 2,480 cases of fraud of Rs 32,000 cr in Q1: RTI

In the first quarter of this fiscal, 18 public sector banks were rattled with a total of 2,480 fraudulent cases involving Rs 31,898.63 crore, revealed an RTI query. State Bank of India (SBI), India’s largest lender, with 38% fraudulent shares remained the biggest prey, said Chandrashekhar Gaur, a Neemuch-based activist, on 8 September.

A sum of Rs 12,012.77 crore, according to the RTI reply, was involved in as many as 1,197 cheating cases detected in SBI in the first quarter.

Fraud cases as many as 75 were reported in Bank of Baroda in the first quarter which involved Rs 2,297.05 crore, 45 cases of fraud amounting to Rs 2,133.08 crore were reported in Oriental Bank of Commerce, Rs 2,035.81 crore fraud involved in 69 cases in Canara Bank, Rs 1,982.27 crore fraud involved in 194 cases in Central Bank of India and 31 cases of fraud amounting to Rs 1,196.19 crore were reported in United Bank of India.

China’s exports fall in August as US trade war rumbles

In August, China’s exports fell by 1.0% on-year, according to official data revealed on 8 September. The US-China trade war roiled markets in two of the top economies of the world. In July, the drop comes after a surprise 3.3% recoil in July despite the year long battle with Washington and weakening global demand.

Trade surplus of China also dropped sharply from $44.58 billion in July to $34.83 billion in August, while imports matched its July figure and continued a four-month decline at 5.6% on-year.

FPI pull out Rs 1,263 cr from capital markets in 1st week of Sept

Foreign investors, continuing their unrestrained selling bout, withdrew from the Indian capital markets a sum of Rs 1,263 crore in the first week of September as enhanced surcharge on FPIs were rolled back by the government.

Foreign Portfolio Investors (FPIs), according to latest repositories data, pulled out Rs 4,263.79 crore from equities while infusing Rs 3,000.86 crore into the debt segment during 3-6 September, shifting into a total outflow of Rs 1,262.93 crore.

Pulling out Rs 2,985.88 crore and Rs 5,920.02 crore in July and August respectively from both domestic equity and debt capital markets, the FPIs have remained net sellers for the previous two months.

The second quarter GDP of Japan grows at a slower pace on weaker capital spending

The economy of Japan grew slowly compared to what was initially estimated for the second quarter, owing to softer capital spending, economy’s signaling shear from weaker global growth in markets and the trade war between US and China.

The economy grew an annualized 1.3% in April-June, weaker than the preliminary reading for 1.8% annualized growth, Cabinet Office data showed Monday. The reading was in line with the economists’ median forecast for a 1.3% gain.

Forex reserves descend by $446 million to $428.6 billion

Owing to a drop in foreign currency assets in the week to 30 August, the foreign exchange reserves of the country fell by $446 million to $428.604 billion, according to RBI data generated on Friday. The reserves, which had touched its highest of $430.572 billion in August this year, descended by $1.45 billion to $429.050 billion in the previous week.

In the week to 30 August, a major element of overall reserves — foreign currency assets —declined by $1.124 billion to reach $396 billion, the Reserve Bank said. The foreign currency assets, expressed in terms of the US dollar, include appreciation or depreciation effect of non-US units like the pound, yen and the euro held in the foreign exchange reserves.

Think-tank urges Britain to look out for recession

The Resolution Foundation, a think-tank, on Monday urged Britain to get ready for recession and consider changes for managing its economy while seeing off the downturn when it comes.

In the second quarter of the year, there was a shrinkage in the British gross domestic product and the markets are still struggling to gear momentum with the approach of Brexit. Before the United Kingdom leaves the European Union, it could already be in a technical recession.

The Bank of England, according to the Resolution Foundation, because of its low rate of key interest could muster only a quarter of the effectiveness needed in a typical recession. The bond-buying program of the bank is likely to manifest less effective now.

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