Trends on SGX Nifty indicate a cautious opening for the index in India with a 11-points gain. The Nifty futures were trading at 17,840 on the Singaporean Exchange around 7:30 AM.
Indian markets could open flat to mildly higher, in line with flat Asian markets today and despite positive US markets on Thursday, said Deepak Jasani, Head-Retail, HDFC Securities.
"Nifty is expected to open at 17,860, up by 20 points. Nifty is in a strong bullish trend with support at 17,580- 17,620 range. Traders can use buy on correction strategy with strict stoploss for targets of 17,880 and 17,910," Gaurav Udani, CEO & Founder, ThincRedBlu Securities.
Mohit Nigam, Head - PMS, Hem Securities, said the benchmark Indices are expected to open on a slight positive note as suggested by trends on SGX Nifty. On the technical front, markets are in a very strong bullish trend. We may face some resistance at 18,000 in Nifty 50 while 17,650 may act as immediate support in Nifty 50."
Nifty closed at another record high on September 23 when it just kept rising hour by hour without any major corrections. Advance Decline ratio was sharply positive, though lower than that in the morning. Nifty is marching towards the 18,000 mark slowly and steadily, unless some global event (like Evergrande) upsets this momentum, Jasani said.
Stocks to watch out for
Some stock specific actions can be witnessed in stocks such as UltraTech Cement (Company plans to meet 100 percent of its electricity requirement through renewables sources by 2050), Globus Spirits (NCLT has approved the scheme of amalgamation between Unibev and Globus Spirits), Adani Enterprises (Incorporated a wholly owned subsidiary called Adani Digital Labs).
Accenture results to have positive impact on IT stocks
Accenture Plc.'s revenue rose in the fourth quarter --24 percent YoY to $13.42 billion in the quarter ending August--aided by improved business across its various arms. Q1 guidance implies continued growth acceleration at the high end, also driving FY22 guidance of 12-15 percent, well above street expectations. This could have a positive impact on IT stocks in India.
US stocks gain over 1%
US stocks gained more than 1 percent on Thursday as investors appeared relieved about the Federal Reserve’s stance on tapering stimulus and raising interest rates.
The Federal Reserve offered no surprises, signaling that it is on track to start scaling back bond purchases this year, and perhaps raise interest rates next year, assuming a continued economic recovery from the pandemic. With the Fed out of the way for now, investors were set to turn their attention to the third-quarter earnings season.
The Dow Jones Industrial Average rose 506.5 points, or 1.48 percent, to 34,764.82, the S&P 500 gained 53.34 points, or 1.21 percent, to 4,448.98 and the Nasdaq Composite added 155.40 points, or 1.04 percent, to 15,052.24.
The prospect of tighter monetary policy spurred a global selloff in bonds. Long-term Treasury yields surged the most in 18 months as traders brought forward their expectations for the first Fed rate hike to the end of 2022. 10 year yields in the US rose 11.6 bps to 1.427 percent.
Asian stocks trade mixed in early trade
Stocks in Asia-Pacific were mixed in Friday morning trade, as investors continue to watch developments surrounding China Evergrande Group. This, despite US shares rallying and sovereign bond yields surging on economic optimism.
The Nikkei 225 in Japan jumped 1.95 percent in morning trade while the Topix index gained 2.1 percent. South Korea’s Kospi edged 0.49 percent higher.
China's Evergrande crisis
Chinese property developer Evergrande has not said whether it will fulfil its interest payments to investors on its US-dollar bond – a key milestone investors have been keeping their eyes on. The interest payment due Thursday amounted to $83 million. It was for a $2 billion dollar-denominated bond that’s due to mature in March 2022. Dollar bonds are typically held by foreign investors.
The Wall Street Journal reported Thursday that Chinese authorities have told local officials to prepare for a potential demise of Evergrande. Shares of cash-strapped China Evergrande fell as much as 6 percent in early trade on Friday, paring gains of nearly 18 percent the previous day as time ticked by on an interest payment deadline for the country's most indebted developer.
Unemployment aid applications up in US
The number of Americans applying for unemployment aid rose last week for a second straight week to 351,000, a sign that the delta variant of the coronavirus may be disrupting the job market’s recovery, at least temporarily.
As the job market has strengthened, unemployment aid applications, which generally track layoffs, have tumbled since topping 900,000 early this year, reflecting the economy’s reopening after the pandemic recession.
Oil prices up
Oil prices rose on Thursday, with Brent crude touching its highest level in more than two months, supported by growing fuel demand and a draw in US crude inventories as production remained hampered in the Gulf of Mexico after two hurricanes.
Brent crude settled up $1.06, or 1.4 percent, at $77.25 a barrel, its highest price since mid-July. US West Texas Intermediate (WTI) crude rose $1.07, or 1.5 percent, to $73.30 a barrel.
UK inflation to top 4% this year
The Bank of England on Thursday maintained its stimulus amount and record-low interest rate, even as it warned that UK annual inflation would top four percent this year. The BoE 's nine-strong monetary policy committee (MPC) voted unanimously to hold its key borrowing cost at 0.1 percent, a statement said.
Policymakers voted 7-2 in favour of keeping its so-called quantitative easing stimulus at almost £900 billion ($1.2 trillion, 1.0 trillion euros).
Norway's central bank raised its benchmark interest rate and said it expects to hike again in December, joining a growing list of nations moving away from emergency-level borrowing costs.
The South African Reserve Bank left the key interest rate unchanged at a record low of 3.5 percent as expected, but raised its economic growth forecast for 2021 to 5.3 percent from 4.2% percent.
FII investments in domestic market
Even as foreign funds are getting jittery about the domestic market due to the steeply higher valuation amid the massive market rally, their holding in the domestic equities rose to $630 billion as of August, according to a American brokerage report.
As of June this year, the value of FII investment was only $592 billion, which means that as the market rallied frenetically, their holding value jumped by $38 billion even though their net incremental investment was almost nil between this period.
Dollar declines
The dollar fell across the board on Thursday as improved risk sentiment in global financial markets wiped out its gains in the previous session after the US Federal Reserve flagged plans to dial back its stimulus this year.
The US Dollar Currency Index, which measures the greenback against a basket of six rivals, was 0.5 percent lower at 93.037. The index, which had risen 0.25 percent on Wednesday, was on pace for its biggest daily percentage drop in a month but remains close to the near 10-month high touched in late August.
RBI announcements on sale of govt bonds
The Reserve Bank of India (RBI) on September 23 announced Open Market Purchase and simultaneous sale of government bonds for Rs 15,000 crore each on September 30. As announced in the Governor’s statement of June 4, 2021, the Reserve Bank will conduct the open market purchase of government securities under the G-sec Acquisition Programme (G-SAP 2.0) for an aggregate amount of Rs 15,000 crore on September 30, 2021, the RBI said in a release.
Also, the RBI will sell short-term maturity bonds for the same amount on that day, the RBI said. RBI conducts simultaneous buy and sale of government bonds to manage the yield curve in the bond market.
Six stocks under F&O ban
Six stocks - CANBK ESCORTS IBULHSGFIN IDEA IRCTC & PNB are under F&O ban today.
