Market benchmarks, the Sensex and the Nifty, snapped a two-day losing streak to end with healthy gains on August 30, as hopes of a stimulus from the government lifted sentiment.
The rupee's rise against the US dollar and a positive global sentiment after the US and China resumed trade negotiations, all worked to keep the market in the positive zone.
The rally in equities shot up the cumulative market capitalisation of BSE firms to Rs 1,40,98,451.66 crore from Rs 1,39,83,324.95 crore on August 29, making investors richer by Rs 1.15 lakh crore.
The Nifty closed above the psychological 11,000-mark and formed a hammer pattern on the daily chart. It also snapped a two-week losing streak and gained 1.8 percent to form a spinning-top pattern on the weekly scale.
According to the pivot charts, key support level is placed at 10,917.8, followed by 10,812.4. If the index remains on the upward trajectory, key resistance levels to watch out for are 11,085.6 and 11,148.
The Nifty Bank closed at 27,427.85, up 0.45 percent on August 30. The important pivot level, which will act as crucial support for the index, is placed at 27,170.97, followed by 26,914.13. On the upside, key resistance levels are placed at 27,635.57 and 27,843.33.
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
US Markets
Wall Street ended the week with a lackluster session on Friday as investors were cautious ahead of a holiday weekend in which a fresh round of US tariffs on Chinese imports were due to be levied.
While the S&P 500 registered its biggest weekly gain since June, August had its biggest monthly decline since May. Investors had fled risky assets in August due to escalations in the US-China trade war and the inversion of a key part of the US yield curve which is often a recessionary signal.
The Dow Jones Industrial Average rose 41.03 points, or 0.16%, to 26,403.28, the S&P 500 gained 1.88 points, or 0.06%, to 2,926.46 and the Nasdaq Composite dropped 10.51 points, or 0.13%, to 7,962.88.
Asian Markets
Global stocks were hit by US-China trade frictions on Tuesday while the British pound flirted with 2 1/2-year lows as Prime Minister Boris Johnson indicated he could call an election to stymie lawmakers’ efforts to avert a no-deal Brexit.
MSCI’s broadest index of Asia-Pacific shares outside Japan shed 0.2% in early trade while Japan’s Nikkei was flat.
SGX Nifty
Trends on SGX Nifty indicate a lower opening for the broader index in India. The index fell from 11,012 on Friday, 30 August to 10,930 on Tuesday which translates into a fall of 80 points. Indian market remain shut on Monday on account of a public holiday.
Oil falls as South Korea growth revision highlights trade war impact
Oil prices fell on Tuesday, declining for a second day as more signs emerged of the toll from the US-China trade war, with South Korea revising down second-quarter growth due to lower exports.
US crude was down 32 cents, or 0.6%, at $54.78 a barrel by 0055 GMT, while Brent was 7 cents lower at $58.59 a barrel.
China, US kick off new round of tariffs in trade war
The United States began imposing 15% tariffs on a variety of Chinese goods on Sunday - including footwear, smart watches and flat-panel televisions - as China began imposing new duties on US crude, the latest escalation in a bruising trade war.
US President Donald Trump said the sides would still meet for talks later this month. Trump, writing on Twitter, said his goal was to reduce US reliance on China and he again urged American companies to find alternate suppliers outside China.
China lodges WTO trade complaint against US
China on Monday said it had lodged a complaint against the US with the World Trade Organization (WTO), one day after new tariffs imposed by Washington on billions of dollars of Chinese goods came into force.
"The Chinese side is strongly dissatisfied and resolutely opposed to that. In accordance with relevant WTO rules, China will firmly safeguard its legitimate rights and interests," Beijing's commerce ministry said in a statement published on its website.
Washington moved ahead Sunday with the new tariffs on Chinese imports as it stepped up a high-pressure campaign aimed at compelling Beijing to sign a new trade deal.
Macroeconomic headwinds weighed on investor sentiments in 2018-19: SEBI annual report
As macroeconomic headwinds weighed on investor sentiments through the year, foreign portfolio investors pulled out Rs 38,930 crore in 2018-19, according to market regulator Sebi's annual report.
"In order to further develop the Indian securities market as an avenue for fundraising, eligibility norms for FPIs (Foreign Portfolio Investors) were relaxed and data privacy concerns of FPIs were addressed," the 2018-19 annual report said.
