OIL TANKS ON OPEC STATUS QUO; Q2 GDP IN FOCUS AT HOME

OIL TANKS ON OPEC STATUS QUO; Q2 GDP IN FOCUS AT HOME

WORLD MARKETS

US markets were closed yesterday for the Thanksgiving holiday on Thursday.

Nymex crude nosedived $4.64 or 6.3% to $69.05 a barrel and brent crude plunged $5.2 to $72.6 a barrel to a fresh four-year low under $75 a barrel after OPEC decided not to cut production, despite a huge oversupply in world markets. These are the lowest levels for Nymex crude since May 2010 and for Brent oil since August 2010.

European markets, except a marginally lower FTSE, gained between 0.2%-0.8%. FTSE was pressured by fall in oil and gas stocks on account of plunge in oil prices. German inflation data came in at 0.5% in November, its lowest level since February 2010. Final gross domestic product data for Spain showed growth of 1.6% in the third quarter compared to the same period last year.

In prepared comments for a speech, ECB President Draghi said that the governing council was unanimous in its commitment to use further instruments if needed but added that monetary policy alone cannot do all the heavy lifting.

AT HOME

Benchmark indices ended higher by a fifth of a percent after a choppy expiry session, extending the rising streak to second day. Sensex gained 53 points to settle at 28439 while Nifty finished at 8494, up 18 points. BSE mid-cap and small-cap indices outperformed yet again, rising half a percent each. BSE IT and Power indices gained the most among the sectoral indices, rising 1.1% and 0.8% respectively while Consumer Durable and Realty indices lost 1% and 0.3% respectively.

FIIs net bought stocks and index futures worth Rs 390 cr and 2187 cr respectively but net sold stock futures worth Rs 706 cr. DIIs were net buyers to the tune of Rs 337 cr.

Rupee depreciated 3 paise to close at 61.875/$.

The Reserve Bank of India yesterday issued final guidelines for companies seeking to set up payments banks and small finance banks in a bid to expand banking services to more people and small businesses. Elaborating the eligibility criteria, the central bank has included non-bank prepaid card issuer, mobile companies, telecom companies, business correspondents, PSU companies, real sector cooperatives and supermarket chains as promoters of payments banks, while it has allowed NBFCs, MFIs and local area banks to convert to small banks.

Payment banks can take demand deposits of maximum Rs 1 lakh per customer and can issue ATM/debit cards but not credit cards. Also, they can offer payments, remittance services and can distribute financial products like mutual funds and insurance. However, the RBI has made it clear that payments banks cannot undertake lending activities. Small finance banks are aimed at lending to “unserved and underserved sections including small business units”, the Reserve Bank of India (RBI) said.

OUTLOOK

Today morning, barring a modestly lower Hang Seng, other Asian markets are trading with modest gains and SGX Nifty is suggesting about 35 points higher opening for our market.

After rebounding from our indicated 8430 support on Tuesday, Nifty has moved up to 8494 in last two sessions and is set to open with an upward gap today, giving more credence to the 8430 support and vindicating our view.

After 8520 target was achieved, we have been working with a fresh target of 8640. That continues to be the next level to eye once 8535, the top made on Tuesday is taken out.

India's second quarter GDP data would be released today and is expected to show a growth of 5% as against 5.7% in the previous quarter and 5.2% in the same quarter last month.