Trends on SGX Nifty indicate a cautious opening for the index in India with a 12 points loss. The Nifty futures were trading at 16,656 on the Singaporean Exchange around 7:30 AM.
Wall Street fell on Thursday on fears of a faster tapering of the Federal Reserve's bond purchase program, although gains in banks and some strong earnings reports helped cap losses.
The Indian markets could open flat, despite largely positive Asian markets today and despite negative US markets on Thursday, said Deepak Jasani, Head-Retail Research, HDFC Securities.
"The Nifty is expected to open around 16,680 , up by 40 points. Nifty has support in 16,550-16580 range and will face resistance at 16,700-16,720 range. Buy on dips with strict stoploss can be a good strategy for the current markets. Fresh buy should be initiated on closing above 16720 with higher than average volumess," Gaurav Udani, Founder and CEO, ThincRedBlu Securities.
Nifty erased the morning gains and ended another day without much change on August 26. Nifty opened flat and remained in an 80 points band through the day and after zigzagging ended the day 2 points or 0.02 percent higher at 16,638.
Nifty has once again started to form flat closes day after day, like it did in August 5-11 period. However post-August 11, the Nifty broke upwards of the range closes. Advance decline ratio fell compared to the previous day but is still at 1:1, suggesting some deterioration in the broader market sentiments. As long as Nifty is not able to post healthy day on day gain, the broader market will struggle to bounce up. 16,712-16,603 is the band for Nifty for the near-term and any breach either way could take the Nifty in that direction, said Jasani.
Mohit Nigam, Head - PMS, Hem Securities said markets around the globe during the day shall closely monitor Fed President Jerome Powell’s speech on the final day of Jackson Hole symposium which might give some clues on bond purchase tapering. Meanwhile, US President Joe Biden vows for a retaliation against deadly blasts outside Kabul airport. The USA's GDP grew at 6.6 percent annual rate during the second quarter.
On domestic front, Wipro partners with DataRobot to offer AI services at a larger scale, Infosys’ subsidiary has been awarded an order to digitize driver licenses and vehicle registrations in a Canadian province, SEBI approves appointment of Sanjeeb Chaudhri as part time Chairman of IDFC First Bank for 3 years, Adani Green to raise up to $750 million through bond sale overseas, InterGlobe Aviation to start 8 new domestic flights from September, Aurobindo Pharma gets USFDA approval for cyclophosphamide injection, heavyweights like HCL Tech, Indian Oil, Grasim will have their AGMs today. On the technical front, 16,500 and 16,750 are immediate support and resistance in Nifty 50, Nigam added.
US stocks snap five-day winning streak
US stock indexes fell slightly on Thursday, snapping a five day win streak for the S&P 500 index, after investors weighed data on second quarter economic growth and weekly jobless benefit claims, a day ahead of a speech by Federal Reserve Chairman Jerome Powell.
The Dow Jones Industrial Average was down 53.39 points, or 0.15 percent, at 35,352.11 and the S&P 500 was down 10.14 points, or 0.23 percent, at 4,486.05. The Nasdaq Composite was down 22.96 points, or 0.15 percent at 15,018.90.
The pause comes after the S&P 500 index on Wednesday notched its 51st record high of 2021, matching the highest number of new records at this point in the year since 1995. A pair of deadly bombings outside of Afghanistan’s Kabul airport may have also affected risk tolerance and contributed to some selling pressure.
Asian markets tumble
Asia-Pacific markets tumbled in early trade on Friday as investors remained cautious ahead of the Federal Reserve’s annual Jackson Hole symposium where Fed Chair Jerome Powell is due to speak.
The Nikkei 225 in Japan declined 0.85 percent while the Topix index fell 0.74 percent. South Korea’s Kospi was down 0.33 percent.
Profit growth at China’s industrial firms in July grew at its slowest clip this year, as elevated raw material prices and supply chain constraints from extreme weather as well as sporadic coronavirus cases weighed on the manufacturing sector. Industrial firms’ profits increased 16.4 percent on an annual basis in July to 703.67 billion yuan ($108.51 billion), compared to a 20 percent gain in June.
US Fed to speak virtually today
US Fed Chair Powell will speak at 10 a.m. Eastern Friday at a Jackson Hole symposium of global central bankers that is being held virtually, and could provide some guideposts for the timing and pace of the Fed’s plans to scale back on crisis-era policy accommodations.
Dallas Fed President Robert Kaplan, who is not currently a voting member of the Federal Open Markets Committee, said he believes the progress of economic recovery warrants tapering of the Fed's asset purchases to commence in October or shortly thereafter.
India’s central bank is in no hurry to reverse course on record low interest rates despite mounting worries around inflation, Reserve Bank of India Governor Shaktikanta Das told CNBC.
US economy growth robust
The US economy grew at a robust 6.6 percent annual rate last quarter, slightly faster than previously estimated, the government said Thursday in a report that pointed to a sustained consumer-led rebound from the pandemic recession. But worries are growing that the delta variant of the coronavirus is beginning to cause a slowdown.
The government’s upgraded estimate for growth in the April-June quarter fell somewhat shy of expectations. Some economists had predicted a 7 percent annual rate or more. They based that view on a belief that consumer spending had accelerated even faster than the sizzling 11.8 percent rate first reported. Thursday’s revised estimate for consumer spending, which drives about 70 percent of economic activity, was upgraded by 0.1 percentage point to 11.9 percent.
Second wave raises asset risks for banks: Moody's
India's second coronavirus wave is increasing asset risks for banks, but the country's economic recovery, a tightening of loan underwriting criteria, and continued government support will prevent a sharp spike in problem loans, according to a Moody's Investors Service report.
"A severe deterioration of banks' asset quality is unlikely, despite an expected rise in new loan impairments, particularly among individuals and small businesses that were hit hardest by the virus outbreak. This is because government initiatives like the emergency credit linked guarantee scheme (ECLGS) have been effective in providing immediate liquidity for businesses," Moody's Vice President and Senior Credit Officer Alka Anbarasu said.
The dollar held firm on Friday after the U.S. Federal Reserve’s hawkish wing called for tapering bond purchases as investors looked to a highly-anticipated speech by Fed Chair Jerome Powell later in the day.
Gold prices steady
Gold prices were steady on Friday, as investors awaited Fed chief Jerome Powell’s speech later in the day at the Jackson Hole symposium after some US central bank officials called for paring bond purchases.
Spot gold rose 0.1 percent to $1,793.68 per ounce. US gold futures rose 0.1 percent to $1,796.70.
Gold prices on August 26 fell for the second successive day, down by Rs 98 to Rs 47,350 per 10 gram in the Mumbai retail market on rupee strength and subdued global cues. The yellow metal traded lower as investors were cautious ahead of Jackson Hole Symposium that may provide insight about Fed’s bond tapering plan.
The price of 10 gram, 22-carat gold in Mumbai was Rs 43,373 plus 3 percent GST, while 24-carat 10 gram stood at Rs 47,350 plus GST. The 18-carat gold is quoted at Rs 35,513 plus GST in the retail market.
(To receive our E-paper on whatsapp daily, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)