What changed for the market while you were sleeping? Top 15 things to know

Image result for What changed for the market while you were sleeping? Top 15 things to knowThe benchmark indices closed moderately in green on August 2, but weakness continued for the fourth straight week in a row, keeping the Nifty below psychological 11,000 level.

The BSE Sensex after witnessing a swing of 768 points closed 99.90 points higher at 37,118.22 on August 2 but lost 2 percent for the week.

Nifty gained 17.40 points to close at 10,997.40 but saw 2.5 percent weekly loss. The index formed a bullish candle that resembles a High Wave kind of pattern on daily charts but saw bearish candle formation on the weekly scale.

The broader markets also saw some recovery from day’s low and cut down losses to end 0.3 percent lower on Friday. For the week, the Nifty Midcap index lost 2.82 percent and Smallcap index shed 4.74 percent.

According to the pivot charts, the key support level is placed at 10,870.8, followed by 10,744.3. If the index starts moving upward, the key resistance levels to watch for out are 11,102 and 11,206.7.

The Nifty Bank closed at 28,204.95, down by 162.30 points on August 2. The important pivot level, which will act as crucial support for the index, is placed at 27,912.6, followed by 27,620.3. On the upside, key resistance levels are placed at 28,520.9 and 28,836.9.

Stay tuned to Moneycontrol to find out what happens in currency and equity markets today. We have collated a list of important headlines from across news agencies.

US Markets

Wall Street extended its sell-off on Friday on renewed trade fears as the benchmark S&P 500 index and Nasdaq saw their worst weekly percentage plunges since December, when investors were spooked by the prospect of a looming recession. The blue chip Dow and the S&P 500 hit their lowest levels since late June with S&P 500 and the Nasdaq registering their fifth consecutive days of losses.

The Dow Jones Industrial Average fell 98.41 points, or 0.37%, to 26,485.01, the S&P 500 lost 21.51 points, or 0.73%, to 2,932.05 and the Nasdaq Composite dropped 107.05 points, or 1.32%, to 8,004.07.

Asian Markets

Asian shares extended their losses on Monday as a sharp escalation in the Sino-US trade war kept finiancial markets on edge, while the Japanese yen and bonds held near recent peaks as nervous investors stuck with perceived safe havens.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell for a seventh straight day to a two-month trough of 502.83, down 0.25%, marking the longest stretch of losses since October 2018. Nikkei slipped 1.1% to the lowest since early June, while Australian shares were also down for their fourth straight session in the red. South Korea’s Kospi tumbled 1.2% to hit the lowest since December 2016.

SGX Nifty

Trends on SGX Nifty indicate a negative opening for the broader index in India, a with 0.65 percent loss or 72 points. Nifty futures were trading around 10,943-level on the Singaporean Exchange.

Oil prices drop as US-China trade war fuels growth concerns

Oil prices fell on Monday amid concerns about weaker crude demand after US President Donald Trump said he would impose tariffs on more Chinese imports, potentially ramping up a trade war between the world’s two largest economies.

Tensions in the Middle East offered some support to prices, with Iran seizing a tanker that it said was smuggling fuel. Brent crude was down 50 cents, or 0.8%, at $61.39 a barrel by 0029 GMT. US crude was down 24 cents, or 0.4%, at $55.42 a barrel.

Rupee slumps 54 paise to 69.60 vs USD

The rupee dived 54 paise on August 2 to close at an over six-week low of 69.60 against the US dollar as soaring crude oil prices and a fresh flare up in US-China trade tensions weighed on emerging market currencies. Global markets tumbled and safe-haven assets like the Japanese yen gained after President Donald Trump on Thursday announced that the US will impose an additional 10 per cent tariff on USD 300 billion worth Chinese imports, which Beijing vowed to retaliate.

In a series of tweets, Trump said the new tariff, in addition to the 25 per cent on goods worth USD 250 billion that was previously in place, would come into effect from September 1. Persistent foreign fund outflows and a strengthening greenback also put pressure on the domestic currency, forex traders said. At the interbank foreign exchange (forex) market, the rupee opened at 69.26 a dollar, then lost further ground and touched a low of 69.67 during the session.

Forex reserves fall by $727 mn to $429.6 bn

The country’s forex reserves decreased by $727 million to $429.649 billion for the week ended July 26, led by a decline in foreign currency assets, RBI data showed on Friday. The forex kitty had increased by $1.579 billion to a new lifetime high of $430.376 billion in the previous week ended July 19.

In the reporting week, foreign currency assets, which are a major component of the overall reserves, fell by $1.734 billion to $399.357 billion, the central bank said. Expressed in dollar terms, foreign currency assets include the effect of appreciation/depreciation of non-US units like the euro, pound and yen held in the reserves.

Two lakh jobs cut in last 3 months across automobile dealerships: FADA

Around two lakh jobs have been cut across automobile dealerships in India in the last three months as vehicle retailers take the last resort of cutting manpower to tide over the impact of the unprecedented sales slump, according to industry body FADA.

With no immediate signs of recovery, the Federation of Automobile Dealers Associations (FADA) feared that the job cuts may continue with more showrooms being shut in the near future and sought immediate government intervention such as reduction of GST to provide relief to the auto industry.

