Top 10 things to know before the market opens
The Indian stock market is expected to open flat as trends on SGX Nifty indicate a muted opening for the index in India with a 9-points fall.
On September 2, the BSE Sensex climbed 514.33 points to 57,852.54, while the Nifty50 rose 157.90 points to 17,234.20 and formed bullish candle on the daily charts as the closing was higher than opening levels.
According to pivot charts, the key support levels for the Nifty are placed at 17,114.1, followed by 16,994. If the index moves up, the key resistance levels to watch out for are 17,299.9 and 17,365.6.
Stay tuned to Moneycontrol to find out what happens in the currency and equity markets today. We have collated a list of important headlines across news platforms which could impact Indian as well as international markets:
The S&P 500 and Nasdaq eked out record finishes on Thursday, while the Dow also posted a modest gain, as higher commodity prices helped energy names recover ground and the latest jobs data left investors unfazed about existing positions.
The Dow Jones Industrial Average rose 131.29 points, or 0.37%, to 35,443.82, the S&P 500 gained 12.86 points, or 0.28%, to 4,536.95 and the Nasdaq Composite added 21.80 points, or 0.14%, to 15,331.18.
Asian Indices were trading mixed with Kospi and Taiwan Weighted up 0.5 percent each, while Hang Send and Straits Times trading in the red.
Trends on SGX Nifty indicate a cautious opening for the index in India with a 9-points fall. The Nifty futures were trading at 17,250.50 on the Singaporean Exchange around 07:25 hours IST.
August exports surge 45% YoY, led by strong global orders
Owing to an uptick in global orders, India’s merchandise exports shot up in August, rising by a major 45.17 percent as compared to August, 2020. Impressively, exports also rose by 27.5 percent as compared to August, 2019, before the pandemic struck.
In August, imports saw an equally large rise, going up by 51.5 percent to $47 billion. Similar to exports, as the low base wears off, the jumps in import growth have moderated. Imports had risen by 62.9 percent in July, 98.3 percent in June, 73.6 percent in May and 163 percent in April.
Data released by the Commerce and Industry Ministry on September 2 showed outbound trade rose to $33.14 billion in August, up from $22.83 billion in August, 2020.
US trade deficit shrinks in July as imports fall
The US trade deficit narrowed more than expected in July as imports declined likely because of shortages and a shift in domestic spending from goods to services.
The Commerce Department said on Thursday that the trade gap fell 4.3% to USD 70.1 billion. Data for June was revised to show the deficit at USD 73.2 billion instead of USD 75.7 billion as previously reported.
Oil rises on economic recovery hopes, weaker dollar
Oil prices rose more than USD 1 a barrel on Thursday, rebounding on optimism about the pace of global economic growth despite the coronavirus pandemic, as well as on a sharp decline in U.S. crude inventories.
US weekly jobless claims drop; layoffs tumble to 24-year low
The number of Americans filing new claims for jobless benefits fell last week, while layoffs dropped to their lowest level in more than 24 years in August, suggesting the labor market was charging ahead even as new COVID-19 infections surge.
The weekly unemployment claims report from the Labor Department on Thursday, the most timely data on the economy’s health, also showed the number of people on state unemployment rolls tumbling to a 17-month low in the third week of August.
Declining layoffs should help to ease concerns about the economy even if August’s closely watched employment report on Friday shows a slowdown nonfarm payrolls growth.
Initial claims for state unemployment benefits dropped 14,000 to a seasonally adjusted 340,000 for the week ended Aug. 28, the lowest level since mid-March 2020 when mandatory closures of nonessential businesses were enforced to slow the first wave of coronavirus cases.
China to launch Beijing stock market, President Xi Jinping says
China will set up a new stock exchange in the capital Beijing, President Xi Jinping said Thursday, as the country tries to lure domestic companies into listing at home instead of overseas.
The nation currently has two main exchanges in Shanghai and Shenzhen.
Xi said in a speech at a trade fair that the new stock exchange would support the development of small and medium-sized enterprises, but did not offer further details.
