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Good Morning!
India is in recession, and it will be confirmed officially in three months hence. The first confirmation came in Q1 GDP data that showed a 24% contraction, which analysts and economists say would be followed by a 8-10 per cent shrinkage in Q2. It would be the first instance after 40 years that the economy will be contracting for two consecutive quarters to fulfil the definition of an economic recession. India last experienced such a situation in 1979-80 amid a severe drought across the country and the Iranian Revolution that doubled oil prices. Prior to that, India had five recessions in the two-and-a-half decades from 1955 – in 1957-58, 1965-66, 1966-67, 1972-73 and 1979-80.
MARKET CUES: Where do we stand >>>
Ambani kept Amazon at bay in Future deal… By proposing to acquire the retail assets of Future Group (and not Future companies), the Mukesh Ambani-led Reliance Industries (RIL) has ensured that rival Amazon does not become its shareholder. Had the deal involved the merger of Future Enterprises (excluding non-retail assets), then Amazon would have got a stake in the two outfits. But with the proposed deal structure where RIL acquires Future Group's retail assets, and not its companies, the former has ensured that competitor Amazon is not its shareholder, said Bank of America Securities. Read More
FPIs made it a bountiful Aug for D-Street… Bucking the trend of selling in most emerging market equities, foreign fund managers have been buying in India in August. The chief reason is the Sensex that was rising through the month, prompting mainly ETFs to buy in the domestic market. Official data showed that in August, net inflow from foreign portfolio investors was more than Rs 47,000 crore — a record in over a decade. Read More
Apple, Tesla on a high post stock splits… Apple and Tesla shares rose to new heights Monday after their stock splits took effect, extending their meteoric rallies this year. Apple added $4.23, or 3.4%, to $129.04 after the tech giant's shares began trading following a 4-for-1 split. Tesla shares jumped $55.64, or 13%, to $498.32 after the electric-vehicle maker's 5-for-1 split. Both stocks closed at records. Analysts, however, said the stocks could be in for a correction. Read MOre
India sees record GDP contraction… India's economy posted its steepest contraction on record in the April-June quarter as the strict lockdowns stalled economic activity, shut out consumption and investment, and led to job and income losses. Asia's third largest economy was already faltering when the pandemic struck. NSO data on Monday showed GDP in April-June slumped 23.9% compared with a 3.1% growth in March quarter. Among major economies, India's contraction was the sharpest. China, after posting a contraction in Jan-March, has recovered with a 3.2% growth in April-June. Globally, India is close to UK's 20.4% contraction in the second quarter. Read MOre
Sebi margin rule comes into force… As Sebi rejected stock brokers' demand to postpone the new norms on margin pledge and repledge process, the new norms comes into force from Tuesday, under which investors, willing to provide shares as margins for trading, will have to pledge a portion of their holdings in favour of the brokers with depositories — Central Depository Services or National Securities Depository. Read More
In 4 months, fiscal deficit tops full-year estimate… The Centre's fiscal deficit topped the full-year estimate within four months of the financial year, indicating the stress on government finances and the limit it imposes on the Narendra Modi administration, while pumping in money to revive the Indian economy, which reported its worst quarterly performance. At the end of July, fiscal deficit was estimated at Rs 8.2 lakh crore, which was 103% of the Budget target, data released by the Controller General of Accounts on Monday showed. Read More
Core sectors contract for fifth month… The eight core sectors contracted for the fifth month in a row in July, dragged down by a sharp contraction in steel, cement, refinery products and natural gas. But the pace of decline narrowed during the month. The key sector — which spans coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity — accounts for nearly 41% of the index of industrial production and is a key influence on the outcome of factory output data. Read More
Meanwhile...
