SGX Nifty up 20 points; here's what changed for market while you were sleeping

The domestic equity market may see a positive start to Tuesday's trade, tracking firm cues from other Asian markets. But technical charts are hinting at selling pressure at higher levels.

Here’s breaking down the pre-market actions.

STATE OF THE MARKETS

SGX Nifty signals positive start
Nifty futures on the Singapore Exchange traded 18.50 points, or 0.16 per cent higher at 11,337.50, in signs that Dalal Street was headed for a positive start on Tuesday.

Tech View: Nifty forms a Gravestone Doji candle
Nifty50 breached its crucial resistance at 10,250 level on a closing basis, but saw intraday profit booking near its previous swing high of 11,341. The chart resembled an indecisive Gravestone Doji. Analysts said support for the index is shifting higher, but confidence in the market is missing at higher levels.

Asian stocks rise in early trade
Hong Kong's Hang Seng index climbed 1.17 per cent, or 284.61 points, to 24,662.04. China's Shanghai Composite index was flat, inching up 0.24 points to 3,379.49. Japan's Nikkei 225 index climbed 0.79 per cent, or 175.57 points, to 22,505.51 in early trade.

Oil firms on US stimulus hopes, demand recovery
Crude oil gained more ground on Tuesday, with prices underpinned by expectations of US stimulus and a rebound in Asian demand as economies reopen. Brent crude added 7 cents, or 0.2 per cent, to $45.06 a barrel. WTI crude rose 14 cents, or 0.3 per cent, to $42.08 a barrel.

US stocks ended mixed
Wall Street's major averages ended mixed as investors eyed fiscal stimulus in the United States amid the Covid-19 crisis. On Monday, the Dow Jones Industrial Average index increased 357.96 points, or 1.30 per cent, to 27,791.44. The S&P 500 index was up 9.19 points, or 0.27 per cent, to 3,360.47. The Nasdaq Composite index slipped 42.63 points, or 0.39 per cent, to 10,968.36.

Q1 earnings today
Bosch, Motherson Sumi Systems, Metropolis Healthcare, Bajaj Electricals, Symphony, Shriram City Union Finance, Chalet Hotels, KRBL, Galaxy Surfactants, AIA Engineering, Central Bank of India and Oracle Financial Services Software are among companies which will announce their fourth quarter results on Tuesday.

DIIs sell Rs 505 cr worth of stocks
Net-net, foreign portfolio investors (FPIs) were buyers of domestic stocks to the tune of Rs 302.88 crore, data available with NSE suggested. DIIs were net sellers to the tune of Rs 504.92 crore, data suggests.

MONEY MARKETS
Rupee: The rupee rose by 3 paise to settle at 74.90 against the US dollar on Monday tracking positive domestic equities.

10-year bonds: India 10-year bond yield rose 0.12 per cent to 5.89 after trading in 5.89-5.91 range.

MACROS

SC questions spectrum sale by bankrupt telcos… The Supreme Court has questioned the sale of spectrum by bankrupt telcos Reliance Communications and Aircel, and sought to know from the government how it plans to recover ₹43,000 crore of AGR dues from these companies if all their assets were sold off in the interim. The observations that came Monday could potentially impact the resolution plans of the two telcos. The insolvency court has already approved the sale of Aircel’s assets, and was about to take a call on RCom and its units.

China slaps tit-for-tat curbs on US officials… China said it will sanction 11 Americans in retaliation for similar measures imposed by the US on Friday, but the list doesn’t include any members of the Trump administration. The US said on Friday that it was placing sanctions on 11 Chinese officials and their allies in Hong Kong, including Chief Executive Carrie Lam, over their roles in curtailing political freedoms in the former British colony.

Amazon Prime Day sales eclipse Diwali numbers… Amazon India’s Prime Day sales, its first major event after the virus outbreak, have surpassed the daily numbers of its flagship sale during Diwali last year, according to two people aware of the matter. It clocked over $600 million in two days of Prime Day sale last week as demand for products, primarily electronics, surged online after Covid-19 kept shoppers at home. But the gross aggregate numbers for Prime Day sales will still be lower as the Diwali event happens over a five-day period.

Pace of economic recovery improving… The pace of economic recovery improved during the previous week on account of divergent trends in indicators like mobility and employment, Nomura said in a note on Monday. The Nomura India Business Resumption Index increased to 71.8 in the week ended August 9, after being stuck around the 70-mark for last three weeks. The weekly tracker of the pace at which economic activity normalises stood at 70.4 in the prior week. According to the note, while Google’s retail and recreation mobility index and Apple’s driving index picked up incrementally, Google’s workplace mobility worsened.

Aramco doing due diligence on RIL… Saudi Aramco, one of the world’s biggest oil companies, will decide on its proposed $15 billion investment in Reliance Industries' oil and petrochemicals business after reviewing the findings of a due diligence exercise. Aramco CEO Amin Nasser told an investor call on Monday evening that “it is a big deal” and that “Aramco is going to take time to decide”. He did not give any timeline.

MFs see first net outflow in 4 years… Indicating unease among retail investors after the recent rally in the stock market, equity mutual funds in July witnessed a net outflow for the first time in four years. Inflows through the systematic investment plan route also showed a marginal decline during the month, data released by industry trade body AMFI showed. However, strong inflows through the debt fund route lifted the MF industry’s assets under management in July by a little over Rs 89,800 crore to more than Rs 27 lakh crore

Banks struggle to reach lending pact… Banks are struggling to create a common pact for lending to companies that will need funds to grow, rejig their loans, and battle the slowdown wrecked by the Covid-19 pandemic. Large private and foreign banks have voiced their reservations against SBI's proposal to frame an omnibus inter-creditor agreement (ICA) which would be binding on all lenders. Under a rigid and uniform ICA, a bank which is unwilling to give fresh loan in proportion to its share in the total outstanding loan will be required to sell off its exposure and exit the consortium.

China auto sales up for 4th month… China’s auto sales in July climbed 16.4 per cent from a year earlier, the fourth consecutive month of gains as the world’s biggest vehicle market comes off lows hit during the country’s coronavirus lockdown. Sales rose to 2.11 million vehicles, according to data from the China Association of Automobile Manufacturers.

Japan's current account surplus at 5-year low… Japan posted its smallest current account surplus in more than five years in June, Ministry of Finance data showed on Tuesday, mainly due to a slump in exports, highlighting the heavy hit to external demand from the coronavirus pandemic. The current account surplus was 167.5 billion yen ($1.58 billion), the smallest monthly surplus since January 2015, a finance ministry official said.