Dollar near one-month low as payrolls test looms:
The dollar sank to its lowest in almost a month against major rivals on Friday, ahead of a crucial U.S. jobs report that could spur the Federal Reserve to an earlier tapering of stimulus.
FII and DII data
Foreign institutional investors (FIIs) net bought shares worth Rs 348.52 crore, while domestic institutional investors (DIIs) net purchased shares worth Rs 381.70 crore in the Indian equity market on September 2, as per provisional data available on the NSE.
Stocks under F&O ban on NSE
One stock - Indiabulls Housing Finance - is under the F&O ban for September 3. Securities in the ban period under the F&O segment include companies in which the security has crossed 95 percent of the market-wide position limit.
Indian equities outperform global peers, Nifty50 surges 18% YTD; will the trend continue?
Indian equity markets staged strong show not only in the last one year but also year-to-date (2021), which is attributable to recovery in growth factors especially after easing Covid-led restrictions, healthy earnings, government and RBI measures, and ample of global liquidity.
The Nifty50 shot up 17.95 percent from the January till August 13, 2021, driven largely by infrastructure, IT, Metals, Energy, Auto and Banking & Financial stocks.
The benchmark index surpassed 16,500 mark for the first time today, hitting a fresh record high of 16,543.60, indicating the month of August is very strong especially after the states in India further eased restrictions which is ultimately expected to boost the further recovery in the economy as well as earnings.
In the same period (YTD), global indices namely Dow Jones Industrial Average surged 15.99 percent, Nasdaq Composite gained 14.96 percent, DAX was up 16.29 percent, FTSE 100 gained 11.65 percent, Kospi was up 10.36 percent, Nikkei 225 up 1.94 percent and Shanghai Composite up 1.24 percent.
“The markets are a function of earnings in the long term and liquidity in the near term. Move away from physical assets and low fixed income rates is leading to significant flow into equities. There is no sign that this migration is going to change anytime soon. This is the short term perspective,” Susmit Patodia, Director, Portfolio Manager at Motilal Oswal Asset Management Company told Moneycontrol.
“Longer term, earnings have been extremely strong as well. We have been in an upgrade cycle for nearly last 4 quarters which has not happened in the last 10 years,” he said.
The Indian index Nifty50, however, underperformed only two major indices which are S&P500 that gained 18.76 percent and CAC 40 that rallied 24.17 percent.
All the central banks so far decided to keep the rates low and maintain the liquidity flow till the consistency in global economic growth, though they are keeping in mind the risk of Covid-19 waves.
“The recovery remains uneven across sectors and needs to be supported by all policy makers. The Reserve Bank remains in “whatever it takes” mode, with a readiness to deploy all its policy levers - monetary, prudential or regulatory. In parallel, our focus on preservation of financial stability continues. At this juncture, our overarching priority is that growth impulses are nurtured to ensure a durable recovery along a sustainable growth path with stability,” said the RBI Governor, Shaktikanta Das in its monetary policy meeting.
Going ahead experts feel the momentum is expected to be supported by the strong earnings activity, flow of liquidity and expected nearly double digit economic growth in FY22.
“Equity valuations are ahead of their fundamentals owing to the signs of growth recovery, government spending and healthy demand outlook from rural economy. This combined with healthy liquidity conditions leads to exuberance in markets and hence, the current rally,” said Rajesh Cheruvu, Chief Investment Officer at Validus Wealth.
Prasun Gajri - Chief Investment Officer at HDFC Life feels while the markets may continue their upward move, what matters, in the end, is the nature of the underlying portfolio as the fundamentals eventually catch up.
- “It is always important to focus on individual stocks and not just on the aggregate market indices. In the current market where stocks across the spectrum are moving up, it becomes doubly important to focus on stocks where the fundamentals are strong and the business models are robust,” he said.
The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Sensex closes 125 pts higher, Nifty at 16,258; metals, top drags; IT, media gain
15 min read . Updated: 09 Aug 2021, 03:55 PM IST
Market closing: The Sensex closed at 54,402.85, up 125.13 points or 0.23%, while the Nifty was at 16,258.25, up 20.05, or 0.12%. Auto, metals, PSU banks, and realty stocks were top drags on Monday.