ALL EYES ON RBI

ALL EYES ON RBI

WORLD MARKETS                             

Dow fell half a percent and Nasdaq and S & P 500 lost 0.3% each amidst lackluster economic data and a renewed decline in oil.

Energy stocks led the losers as Nymex oil plunged $1.95 or 4.14% to $45.17 a barrel. Brent fell below $50 a barrel for the first time since Jan 30.

ISM manufacturing data disappointed, coming in at 52.7 versus the 53.5 forecast. Personal income increased 0.4% in June, while personal consumption increased 0.2%, its smallest gain in four months. Construction spending rose 0.1%, the smallest gain since January

The 10-year Treasury yield fell to 2.15%, while the 2-year yield held near 0.67%.

In Europe, except a marginally lower FTSE, other markets gained 0.8%-1.2%.  Athens stock index closed about 16% lower after opening down 23% in its first day of operation in five weeks. The final Eurozone Manufacturing Purchasing Managers' Index (PMI) came out at 52.4 in July, compared to June's Final PMI figure of 52.5

Earlier, Shanghai Composite ended lower by nearly a percent after the final July reading for Caixin's China purchasing managers' index (PMI) came in at 47.8, below the preliminary reading of 48.2 and marking a two-year low.

AT HOME

Benchmark indices ended marginally higher after a rangebound trading session. Sensex settled at 28187, up 72 points while Nifty finished at 8543, up 10 points. BSE mid-cap and small-cap indices gained 0.5% and 0.9% respectively. BSE Consumer Durable index and Bankex climbed 1.4% and 1% respectively, becoming top gainers among the sectoral indices while Metal and IT indices were the top losers, giving away 1.1% and 0.5% respectively.

FIIs net bought stocks and stock futures worth Rs 350 cr and 463 cr respectively but net sold index futures worth Rs 188 cr. DIIs were net sellers to the tune of Rs 33 cr.

Rupee appreciated 10 paise to end at 64.035/$.

India's Nikkei PMI for July rose to a six-month high of 52.7 from 51.3 in June.

HCL Tech plunged after reporting lower-than-estimated 5.9% q-o-q growth in quarterly net profit at Rs 9777 cr. Dollar revenue rose by 3.25% to USD 1538 mn. In constant currency terms, revenue growth stood at 2.9%. EBIT margins stood at 20.1%, down 123 bps.

Hero MotoCorp reported better-than-expected 33% rise in quarterly net profit at Rs 750 cr. While revenues fell 1.1% to Rs 6955 cr, operating margin improved to 15.1% from 13.3% and EBIDTA stood at Rs 1048 cr, up from Rs 947 cr.

Lok Sabha speaker Sumitra Mahajan yesterday suspended 25 members of Parliament (MPs) from the Congress for five days for repeatedly causing “grave disorder” in the lower House.

It was a U-tun by the government on the land acquisition bill as  a Parliamentary committee today approved changes in the Modi government’s bill including on the consent clause, that will restore the UPA law.

The Indian Meteorological Department yesterday said that India’s southwest monsoon in the remaining two months of the four-month season, that is in August and September, is expected to be below normal at 84 per cent of the long-period average (LPA) as El Niño weather conditions have strengthened in the past few months.

OUTLOOK

Today morning Asian markets are trading mixed with modest changes and SGX Nifty is suggesting a flattish start for our market.

Key event to watch out today would be RBI monetary policy review. It is widely expected that the apex bank will stay put on rates given the uncertainty over monsoon and the hiccup in food prices in July. More importantly markets would want to hear RBI Governor's take on GDP and CPI forecasts to gauge the tone of the policy.

As mentioned yesterday, 8655, the top made on 23rd July, continues to be the next target upside target to eye. Immediate support on the hourly chart has moved up to 8430, with the stop loss of which trading longs should be held on to.

Bharti Airtel will report its quarterly earnings today.