NEW DELHI: Waning hopes of aggressive US rate cuts, a rise in crude oil prices, another fraud at PNB and disappointment over Budget announcements may drag domestic equity indices on Monday.
Here is breaking down the pre-market actions.
TRADE SETUP
Singapore trading sets stage for gap-down start
Nifty futures on the Singapore Exchange were trading 51 points, or 0.43 per cent, lower at 11,766.50, indicating a gap-down start for Dalal Street.
Tech view: Nifty forms Shooting Star
Nifty50 formed a 'Bearish Engulfing' candle on the daily chart on Friday, and a 'Shooting Star' on the weekly scale. Any dead-cat bounce can be an opportunity to consider fresh short positions, as the index appears to be headed to test its 50-day moving average at 11,727.
Asian stocks drop on waning US rate cut hopes
Asian shares fell on Monday as hopes for US rate cuts were dashed by a US labour report that showed nonfarm payrolls jumped 224,000 in June, beating forecasts for 160,000, in a sign the world's largest economy still had fire. MSCI's broadest index of Asia-Pacific shares outside Japan stumbled 0.3 per cent, with South Korea's KOSPI off 1 per cent and Japan's Nikkei down 0.6 per cent.
No fireworks till Diwali: ET poll
An ET poll of 20 money managers and heads of research at domestic brokerages showed that the Nifty is likely to see limited upside or could possibly drift lower by Diwali. About 27 per cent see the Nifty at 12,000-12,500, which would mean an upside of 2-6 per cent from current levels.
Indias MSCI weight gets a boost
Indias weightage on the Emerging Market index and several global indices could potentially increase by 80-100 basis points after the budget proposed raising the free float of stock in locally listed companies. Indias current weight on the MSCI EM index stands at 8.4%
Oil prices edge higher
Crude prices rose on Monday, adding to gains in the previous session on better-than-expected US jobs data, although gains were tempered by worries over the prolonged Sino-US trade war. Brent crude futures were up 10 cents, or 0.2 per cent, at $64.33. US WTI was up 14 cents, or 0.2 per cent, at $57.65 a bar.
US stocks settled lower on Friday
On Wall Street, the Dow Jones Industrial Average fell 43.88 points, or 0.16 per cent, to 26,922.12, the S&P500 index lost 5.41 points, or 0.18 per cent, to 2,990.41 and the Nasdaq Composite index dropped 8.44 points, or 0.1 per cent, to 8,161.79.
PNB reports Rs 3,805 crore fraud
State-run lender Punjab National Bank declared loan exposure of Rs 3805 crore to bankrupt Bhushan Power and Steel as fraudulent. In a notice to exchanges PNB said it had reported the fraud to the Reserve Bank of India on the basis of forensic audit findings
DIIs buy Rs 276 cr worth equities
Net-net, foreign portfolio investors (FPIs) were net sellers of domestic stocks to the tune of Rs 89 crore on Friday, data available with NSE suggested. DIIs were net buyers to the tune of Rs 276 crore, data suggests.
MONEY MARKETS
Rupee up: The rupee pared early losses Friday to settle 8 paise higher at 68.42 against the US dollar as market participants said fiscal deficit and gross borrowings announced in the budget were broadly in-line with expectations.
10-year bonds: India 10-year bond yields fell 0.07% to 6.70% on Friday, from 6.77% in the previous session, according to RBI data.
Call rates: The overnight call money rate weighted average was 5.67% on Friday, according to RBI data. It moved in a range of 4.40-5.90%.
TOP VIDEO
Swaminathan Aiyar in an exclusive conversation with FM Nirmala Sitharaman
TOP QUOTE
'If the NBFCs are financially sound, why bail them out'
MACROS
FM Nirmala Sitharaman to address RBI board
Finance Minister Nirmala Sitharaman is scheduled to address the post-budget meeting of the RBI's central board on Monday and highlight the key points of the Budget, including the fiscal consolidation roadmap.
Govt may reduce stake in select state-run cos to 40%
The government is open to reducing its stake in select state-run firms including oil companies to as low as 40%, reports ET. This will help the government meet the budgeted disinvestment target of Rs 1.05 lakh crore. Finance minister Nirmala Sitharaman had said in her budget speech that the government was considering the option of taking its stake below 51% on a case-by-case basis in companies that have to be retained under state control.
Changing residency may not help tax evaders
Tax authorities would soon start targeting undisclosed overseas assets of individuals, who had acquired those when they were residents in India but had since become non-residents. Changes proposed to the black money law as part of the 2019-20 budget are aimed at covering such non-residents who possess undeclared overseas assets. Read More – Source
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ET Markets
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