Fresh escalation on China border... In yet another sharp escalation in the ongoing military confrontation in eastern Ladakh since early-May, Indian soldiers thwarted an attempt by Chinese troops to occupy some heights near the southern bank of Pangong Tso lake on Saturday night. The "provocative military movements" by PLA aimed at seizing the heights in the Chushul sector, broadly between Pangong Tso and Spanggur Gap, were physically blocked by the swift deployment of Indian troops in the region at an altitude of around 15,000 feet. Read More
MARKET CUES: Where do we stand >>>
 | Nifty futures on the Singapore Exchange traded 70 points higher at 7 am (IST) this morning, signaling a solid rebound ahead for Dalal Street after Monday's big slump. |
| On Monday, Nifty50 formed a Long Bearish candle on the daily chart as it eclipsed all the higher high-low formations of last six sessions. Analysts said the short term trend of the index has turned negative |
| Asian stocks drifted lower at the start of a new month after a retreat in most US equities even though technology shares extended gains. Australian shares underperformed, down more than 2%. Stocks edged lower in Japan and fluctuated in Hong Kong and China. South Korean equities advanced |
| The Dow led US stock losses overnight after its components were revamped, with Microsoft and Walmart slumping on concern China could block a possible sale of the video app TikTok. Apple surge as the stock split 4-for-1 lifted the Nasdaq100 past 12,000 for the first time. S&P 500 posts its longest monthly winning streak since 2018 |
| Oil prices rose in early trade on Tuesday, reversing overnight losses, as investors shifted to risk assets and out of the safe-haven US dollar. Brent futures climbed 27 cents, or 0.6%, to $45.55 a barrel, while WTI crude futures rose 21 cents, or 0.5%, to $42.82 |
| The rupee stalled its three-session winning run on Monday, sliding 21 paise to 73.60 against the US dollar as fresh tensions along the India-China border dented forex market sentiment |
| The dollar languished near multi-year lows against most major currencies on Tuesday. The Australian dollar traded near a two-year high against the greenback. The yen fell 0.5% to trade at 105.78 to the dollar. The euro was up 0.1%, after matching a two-year high. |
| Gold and silver prices gained in Indian markets on Monday, following positive trends in global rates. On MCX, October gold futures rose 0.1% to Rs 51504 per 10 gm while September silver futures gained 0.4% to Rs 69,135. In international markets, gold rose 0.2% on Tuesday to $1,972 an ounce. |
| LOOK WHO'S |  |
Ambani kept Amazon at bay in Future deal… By proposing to acquire the retail assets of Future Group (and not Future companies), the Mukesh Ambani-led Reliance Industries (RIL) has ensured that rival Amazon does not become its shareholder. Had the deal involved the merger of Future Enterprises (excluding non-retail assets), then Amazon would have got a stake in the two outfits. But with the proposed deal structure where RIL acquires Future Group's retail assets, and not its companies, the former has ensured that competitor Amazon is not its shareholder, said Bank of America Securities. Read More
FPIs made it a bountiful Aug for D-Street… Bucking the trend of selling in most emerging market equities, foreign fund managers have been buying in India in August. The chief reason is the Sensex that was rising through the month, prompting mainly ETFs to buy in the domestic market. Official data showed that in August, net inflow from foreign portfolio investors was more than Rs 47,000 crore — a record in over a decade. Read More
Apple, Tesla on a high post stock splits… Apple and Tesla shares rose to new heights Monday after their stock splits took effect, extending their meteoric rallies this year. Apple added $4.23, or 3.4%, to $129.04 after the tech giant's shares began trading following a 4-for-1 split. Tesla shares jumped $55.64, or 13%, to $498.32 after the electric-vehicle maker's 5-for-1 split. Both stocks closed at records. Analysts, however, said the stocks could be in for a correction. Read MOre
| AND WHO'S |  |
India sees record GDP contraction… India's economy posted its steepest contraction on record in the April-June quarter as the strict lockdowns stalled economic activity, shut out consumption and investment, and led to job and income losses. Asia's third largest economy was already faltering when the pandemic struck. NSO data on Monday showed GDP in April-June slumped 23.9% compared with a 3.1% growth in March quarter. Among major economies, India's contraction was the sharpest. China, after posting a contraction in Jan-March, has recovered with a 3.2% growth in April-June. Globally, India is close to UK's 20.4% contraction in the second quarter. Read MOre
Sebi margin rule comes into force… As Sebi rejected stock brokers' demand to postpone the new norms on margin pledge and repledge process, the new norms comes into force from Tuesday, under which investors, willing to provide shares as margins for trading, will have to pledge a portion of their holdings in favour of the brokers with depositories — Central Depository Services or National Securities Depository. Read More
In 4 months, fiscal deficit tops full-year estimate… The Centre's fiscal deficit topped the full-year estimate within four months of the financial year, indicating the stress on government finances and the limit it imposes on the Narendra Modi administration, while pumping in money to revive the Indian economy, which reported its worst quarterly performance. At the end of July, fiscal deficit was estimated at Rs 8.2 lakh crore, which was 103% of the Budget target, data released by the Controller General of Accounts on Monday showed. Read More
Core sectors contract for fifth month… The eight core sectors contracted for the fifth month in a row in July, dragged down by a sharp contraction in steel, cement, refinery products and natural gas. But the pace of decline narrowed during the month. The key sector — which spans coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity — accounts for nearly 41% of the index of industrial production and is a key influence on the outcome of factory output data. Read More
Meanwhile...
Fresh escalation on China border... In yet another sharp escalation in the ongoing military confrontation in eastern Ladakh since early-May, Indian soldiers thwarted an attempt by Chinese troops to occupy some heights near the southern bank of Pangong Tso lake on Saturday night. The "provocative military movements" by PLA aimed at seizing the heights in the Chushul sector, broadly between Pangong Tso and Spanggur Gap, were physically blocked by the swift deployment of Indian troops in the region at an altitude of around 15,000 feet. Read More
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