Home >Markets >Stock Markets >Markets may stay rangebound; HDFC, PNB, Tata Motors in focus

MUMBAI: Markets are likely to stay rangebound on Friday while trends in SGX Nifty indicate a flat opening. The BSE Sensex ended at 52,586.84, down 66.23 points or 0.13%. The Nifty was at 15,763.05, down 15.40 points or 0.10%.

Asian shares face another tough week as Beijing's regulatory crackdown fans fears about China's economy, though upbeat economic data in the United States and Europe and solid corporate earnings put a floor under their markets.

China's woes were underlined over the weekend by a survey showing factory activity grew at the slowest pace in 17 months amid rising costs and extreme weather.

In contrast, Europe's economic recovery outpaced all expectations last quarter, while US consumers spent with abandon in June as coronavirus restrictions eased, a trend likely to ensure a strong payrolls report at the end of this week.

About 89% of the nearly 300 recent US earnings reports have beaten analysts' profit estimates. Earnings are now expected to have climbed 89.8% in the second quarter, versus forecasts of 65.4% at the start of July.

There was also the prospect of more fiscal stimulus ahead as US Senators worked to finalise a sweeping $1 trillion infrastructure plan that could pass this week.

The optimism was apparent in early trading with S&P 500 futures rising 0.4% and Nasdaq futures 0.3%.

Asia has fared so well, with China's crackdown on the tech and education sectors hammering stocks, while the spread of the Delta variant of the coronavirus in the region hit growth.

MSCI's broadest index of Asia-Pacific shares outside Japan was a just fraction firmer early Monday, having hit its low for the year so far last week.

Japan's Nikkei bounced back 1.1%, but that was from its lowest since January. Investors were anxiously waiting to see how Chinese blue chips fared after that index shed 5.5% last week.

Among key companies HDFC, Punjab National Bank, Varun Beverages, Emami, Castrol India, RBL Bank, CG Power and Industrial Solutions and Shree Renuka Sugars will announce June quarterly earnings today.

Videocon Group promoter Venugopal Dhoot approached an appeals court against a June insolvency tribunal order that cleared the resolution plan of Vedanta group firm Twin Star Technologies. Dhoot listed three respondents in his petition filed at the National Company Law Appellate Tribunal (NCLAT) on Saturday—Videocon Group resolution professional Abhijit Guhathakurta, the committee of creditors (CoC) and Twin Star Technologies.

India’s leading passenger vehicle manufacturers increased production and dispatches to dealerships in July, compared to the preceding month, as states eased lockdown restrictions further following a sustained decline in covid-19 cases. Most dealerships resumed operations across India and manufacturers moved in to fill the inventory levels.

Tata Motors Ltd, the country’s largest automaker by revenue, will stick to its plan to turn debt-free by FY24 despite its businesses being adversely impacted by the pandemic, chairman Natarajan Chandrasekaran said on Friday.

Equity valuations elsewhere have been supported by a steady decline in bond yields, with yields on US 10-year notes falling for five weeks in a row to reach 1.23%.

That drop combined with surprisingly strong EU economic data out on Friday to lift the euro to $1.1866 , away from its July low of $1.1750.

The dollar has also drifted off to 109.67 yen, from its recent top of 110.58, but has support around 109.35. As a result, the dollar index has eased to 92.110, from a July peak of 93.194.

The drop in bond yields and the dollar gave gold a fillip last week but it again faltered at resistance around $1,832 and was last trading flat at $1,812 an ounce.

Oil prices eased a little on Monday, but that comes after four straight months of gains amid expectations demand will remain strong and supply constrained.

Brent was last down 29 cents at $75.12 a barrel, while U.S. crude lost 23 cents to $73.72.

(Reuters contributed to the story)

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