Pre Session- Gloom may continue to grip D-Street
12/08/2015
Indian equity benchmarks are set to post losses for a fourth day on the trot as traders stick to a cautious approach ahead of key economic indicators while a global sell-off amidst a China currency devaluation also curbs risk taking appetite. Marking a third straight finish in the red, the 30-share Sensex on Tuesday plunged 235.63 points or 0.84 per cent to close at 27,866.09 as China’s currency devaluation move sparked a rout in emerging market currencies, with the rupee also taking a hit, while shares of the country’s biggest public sector lender, the SBI tanked nearly 5 per cent as its Q1 report card led to renewed asset quality concerns. Worries that the ongoing logjam in the Parliament may block the path of key reforms also weighed as the government tabled the GST bill but uproar by the opposition in the Rajya Sabha led to the adjournment of the House for the day. With only two days left for the Parliament’s monsoon session, the key GST reform is set to face further delay. The focus on Wednesday will be on July consumer prices and June industrial output data which will offer fresh cues over the health of Asia’s third biggest economy. Industrial output in India may have expanded 3.3 per cent, year on year in June 2015, up from an annual 2.7 per cent rise while consumer inflation likely cooled to 4.4 per cent in July 2015 from 5.4 per cent in June 2015, paving the way for further rate cuts in the ongoing fiscal. Shares of Coal India maybe in focus today as it reports its June quarter earnings numbers while Tata Steel may witness buying interest after the company in after market hours, reported a two fold increase in Q1 profit at Rs 763 crore, bettering street estimates. Against the backdrop of steep losses in Asian stocks and a bearish finish at Wall Street overnight, coupled with weakness in the SGX CNX Nifty Index futures for August delivery which fell 0.65 per cent or 54.50 points at 8,433 at 10:41 am Singapore time, Dalal Street is set for a gap down opening today.
Asian stocks plummeted on Wednesday after China devalued its currency for a second straight day, sparking fears of an Asian currency war, while raising alarm bells over the health of the world’s second biggest economy. All three of the Shanghai Composite, Hang Seng and Nikkei 225 tanked more than 1 per cent as the People’s Bank of China cut its yuan’s daily fixing rate by 1.6 per cent to 6.3306 per dollar, the lowest level since 2012, putting the Yuan on course for its worst loss in 21 years. Investors also awaited reports on industrial output and retail sales in China. The China yuan devaluation move also sparked a rout at Wall Street on Tuesday amid concerns that the move may curb Chinese demand for energy and metals, taking toll on commodity shares.
