Indian stock market is expected to open on a cautious note as trends on SGX Nifty indicate a flat opening for the broader index in India with a loss of 12 points.
The BSE Sensex dropped 150 points to 53,027 yesterday while the Nifty50 declined 51 points to 15,799 and formed a bullish candle on daily charts.
As per pivot charts, the key support level for the Nifty is placed at 15,704 followed by 15,609. If the index moves up, key resistance levels to watch out for are 15,878 and 15,957.
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 ended a seesaw session slightly down on Wednesday as investors staggered towards the finish line of a downbeat month, a dismal quarter, and the worst first-half for Wall Street's benchmark index since US President Richard Nixon's first term.
The Dow Jones Industrial Average rose 82.32 points, or 0.27%, to 31,029.31, the S&P 500 lost 2.72 points, or 0.07%, to 3,818.83 and the Nasdaq Composite dropped 3.65 points, or 0.03%, to 11,177.89.
Shares in the Asia Pacific fell at the market open on Thursday as investors await data from China. The Nikkei 225 in Japan dropped 0.72% in early trade, while the Topix slipped 0.76%. In Australia, the S&P/ASX 200 fell 0.33%.
South Korea’s Kospi declined 0.76%, while the Kosdaq was 0.19% lower. MSCI’s broadest index of Asia-Pacific shares was down 0.22%
Trends on SGX Nifty indicate a cautious opening for the broader index in India with a loss of 12 points. The Nifty futures were trading around 15,765 levels on the Singaporean exchange.
Bond market rally signals an impending economic recession
The 10-year note yield peaked at 3.48 percent on June 14, the highest since 2011. It has since fallen back to around 3.22 percent. The yield jumped from 2.18 percent on March 16, when the Fed first raised its reference rate from a range of zero to 0.25 percent to a range of 0.25 percent to 0.5 percent (it’s now in a range of 1.5 percent to 1.75 percent). The 1.30-percentage-point jump in the 10-year yield implies a 3.5-percentage point rise in the funds rate, which would bring it close to 4 percent. That’s high enough to kill the economic expansion that has been floating on a sea of readily-available and cheap credit.
The recession will curb credit demand and enhance the zeal for safe havens, all to the benefit of Treasuries. Also, the robust dollar makes US government securities attractive to foreigners, as does the fact that the 10-year Treasury note has a higher yield than the sovereign debt in 13 of 18 developed countries. In recent business cycles, the yield on the 10-year Treasury note peaked before a recession commenced. It topped out at 6.7 percent in June 2000, ahead of the 2001 recession. Similarly, it peaked at 5.1 percent in June 2006, 18 months before the 2007-2009 recession commenced.
India allows local oil producers to sell to private companies
India’s cabinet on June 29 approved a plan that would allow local crude producers to sell oil to private companies, a move that would help raise revenue of state-run producers such as ONGC and Oil India. The decision would be effective from Oct. 1, and existing conditions to sell crude oil to the government-run companies would be waived, the government said in a statement, adding that exports will not be permitted.
"Companies will now be free to sell crude oil from their fields in domestic market. Government revenues … will continue to be calculated on a uniform basis across all contracts," the government said.
Dollar gains, yields ease after Powell inflation comments
US Treasury yields eased for a second consecutive day and the dollar rose on Wednesday after Federal Reserve Chairman Jerome Powell said there is a risk the US central bank's interest rate hikes will slow the economy too much, but the bigger risk is persistent inflation.
"The clock is kind of running on how long will you remain in a low-inflation regime. ... The risk is that because of the multiplicity of shocks you start to transition into a higher inflation regime and our job is to literally prevent that from happening and we will prevent that from happening," Powell said at a European Central Bank conference.
Oil prices stable as market weighs fuel stocks build amid supply concerns
Oil prices were little changed on Thursday as markets weighed a rise in US gasoline and distillate inventories and worries about slower economic growth amid concerns of supply tightness. Brent crude futures for August dropped 25 cents, or 0.2%, to $116.01 a barrel in light trading as the August contract is set to expire on Thursday. The more-active September contract was at $112.18, down 27 cents, or 0.2%.
Sebi allows FPIs to participate in exchange-traded commodity derivatives market
Markets regulator Securities and Exchange Board of India (SEBI) has allowed foreign portfolio investors (FPIs) to participate in the exchange-traded commodity derivatives market.
In the statement issued on June 29 after a meeting of the SEBI director board, the regulator has said the existing Eligible Foreign Entity (EFE) route, which required actual exposure to Indian physical commodities, has been discontinued. Any foreign investor desirous of participating in Indian ETCDs with or without actual exposure to Indian physical commodities can do so through the FPI route.
FII and DII data
Foreign institutional investors (FIIs) net sold Rs 851.06 crore worth of shares whereas domestic institutional investors (DIIs) remained net buyers to the tune of Rs 847.46 crore worth of shares on June 29, as per provisional data available on the NSE.
Stock on F&O ban list on NSE
One stock - Sun TV Network - is on the NSE F&O ban list for June 30. 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
With inputs from Reuters & other agencies