“The majority of job cuts have happened in the last three months…It started around May and continued through June and July,” said FADA President Ashish Harsharaj Kale.

CII urges govt to lower base price for 5G spectrum auctions

Industry body CII on August 4 urged the government to lower the base price for 5G spectrum, saying the high price of such radiowaves will halt accelerated growth of the sector and deter adoption of telecom services by the masses.

The Confederation of Indian Industry (CII) cautioned that participation of Indian telecom companies may be severely constrained in the upcoming auction for 5G spectrum due to low average revenue per user, and added that high reserve prices could further subdue this.

In a representation submitted to the government, the CII made a case for a lower 5G spectrum reserve price, the auction for which is expected to be held later this year.

FPIs pull out Rs 2,881 cr in just two trading sessions in August

Continuing their selling spree, foreign investors have withdrawn a net amount of Rs 2,881 crore from the Indian capital markets in the first two sessions of August on account of domestic as well as global headwinds.

According to latest depositories data, foreign portfolio investors (FPIs) pulled out a net sum of Rs 2,632.58 crore from equities and Rs 248.52 crore from the debt segment during August 1-2, taking the cumulative net outflow to Rs 2,881.10 crore. Prior to this, FPIs withdrew a net Rs 2,985.88 crore from the Indian capital markets (both equity and debt) during July 1-31.

India needs to grow at 9% to achieve PM Modi’s target of $5 trillion economy: EY

The country will need to grow by 9 percent every year for five years continuously and raise aggregate investment rate to 38 percent of GDP to achieve Prime Minister Narendra Modi’s target of turning India into a $5 trillion economy, EY has said. In its latest edition of Economy Watch, EY said assuming India grows by projected 7 percent in the current fiscal year ending March 31, 2020, the size of the economy will grow to $3 trillion from $2.7 trillion in the previous year.

It will have to grow by 9 percent in each of the five subsequent years to take the size of the economy to $3.3 trillion in FY21, $3.6 trillion in FY22, $4.1 trillion in FY23, $4.5 trillion in FY24 and $5 trillion in FY25.

“Assuming an inflation rate of 4 percent which is the target inflation rate as per the Monetary Policy Framework, a real growth rate close to 9 percent would be required to increase the size of the Indian economy to $5 trillion by FY25. This implies a nominal growth rate of 13 percent, assuming an average annual depreciation of the rupee viz-a-vis the US$ at 2 percent,” it said.

Spandana Sphoorty Financial IPO to open today

Spandana Sphoorty Financial, the Andhra Pradesh-based microfinance lender, will launch its initial public offering for subscription on August 5. Axis Capital, ICICI Securities, IIFL Securities, JM Financial, IndusInd Bank and Yes Securities India are book running lead managers to the issue which will close on August 7.

The issue consists of a fresh issue of Rs 400 crore and an offer for sale by promoters and investors. The offer for sale is up to 59,67,097 shares by Kangchenjunga Limited, 14,23,114 shares by Padmaja Gangireddy, 7,96,509 shares by Vijaya Siva Rami Reddy Vendidandi (VSRRV), 7,83,747 shares by Valiant Mauritius Partners FDI Limited, 1,32,831 shares by Helion Venture Partners II, LLC, 1,29,732 shares by Kedaara Capital Alternative Investment Fund – Kedaara Capital AIF 1 and 1,23,695 shares by Helion Venture Partners, LLC.

The company is aimed to raise around Rs 1,198.13 crore at the lower end of price band of Rs 853-856 per share and Rs 1,200.93 crore at a higher price band.

Government to infuse Rs 10,000 cr in housing finance companies

At a time when the shadow banking industry is under stress due to liquidity, the government on August 2 approved the Reserve Bank of India (RBI) norms for credit guarantee to the non-banking financial institutions (NBFCs).

“To further ease flow of funds to the housing sector, the National Housing Bank (NHB) is making available from today, a liquidity infusion facility of Rs 10,000 crore for housing finance companies (HFCs) as additional liquidity for individual housing loans, for affordable housing,” the finance ministry said in a press release.

RBI bans NBFCs from charging loan foreclosure penalties

The Reserve Bank on August 2 barred non-banking finance companies from charging pre-payment penalties or foreclosure charges from individual borrowers. “NBFCs shall not charge foreclosure charges/pre- payment penalties on any floating rate term loans sanctioned for purposes other than business to individual borrowers, with or without co-obligants,” the central bank said in a notification, without specifying from when the new ruels will be effective.

The central bank said the relevant rules governing the same have been updated to reflect the change. Foreclosure charges are part of the fee income for any lender and adds to its bottomline.

RBI imposes Rs 50 lakh fine on SBI

State Bank of India (SBI) on August 3 said the Reserve Bank has imposed a penalty of Rs 50 lakh on it for non-compliance relating to reporting of frauds.

The RBI in exercise of the powers conferred under various sections of the Banking Regulations Act, has imposed a penalty of Rs 50 lakh on the bank for non-compliance with its directions relating to reporting of frauds, SBI said in a regulatory filing.

100 companies to report June quarter numbers today

As many as 100 companies will report their results for the quarter ended June later today which include names like Dilip Buildcon, HOEC, Indian Bank, KEI Industries, Jindal Steel, Torrent Power, Venky’s, and Usha Martin among others.

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