Morning cues: Rally in global mkts a ray of hope for Nifty?

The US markets closed sharply higher giving the indices their best day of the month on the back of a pair of better-than-expected economic reports and after ECB president Mario Draghi said that the central bank would do whatever it takes to support the euro. The CBOE VIX, tumbled to finish below 18.

On economic data front, weekly jobless claims fell 35,000 to a seasonally adjusted 353,000, dropping to almost a four-year low. Overall durable goods orders jumped 1.6% as demand for aircraft gained. Pending home sales slipped 1.4 in June to 99.3.

Key data to watch today in US

The US GDP is seen slowing further in the second quarter. Consensus estimates peg growth around 1.2% compared to 1.9% in the first quarter.

The University of Michigan's Consumer Sentiment Index is seen unchanged from early July levels, around 72. This would be a lower reading compared to the 87 readings through May.

European markets

Big moves were seen in the European markets, ending a four day losing streak, as investors piled into the beaten down sectors after the European Central Bank president Mario Draghi said it would do whatever was needed to preserve the euro. His comments revived hopes that the central bank may be ready to step in and buy highly stressed government bonds.

Euro zone crisis

Over in Greece, the government reached a broad agreement with the Troika inspectors for a further 11.5 billion euro zone austerity measures. But the details are yet to be worked out.

The Greek coalition partners still have to give their final approval. The final nod for more aid to Greece is only expected in September, when Troika inspectors return.

Paying a surprise visit to Greece, European Commission President Jose Manuel Barrosso extended his support to Greece, but urged the country for further progress on reforms.

Asian markets

Asian markets opened with over 1% gains today morning. At 7:40 am (IST), China's Shanghai Composite was up 0.18% or 3.84 points at 2,129.84. Hong Kong's Hang Seng rose 1.90% or 359.13 points at 19,251.92. 

Japan's Nikkei gained 1.23% or 103.74 points at 8,546.84. Singapore's Straits Times was up 0.28% or 8.54 points at 3,013.11. 

South Korea's Seoul Composite added 1.69% or 30.05 points at 1,812.52. Taiwan's Taiwan Weighted advanced 1.31% or 91.54 points at 7,062.23. 

Meanwhile, Japan's June nationwide C-P-I data came in at minus 0.2% on a year on year basis. The core C-P-I was at minus 0.6%.  The June retail sales numbers came in below estimates at 0.2%. On a month on month basis it slipped to minus 1.2%.

And back home, a late selloff dragged the Nifty 70 points lower to a close below 5,050; down 2% for the July series.

Currency

The euro rose to a two-week high of 1.23 to the dollar following ECB chief Mario Draghi’s comments. It is up a percent at 1.22. The dollar index slips below the 83 mark.

Commodities

Brent crude prices continued with gains. Brent is currently at around USD 105 per barrel levels after touching a high of USD 106 per barrel.  Meanwhile, gold rises to USD 1,610 an ounce.

Key earnings in India

In a CNBC-TV18 poll, ICICI Bank is expected to post a 28% bottomline growth, but margins expected to contract sequentially. Meanwhile PNB may report 16% growth in profits. Its NIMs are expected to be subdued.

Stocks in News

Hind Zinc and Balco stake

CNBC-TV18 learns that Anil Agarwal has written to the Prime Minister on Hindustan Zinc and BALCO saying that he is open to negotiations for buying government's stake in the two companies and possibly hinting at upping its earlier of around Rs 17,000 crores.

VSNL demerger on the way

The Tata Communication management said that while it has got no communication from the cabinet on the VSNL land demerger, it expects the process to take at least six-nine months.

Stake sale

Deutsche Securities have bought a 9.15% stake in the SKS Microfinance via qualified institutional placement.

Sterlite Q1 earnings

Sterlite reported operationally poor set of numbers. Its profits came in 27% lower at Rs 1,201 crores due to mark to market loss of Rs 217 crores on foreign currency loans and higher interest costs.

Bata earnings

Bata saw a 28% growth in pat year on year. Their topline came in lower than estimates at Rs 503 crores.

Harsha Jethmalani
harsha.jethmalani@network18online.com