Eight core sectors growth slows to 2.1% in July
Growth of eight core industries dropped to 2.1 percent in July mainly due to a contraction in coal, crude oil, natural gas and refinery products, according to an official data. The eight core sector industries - coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity - had expanded by 7.3 percent in July last year.
According to the data released by the government on September 2, output of coal, crude oil, natural gas and refinery products recorded negative growth in July.
Forex kitty slips below $430-bn-mark, down by $1.45 bn
After scaling new highs for weeks, the foreign exchange reserves fell by a steep $1.45 billion to $429.050 billion in the week to August 23 due to a fall in foreign currency assets, according to the latest weekly data released by the Central bank on August 30.
In the previous week, the reserves had marginally slipped by $70.8 million to $430.501 billion but still remained above the $430 billion-mark. The reserves had touched a life-time high of $430.572 billion in the week to August 9. In the week to August 23, foreign currency assets, a major component of overall reserves, declined by $1.198 billion to $397.128 billion, the Reserve Bank said.
Japan manufacturing activity shrinks for fourth month in August: PMI
Japanese manufacturing activity declined for a fourth straight month in August amid flagging demand, a revised business survey showed on Monday, underlining a darkening outlook for the world’s third-largest economy.
The final Jibun Bank Japan Manufacturing Purchasing Managers’ Index (PMI) edged down to a seasonally adjusted 49.3 from 49.4 in July, and also off a preliminary 49.5. The index stayed below the 50.0 threshold that separates contraction for a fourth month, marking the longest run of shrinkage since a six-month stretch from March to August 2016.
Rupee gains 38 paise to close at 2-week high against dollar
The rupee appreciated by 38 paise to close at a two-week high of 71.42 against the US dollar on Friday led by a rally in domestic equities and renewed hopes of the US-China trade talks. At the interbank foreign exchange, the rupee opened up at 71.76 and gained further strength to touch a high of 71.38 against the US dollar.
The domestic currency finally settled with a gain of 38 paise of 0.53 per cent at 71.42, a level not seen since August 16.
DBS revises India's real GDP growth to 6.2% for FY20
Singapore's banking group DBS has revised India's real GDP growth forecast downwards for the current financial year to 6.2 percent from 6.8 percent projected earlier.
"Factoring in a weak start to FY20 (June quarter was the first quarter), a return to favourable base effects in 2HFY20, and likelihood of growth returning above 6.5 percent towards end of the year, we revise down our real GDP growth forecast to 6.2 percent YoY vs 6.8 percent previously," said the bank in its report on September 2.
The resultant negative output gap will keep inflationary pressures in check. Expecting the trajectory to improve in FY21, the growth is likely to close in on 7 percent with a 6.8 percent growth pace, said DBS in the report titled "India: More policy support likely after weak Q2 growth".
India Inc's foreign borrowings more than double to $4.98 billion in July: RBI
India Inc's foreign borrowings grew over two-fold to $4.98 billion in July over the same month a year ago, according to Reserve Bank data. Indian firms had raised $2.18 billion in borrowings from overseas markets in July 2018.
Of the total money borrowed by the domestic companies, $3.37 billion was through the automatic route of external commercial borrowing (ECB), $1.56 billion via approval route of ECB and the rest of $50.9 million was raised by issuing masala or rupee denominated bonds.
In the ECB category, the major borrowers tapping the automatic route were Adani Ports And Special Economic Zone Ltd -- which raised $750 million for rupee expenditure and $650 million for refinancing of earlier ECB, ONGC Videsh $500 million for other purposes.
FPIs net sellers for second straight month, pull out Rs 5,920 cr in Aug
Foreign investors pulled out a net amount of Rs 5,920 crore from the Indian capital markets in August even as the government rolled back enhanced surcharge on FPIs last week.
The withdrawal from the capital markets (both equity and debt) in August is "contrary to the expectation" since the Centre last week announced revocation of enhanced super-rich tax on foreign and domestic equity investors imposed in the Budget, said Himanshu Srivastava, senior analyst manager research at Morningstar.
According to the latest depositories data, foreign portfolio investors (FPIs) withdrew a net amount of Rs 17,592.28 crore from equities and pumped in a net sum of Rs 11,672.26 crore in the debt segment, translating into a total net outflow of Rs 5,920.02 crore during August 1 - 30.
With inputs from Reuters & other agencies
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
