A shaky US dollar is triggering enough speculation as to what it may do to equities, even as gold starts benefitting from its inverse relationship with the greenback. Some say while a weaker dollar would boost US competitiveness, and thus help US stocks, others argue that it would reflect on deeper distress in the US economy, turning the markets cautions. Some analysts say the dollar and stocks have exhibited a slight negative correlation over the long term, which should be good news for Wall Street. Yet others say a weak dollar might send off a larger chunk of portfolio investors' money out of the US, boosting equities in stronger emerging markets and other asset classes.
MARKET CUES: Where do we stand >>>  | Nifty futures on the Singapore Exchange traded 41 points higher at 7 am (IST) this morning, in signs of a positiive opening ahead for Dalal Street. |
| On Friday, Nifty50 staged a strong intraday recovery, but could not close above the psychologically important 11,200 mark. It, however, formed bullish candles on both daily and weekly charts. |
| Stocks traded mixed as investors weighed simmering Sino-American tensions against signs the virus spread in the US may be slowing. Japanese shares fell, catching up to a two-day slide in global equities when Tokyo was closed for a holiday last week. Stocks in Hong Kong, Seoul and Australia edged higher |
| S&P500 futures ticked up this morning. US stocks had closed lower on Friday as the technology-heavy Nasdaq Composite notched its first back-to-back decline since mid-May, as investors fretted about rising Sino-American tensions and a lack of progress on another fiscal stimulus bill in Washington. Dow declined 182.44 points, or 0.7%; the S&P500 gave up 20.03 points, or 0.6%, and the Nasdaq 98.24 points or 0.9% |
| The rupee slipped 8 paise and settled at 74.83 against the US dollar on Friday as weak domestic equities and escalating tensions between the US and China weighed on investor sentiment. |
| The dollar extended its recent slide, while the yen rose 0.3% as did the offshore yuan. The euro slipped 0.3%. |
| Oil prices edged down as rising coronavirus cases and tensions between the US and China pushed investors toward safe-haven assets. Brent dipped 10 cents, or 0.2%, to $43.24 a barrel while WTI crude fell by 5 cents to $41.24 |
| Gold prices jumped to Rs 51,160 per 10 gm, while silver climbed to Rs 61,210 per kg. On Friday, August gold futures climbed to Rs 51,035 per on Friday, and Silver September futures rose to Rs 61,223 a kg. In global markets gold futures rose to a record high this morning and traded above $1,900 an ounce. |
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RIL valued in line with tech giants… Investors are increasingly considering RIL as a technology bet similar to Apple and Google than a plain-vanilla energy play. The Mukesh Ambani-controlled conglomerate may still be some distance away from getting mentioned in the same breath as the global technology giants, but various indicators suggest the company has managed to wriggle out of the traditionally conservative valuation band that global energy companies have remained in, and moved into the premium zone. The stock has risen 44% since the beginning of the year and a whopping 140% since March 20.
Read More Gold loan users' chance to settle dues… A record-high price is giving an opportunity for gold loan borrowers to sell off their pledged gold and settle the loan or opt for a foreclosure and borrow more for the same gram of gold. According to RBI regulations, up to 75% of the value of the gold can be lent. Rising gold prices have meant that loan-to-value is higher by Rs 500 per gm on the same jewellery. The LTV has risen from Rs 2,850 per gm of 22 carat gold before the lockdownto Rs 3,350 per gm now.
Read More Puri sells 95% stake in HDFC Bank… HDFC Bank Managing Director and Chief Executive Aditya Puri sold 95 per cent of his stake in the country's largest private sector lender last week, according to insider trading data published by stock exchanges on Saturday. Puri sold 7.42 million shares worth Rs 843 crore between July 21 and July 24. Before the latest transaction, he held 7.796 million shares, or 0.14% of the bank's equity capital. Puri received 682,000 employee stock ownership plans (Esops) in the previous financial year.
Read More RIL nears deal with Futures group… Reliance Industries is in late-stage talks to acquire the retail business of Future Group as it moves to bolster its brick-and-mortar play in Asia's third-largest economy. The two have ironed out their differences over certain terms and conditions and a deal will be announced soon, said people familiar with the negotiations. Future's interests are spread across various entities, including six listed companies. RIL will acquire the retail, supply-chain and related businesses of Future, which will mark the end of founder Kishore Biyani's play in India's modern retail, an industry he pioneered.
Read More e-commerce growth set to double… India's e-commerce industry is expected to reach $99 billion in size when online commerce penetration will more than double to almost 11%. The growth rate for the industry in India, for the next four years, would surpass the same of established economies like the US, China, the UK and Brazil, according to Goldman Sachs's review of e-commerce markets. E-commerce is expected to register a growth of over 18% for the current year but estimates for 2021 and 2022 show a year-on-year growth rate of over 33% and 28% respectively.
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FII long liquidation signals caution… Foreign portfolio investors' liquidation of long index futures to the tune of 18,783 contracts on Friday bodes caution for the market going forward. Though they have been net buyers of a provisional Rs 2,476 crore of shares this month, Friday's liquidation of index futures suggests they have taken substantial profits off the table. From being net long 21,432 contracts in Index futures — Nifty and Bank Nifty — a day earlier, they ended Friday being net long a mere 2,649 contracts.
Read More PCR signals market is overbought … A key indicator in the equity derivatives segment is pointing to an overbought market after a rally of 49% in the India's benchmark indices from their March lows. The PCR or put call ratio touched 1.87 on July 21. On Friday, the ratio stood at 1.73 — still near extreme levels — which indicates complacency among participants at the higher levels. Put call ratio is a popular technical indicator. Analysts said a higher PCR is usually positive, but a much higher PCR is giving signal that the market is overbought.
Read More Acharya warns against deficit monetisation… Former RBI deputy governor Viral Acharya has cautioned against monetisation of the fiscal deficit, warning that it could trigger runaway inflation and external sector stress. Acharya's warning comes at a time when there is a growing chorus for the government to provide an economic stimulus by borrowing money directly from the RBI. According to Acharya, for a sustained recovery, there is a need to clean up the financial system.
Read More Huawei slashes India revenue target… Chinese telecom equipment maker Huawei has slashed its India revenue target for 2020 by up to 50% and is laying off 60-70% of staff, excluding those in research and development and the Global Service Centre, said several persons aware of the matter. The move comes as the company battles plunging demand for its equipment and services amid border hostilities between China and India. India has joined the US and UK in flagging security concerns over Huawei's links to the Chinese government.
Read More Meanwhile... 275 more Chinese apps face India ban… India has drawn up a list of 275 Chinese apps that it will examine for any violation of national security and user privacy, signalling heightened scrutiny and the possibility of more Chinese internet companies being banned in the country, according to people aware of the developments. This follows the high-profile ban of 59 Chinese apps last month, including short video app TikTok, amid simmering geopolitical tensions between the two Asian giants.
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