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Photo: PTI
Photo: PTI

Indian equities seen rangebound; Reliance, defence stocks in focus

  • Global equities have rallied hard since hitting a bottom in March on central bank bazooka and government largess around the world, although rising coronavirus cases and deaths in many countries have tempered investor enthusiasm recently

Indian stock markets are likely to be rangebound on Monday while trends in the SGX Nifty suggest a flat opening for benchmark indices. In the previous trading session, the BSE Sensex ended at 38,040.57, up 15.12 points or 0.04% and the 50-share index Nifty closed at 11,214.05, up 13.90 points or 0.12%.

Asian shares started cautiously in the early deals as investors kept one eye on flaring tensions between the United States and China and another eye on US fiscal stimulus after talks between the White House and Democrat lawmakers broke down.

Trading is expected to be light with Japanese and Singaporean markets closed for public holidays.

Global equities have rallied hard since hitting a bottom in March on central bank bazooka and government largess around the world, although rising coronavirus cases and deaths in many countries have tempered investor enthusiasm recently.

Also weighing on sentiment is uncertainty over US fiscal stimulus after President Donald Trump signed a series of executive orders to extend unemployment benefits after talks with Congress broke down. The orders would provide an extra $400 per week in unemployment payments, less than the $600 per week passed earlier in the crisis.

Defence stocks will be in focus after a government decision. India will stop importing 101 items of military equipment in an effort to boost domestic defence production, defence minister Rajnath Singh said on Sunday.Singh said the move follows Indian Prime Minister Narendra Modi's call for defence self-reliance.

The Saudi Arabian Oil Co. (Saudi Aramco), the world’s largest crude oil producer, said it’s still working on a deal to buy a $15 billion stake in Reliance Industries Ltd’s (RIL) oil-to-chemicals business, Bloomberg reported.

Hinduja Leyland Finance Ltd (HLFL), the captive financing arm of commercial vehicle maker Ashok Leyland, is in talks with potential investors to raise up to $100 million in primary equity, according to a Mint report.

Among major companies to announce their June quarter earnings today are Titan Company, Power Grid, IPCA Labs, Bank of Baroda, AstraZeneca Pharma, Ujjivan Financial Services, Equitas Holdings, Aban Offshore and Coffee Day Enterprises.

Medicine sales in India were almost flat in July on a year-on-year basis although it has recovered since the March to May period when the country was under a strict lockdown, showed data from market researcher AIOCD-AWACS.

In currencies, the dollar eased on the safe haven Japanese yen to 105.85 while the risk sensitive Aussie dollar nursed its losses after falling 1.1% on Friday.

The British pound was a tad lower at $1.3057 after hitting a five-month high of $1.3185 last week. The euro paused at $1.1789 to hover near its highest since May 2018.

That left the dollar index at 93.367, having struggled on a slippery slope since late June.

On the data front, China releases inflation figures later in the day and monthly activity indicators on Friday.

In commodities, gold held on to gains at $2,030 an ounce after hitting an all-time high of $2,072.5 last week.

Oil prices were higher with Brent crude rising 36 cents to $44.76 a barrel. U.S. crude added 43 cents to $41.65.

(Reuters contributed to the story)

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