The stock markets opened on a positive note on Tuesday- September 14. The benchmark indices were in the green at the opening bell as easing retail inflation triggered buying sentiment in the market. Besides, a firm trend on other Asian bourses also supported the uptick in domestic equities, brokers said. Sensex was up 233.27 points or 0.40 percent at 58,411.03 while the broader Nifty50 was 63.65 points up or 0.37 percent at 17,418.95.
Bajaj Finance was the top gainer in the Sensex pack, rising 0.78 per cent, followed by Dr Reddy’s, Kotak Bank, ICICI Bank, IndusInd Bank, Sun Pharma, Axis Bank and Reliance Industries. On the other hand, Infosys, Bajaj Auto, PowerGrid and UltraTech Cement were trading with losses.
The Consumer Price Index (CPI)-based retail inflation declined to 5.3 per cent in August from 6.69 per cent in the same month a year ago, food inflation dipped at a much faster pace to 3.11 per cent from 9.05 per cent in August 2020.
In the previous session, the Sensex ended 127.31 points or 0.22 per cent lower at 58,177.76. The broader NSE Nifty dipped 13.95 points or 0.08 per cent to 17,355.30.
The Dow Jones Industrial Average and the S&P 500 booked their first positive close in six sessions Monday, with the blue-chip index scoring its best daily gain in about five weeks. The Nasdaq Composite ended 1 percent lower, extending its losing streak to a fourth session in a row with selling in healthcare, growth and value stocks weighing on equities.
House Democrats have proposed a capital gains tax rate hike that was lower than many had feared. The party’s new tax policy proposal includes a hike to 25 percent from 20 percent on capital gains, more benign than the feared raise to 39.6 percent. The Democrats also proposed a corporate tax hike to 26.5 percent from 21 percent, though President Biden had initially desired a raise to 28 percent.
The US federal budget deficit narrowed to $2.71 trillion in the first 11 months of the fiscal year, the Treasury Department said Monday. This is down $297 million or 10 percent from the $3 trillion deficit over the same period last year.
An investor survey conducted by Deutsche Bank found more than two-thirds of respondents expecting at least a 5 percent decline in stocks by the end of the year. The same survey found the biggest risks to the market are new variants that bypass vaccines, and higher than expected inflation or bond yields.
China fired a fresh regulatory shot at its tech giants, telling them to end a long-standing practice of blocking each other's links on their websites. The Financial Times also reported that China is aiming to break up the payments app Alipay.
Asian markets mixed
Shares in Asia-Pacific were mixed in Tuesday morning trade as investors look ahead to the release of US consumer inflation data for August.
The Nikkei 225 in Japan rose 0.8 percent while the Topix index advanced 0.66 percent. South Korea’s Kospi gained 0.83 percent.
US government bond yields dipped on Monday with markets looking ahead to consumer inflation data on Tuesday that is expected to show a continuing slowdown in the pace of price increases.
Yields are seen remaining in a tight range after last week's 10- and 30-year auctions were met with strong demand.
Dollar declines
The dollar was down on Tuesday morning in Asia, as investors await U.S. inflation data that could provide a clue to the US Federal Reserve’s timetable for asset tapering.
The U.S. Dollar Index that tracks the greenback against a basket of other currencies inched down 0.06 percent to 92.597 by 10:21 PM ET (2:21 AM GMT), after retreating from a two-week high of 92.887 hit earlier on Monday.
The USD/JPY pair inched up 0.10 percent to 110.08.The AUD/USD pair inched down 0.05 percent to 0.7362 and the NZD/USD pair inched down 0.10 percent to 0.7114.The USD/CNY pair inched down 0.02 percent to 6.4495 and the GBP/USD pair inched up 0.08 percent to 1.3847.
Oil extends gains
Oil prices extended gains on Tuesday, hovering near a six-week high, on signs another storm could affect output in Texas this week even as the US industry struggles to return production after Hurricane Ida wreaked havoc on the Gulf Coast.
Brent crude rose 15 cents, or 0.2 percent to $73.66 a barrel by 0048 GTM, having gained 0.8 percent the previous day. US West Texas Intermediate (WTI) crude also climbed 23 cents, or 0.3 percent, to $70.68 a barrel, after rising 1.1 percent on Monday.
Gold advances
Gold held an advance as investors waited for U.S. inflation data that may affect when the Federal Reserve will start reducing stimulus.
Consumer price index data due later Tuesday are expected to show an annual pace of inflation of 5 percent or more for a fourth month. This follows a report last week which showed the producer price index for final demand rose to a fresh series high as persistent supply chain disruptions pushed costs higher.
Bullion is trading below $1,800 an ounce as traders weigh risks from the delta virus variant and elevated inflation.
If consumer prices come in hotter-than-expected, expectations for when the Fed could start tapering bond purchases could shift to November from December, according to Edward Moya, a senior market analyst at Oanda Corp.
Consumer Price Index-based Inflation (CPI) for August 2021 came in at 5.30 percent, compared with 5.59 percent in July, as food prices cooled further, especially in the case of vegetable inflation, data released by the National
Statistical Office (NSO) showed on September 13. Consumer Food Price Inflation (CFPI) for August stood at 3.11 percent compared to 3.96 percent in July.
However, concerns remained with high edible oil prices, which registered an increase of 33 percent year-on-year (YoY).
RBI selects 8 entities
The Reserve Bank of India (RBI) on September 13 announced that it has selected eight entities for the second cohort of regulatory sandbox on cross- border payments. RBI had received 27 applications from 26 entities, of which, only eight have been selected. The entities will be allowed to commence testing of their products from the third week of September, RBI said in a release.
Five stocks under F&O ban
Five stocks - Canara Bank, Exide Industries, Indiabulls Housing Finance, LIC Housing Finance and NALCO - are under the F&O ban today.
