Markets likely to be under pressure; IT stocks, Yes Bank in focus2 min read . Updated: 14 Oct 2020, 08:31 AM IST
- Asian equities slipped on Wednesday as halted covid-19 vaccine trials and an elusive US stimulus agreement weighed on investor sentiment
MUMBAI: Markets are likely to be under pressure on Wednesday. Trends in SGX Nifty indicate a weak opening forIndian benchmark indices. On Tuesday, The BSE Sensex ended at 40,625.51, adding 31.71 points or 0.08%. The Nifty closed at 11,934.50, up 3.55 points or 0.03%.
Asian equities slipped on Wednesday as halted covid-19 vaccine trials and an elusive US stimulus agreement weighed on investor sentiment, while the dollar rose from Tuesday’s three-week low as demand firmed for safe-haven assets.
Hopes for the passage of a new coronavirus relief package faded as US House Speaker Nancy Pelosi rejected a $1.8 trillion coronavirus relief proposal from the White House, saying it “falls significantly short of what this pandemic and deep recession demand."
Sentiment in European and US equities defied earlier resilience in Asia, where Chinese shares got a lift from data released on Tuesday that showed exports rising 9.9% in September and imports swinging to a 13.2% gain, versus a 2.1% drop in August.
The data signaled a rebound in the world’s second-largest economy but was mostly brushed aside by world stock and bond markets. Still, it boosted oil prices as investors hoped for a slow recovery in energy demand.
Back home, the International Monetary Fund (IMF) on Tuesday forecast India’s gross domestic product (GDP) to contract 10.3% in FY21, in a downward revision of its June forecast of a 4.5% drop, reflecting the worse-than-anticipated contraction in economic activity in the fiscal first quarter due to the nationwide lockdown, as well as the rapidly-spreading pandemic.
Wipro shares will be in focus today as the board of the IT services company approved a buyback proposal worth ₹9,500 crore. Wipro plans to purchase of 23.75 crore shares at ₹400 per equity share. It reported 3.4% drop in its consolidated net profit for September quarter at ₹2,466 crore.
Infosys, which will announce its September quarter results today, will be eyed.
Yes Bank Ltd has classified Cox & Kings, its non-bank lending unit Cox & Kings Financial Services, and related entity Ezeego One Travel and Tours, which have total loans of ₹1,862 crore, as wilful defaulters.
Meanwhile, the Indian government is examining the decision of an arbitration panel last month favouring Vodafone Group Plc in a tax dispute, given its implications for India’s sovereign rights of taxation, according to a Mint report.
In commodities, China's trade improvement boosted US crude CLc1, which recently fell 0.22% to $40.11 per barrel. Brent was flat at $42.45.
Spot gold prices closed up 0.05% to $1,891.61 an ounce.
The Japanese yen was flat versus the greenback at 105.47 per dollar, while sterling was last trading at $1.2932, down 0.02% on the day.
(Reuters contributed to the story)