Gift Nifty Signals Flat Open for Sensex, Nifty on Tuesday

Mumbai, October 12: Indian equity markets are set for a flat to marginally positive open on Tuesday. The indication comes after the Sensex and Nifty 50 gave up early gains and ended lower on Monday, as investors stayed cautious over foreign fund outflows, elevated energy prices and the Reserve Bank of India’s (RBI) tighter policy stance. Crude oil, the rupee and global cues remain the key triggers for the opening session.

Gift Nifty Levels

Gift Nifty futures for the near-month October 27 contract were trading at 22,383.50, up 13.00 points or 0.06 per cent, as of about 4 pm IST on Monday. That is 20.15 points above the Nifty 50’s closing level of 22,363.35, which points to an opening a shade higher than Monday’s close. The contract opened at 22,648 and touched a high of 22,699.50 before sliding to a low of 22,359.50, a fall of 340 points from the peak. The November 23 contract was quoted at 22,457.00, unchanged.

Asian Stocks

Asian markets ended mixed on Monday, with heavy selling in North Asia. South Korea’s Kospi plunged 3.65 per cent, or 241.69 points, to 6,384.24, China’s Shenzhen Component lost 2.03 per cent to 12,384.87 and Shanghai fell 0.43 per cent to 3,797.24. Thailand’s SET Index slipped 0.37 per cent to 1,571.74, while the SGX-CNBC China Growth index shed 0.97 per cent to 1,445.87. On the positive side, Australia’s ASX 200 rose 0.76 per cent to 8,783.20, Malaysia gained 0.59 per cent, New Zealand’s NZX 50 added 0.57 per cent and Hong Kong’s Hang Seng advanced 0.25 per cent to 24,271.20.

Oil Prices

Crude oil prices reversed their early losses on Monday, with Brent crude at $105.80 a barrel, up $1.08 or 1.03 per cent, and West Texas Intermediate (WTI) at $92.87, up $0.98 or 1.07 per cent, according to OilPrice.com data delayed by 11 minutes. Earlier in the day, Brent futures for December delivery had fallen 1.65 per cent to $102.99 and WTI futures for November had declined 1.92 per cent to $90.09 after US President Donald Trump declared an “energy ceasefire” between Russia and Ukraine. Trump also said Russia will supply more than 4 million tons of diesel to the global market under a deal with President Vladimir Putin. Iran’s Foreign Minister Abbas Araghchi, meanwhile, called his Saudi counterpart Faisal bin Farhan after Houthi attacks on the kingdom, keeping Middle East risks in view.

RBI Curbs

The RBI on Saturday unveiled fresh measures to shore up the rupee, which has fallen more than 7 per cent this year on surging oil prices and global bond yields. The central bank has opened a special window, effective Monday, to meet the daily dollar requirements of Indian Oil Corporation (IOC), Hindustan Petroleum Corporation (HINDPETRO) and Bharat Petroleum Corporation (BPCL), taking oil companies’ purchases away from the spot market. It has tightened rules governing foreign-exchange hedging. ANZ Bank’s FX strategist Dhiraj Nim said removing one of the largest sources of dollar demand should help reduce volatility, but will show up in a depletion of reserves. The rupee strengthened about 0.6 per cent in the non-deliverable forward market after the announcement and recovered at the start of Monday’s session, but the gains did not translate into sustained buying in equities as foreign outflow worries persisted.

Monday’s Close

The Sensex and Nifty 50 ended lower on Monday, reversing early gains as selling in information technology, fast-moving consumer goods and financial stocks weighed on sentiment, a session after Friday’s rebound that had ended a prolonged losing streak. The Sensex fell 547.65 points, or 0.76 per cent, to close at 71,924.68, while the Nifty 50 declined 157.10 points, or 0.70 per cent, to settle at 22,363.35. Tech Mahindra (TECHM), ITC (ITC), Larsen & Toubro (LT), Hindalco Industries (HINDALCO) and Hindustan Unilever (HINDUNILVR) were the biggest Nifty losers, while Dr Reddy’s Laboratories (DRREDDY), Bajaj Auto (BAJAJ-AUTO), Bharat Electronics (BEL), BSE Ltd (BSE) and Tata Motors Passenger Vehicles (TMPV) featured among the top gainers. Market breadth was balanced, with 2,187 stocks advancing, 2,066 declining and 235 unchanged.

Sources:

• Gift Nifty and NSE data
• BSE
• Reuters
• CNBC
• OilPrice.com