India : Sensex, Nifty open firm on FO expiry day;Infosys dips, Cipla up
The market has opened in green on August Futures and Options expiry day. The Sensex is up 74.49 points or 0.3 percebt at 28134.43 and the Nifty is up 25.45 points or 0.3 percent at 8675.75. About 562 shares have advanced, 165 shares declined, and 26 shares are unchanged.
Cipla, Bajaj Auto, Axis Bank, Maruti and TCS are top gainers while Wipro, Infosys, BHEL, NTPC and HDFC are losers in the Sensex.
The Indian rupee opened marginally higher at 67.09 per dollar versus previous close of 67.11.
Mohan Shenoi of Kotak Mahindra Bank said, “Global currency markets are cautious and rangebound ahead of Yellen’s Jackson Hole speech as it could give clues on US Fed rate hike.”
Dollar held steady led by uncertainty ahead of a meeting of central bankers at Jackson Hole on Friday.
In a big boost to infrastructure companies, NITI Aayog is preparing a Cabinet note for infra related ministries — road transport, urban development, petroleum — to ease arbitration norms and release stalled payments of infra companies.This comes amid reports that about Rs 1.65 lakh crore of banks’ Rs 3.65 lakh crore exposure to the construction sector is stressed.
CNBC-TV18 learns that the new arbitration law note will address norms on disputes that lead to delay in project payments. Project delays are largely due to reasons like environment clearance and land acquisition.
Deutsche Bank has downgraded Axis Bank to hold but did not change target at Rs 590 per share. The brokerage firm warns that the stock lacks near-term triggers though it remains a structurally strong bank considering a weak transitionary phase coupled with somewhat premium valuations. The stock is up 51 percent in last six months outperforming Sensex (up 22 percent) and Bankex (up 42 percent).
Deutsche Bank is cautious that its stress is likely to remain elevated resulting in higher credit costs and expects recovery only in FY19. It expects slippages to rise to 3 percent in FY17 and will remain elevated in FY18 as well.
“Credit costs may rise to170 basis points (bps)/140bps in FY17/FY18 from an average of 90 bps over last five years,” it says.
Citi continues to expect sluggish global growth in 2016 and 2017 with relatively steady growth in advanced economies.
It says pickup in emerging market growth weak real investment particularly in emerging markets, has been among the reasons why global activity has been weak. Elevated global uncertainty and threats to globalisation are among the drivers of sluggish real investment.
“The upcoming US Presidential election is one – but not the only – contributor to elevated global uncertainty. Our base case is for a Clinton victory and continuity in policy. But there are major risks. On the upside, significant fiscal stimulus may follow, boosting both US and global growth. However, the election outcome (particularly a Trump win) could prolong and exacerbate uncertainties and trigger a slowdown in US and global growth,” it says.
Among global peers, Asian stocks slipped, taking their cue from an overnight drop on Wall Street, while the dollar marked time ahead of Friday’s speech by Federal Reserve Chair Janet Yellen at the global central bankers’ meeting. MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.3 percent. Australian stocks fell 0.1 percent, South Korea’s Kospi shed 0.2 percent and Japan’s Nikkei nudged down 0.3 percent.
Wall Street retreated, pulled lower by weakness in the materials and healthcare sectors, with the Dow losing 0.4 percent and S&P 500 falling 0.5 percent.
Recent hawkish comments from some Fed officials, including Vice Chairman Stanley Fischer, have raised expectations that Yellen might signal a hike in September.
Crude dropped to a one-week low after a government report showed that US crude inventories unexpectedly rose last week. Meanwhile Iran’s oil ministry said the country hasn’t yet decided whether to join informal OPEC talks next month in Algiers. Gold prices slipped to a 4-week low as investors seemed to move from the sidelines ahead of a speech by Federal Reserve Chair Janet Yellen this weekend.
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