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Indian equities inch higher as US-China agree to resume trade talks

  • Reliance Industries shares rose ahead of the commercial launch of its Jio Fiber broadband services

Indian stock markets opened marginally higher on Thursday tracking global equities which rose after US and China agree to resume trade talks in October. At 9.21 am, the benchmark Sensex rose 0.31% or 115.31 points to 36840.05 points, while the Nifty rose 0.53% to 10906.85 points.

According to a Jefferies India report, the government’s announcements to boost the economy have brought little cheer but hopes remain that it would find a way to alleviate liquidity and real estate stress soon and revive growth that fell to a six-year low in April-June. Faltering tax collections leave little fiscal space for meaningful stimulus, despite the large RBI dividend. “With transmission of rate cuts lagging too, earnings slipping and valuations extended, we stay defensive," it said.

Among US markets, Dow Jones and S&P 500 closed 1% higher each. In Europe, FTSE100, Dax and CAC 40 were up 0.6%, 1% and 1.2%, respectively. In Asia, Nikkei was up 2.3% and Hang Seng rose 0.5%.

According to reports, the US-China talks will be held in Washington and follows a phone call between China’s Vice Premier Liu He, US Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer.

In India, investors await plans and offers, part of the Jio Fiber broadband launch which will be announced on Thursday. Analysts expect Jio Fiber subscribers to get free set-top-box and free installation and complementary plan of 1-2 months under the launch offer. Reliance Industries Ltd shares rose 0.6%. Rival Bharti Airtel Ltd fell 0.6%.

"After a terrible Tuesday, Nifty showed some signs of recovery in yesterday’s trading session as the index was highly oversold and some consolidation was needed. Tracking its Asian peers, we shall see some pullback in stock markets today. Overall, picture is still gloomier for the Indian equity markets as FII’s continue to remain sellers and have withdrawn $4.65 billion worth capital so far since the month of July. Also given the weak GDP print of 5% it seems difficult to attract investors to make up for the losses in portfolio flows," according to CR Forex Advisors.

Oil and Natural Gas Corp Ltd rose 4.5% after global crude oil gained 4% overnight as China's announcement that it would send trade negotiators to the US buoyed markets.

In the year so far, the Sensex has risen 2.2%. Foreign investors have bought nearly $6.77 billion in Indian equities and $4.50 billion in debt.

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