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Market Movers: Trade war escalates; Lens on 80:20 gold scheme; Dollar buoyant and oil steady

A lowdown on top macro triggers that may move market on Friday.

, ETMarkets.com|
Updated: Aug 24, 2018, 08.13 AM IST
Here’s a lowdown on top macro triggers that may move market on Friday. This report was compiled from agency feeds.

Trade War Ratchets Up, Trump Warns of Market Meltdown if Impeached
US and Chinese officials ended two days of talks on Thursday with no major breakthrough. Instead, trade war escalated as US and China implemented 25% tariffs on $16 billion worth of each other's goods. The latest trade escalation came as officials from both the countries met for tariff negotiations in Washington. So far, both the countries have taxed each other's goods worth $100 billion in total. Meanwhile, US President Donald Trump warned Thursday the US economy would collapse if he were impeached, as legal chaos roiling the White House has experts saying his presidency is under threat.

Dollar Buoyant, Oil Steady
The dollar was buoyant after ending a long losing run ahead of a speech by Federal Reserve Chairman Jerome Powell later on Friday. The annual Fed conference in Jackson Hole, Wyoming has begun. Fed Chairman Jerome Powell is widely expected to signal more rate hikes ahead. President Donald Trump earlier this week said he was “not thrilled” by rate increases. Meanwhile, oil prices stabilised, with a big draw in US crude inventories neutralised by lingering trade war concerns. Brent crude oil futures LCOc1 were at $74.50 per barrel, up 7 cents from their last close. US WTI crude futures CLc1 were at $67.93 per barrel, up 10 cents.

80:20 Gold Scheme Under Scanner
The contentious 80:20 gold import scheme is under the scrutiny of investigative agencies over accusations that a handful of private parties benefited illegally from tweaks to the programme toward the end of the Congress-led United Progressive Alliance (UPA) government’s second term (2009-14). Investigative agencies have gathered new evidence indicating alleged irregularities, reports ET quoting people with knowledge of the matter.

NCLT Removes Key Hurdle to Liquidation Process
In a landmark judgement, the bankruptcy court has sought to remove legal impediments to liquidation or loan-recovery proceedings by setting aside property attachment claims of state-run utilities or operational creditors that have not been paid their dues by bankrupt private-sector borrowers. the National Company Law Tribunal’s (NCLT) Allahabad bench said that district authorities can’t prevent the sale of land of bankrupt borrower Raman Ispat for its failure to pay outstanding power bills.

Standard Green Norms for 25 Industries
The government has imposed standard conditions for as many as 25 sectors like steel, coal and oil, seeking environment clearance (EC) for expansion of existing projects or new projects. The 25 sectors include iron, steel, cement, coal, petroleum refineries industry, paper and pulp industries, hydro-electric projects, industrial estates, among others.

All EVs to Get Subsidy Support
An inter-ministerial panel yesterday finalised the roadmap for the second phase of FAME India scheme with an outlay of around Rs 5,500 crore spanning over five years and subsidy support for all types of electric vehicles, official sources said. The panel decided to offer subsidy to all categories of electric vehicles, including two-wheelers, three-wheelers and four-wheelers, to promote green vehicles and check pollution.

Cheap Power
Tata Power and ICICI Bank-backed Resurgent Power, Adani Power, JSW Energy and Vedanta Plc are eyeing a large chunk of stressed power assets at half of the projects’ cost as lenders rush to close deals ahead of August 27 deadline.
good bargains


  • Reliance Industries, which is in a neck and neck fight with TCS in market capitalisation (m-cap) race, on Thursday became the first listed Indian company to hit Rs 8 lakh crore in market valuation.
  • The Indian economy is largely resilient to external pressures and is expected to grow around 7.5% in 2018 and 2019, Moody's Investors Service said. In its Global Macro Outlook for 2018-19, Moody’s said growth is supported by strong urban and rural demand and improved industrial activity.
  • The food ministry has extended the deadline for exporting 2 million tonne of sugar by three months to December as only a fourth of it has been shipped so far.
  • Lenders of Ruchi Soya have approved the Rs 6,000 crore bid of Adani Wimar to acquire the debt-ridden edible oil firm, sources said. Adani Wilmar and Baba Ramdev's Patanjali group have been engaged in a long-drawn battle to take over Ruchi Soya.

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Rupee Down: The rupee once again slipped below 70 level against the US dollar on Thursday. It ended just a paisa higher at 69.81 to fag-end demand for the greenback from importers amid lacklustre local equities.

Long-term Bond Yields Up: Government bonds (G-Secs) slipped on selling pressure from banks and corporates. The 7.17% 10-year benchmark bond maturing in 2028 declined to Rs 95.3525 from Rs 95.68, while its yield moved up to 7.88% from 7.83%. The 6.68% G-Secs maturing in 2031 were also quoted lower at Rs 89.0825.

Shorter-term Bond Yields Up: The 6.84% G-Secs maturing in 2022 slid to Rs 96.2025 from Rs 96.37, while its yield edged up to 7.89% from 7.84%. The 7.59% G-Secs maturing in 2026 fell to Rs 97.34 from Rs 97.50, while its yield rose to 8.07% from 8.04%.

Call Rates Down: The overnight call money rates ended lower to 6.35% from Tuesday's closing level of 6.40%. It resumed higher at 6.55% and moved in a range of 6.65% and 6.25%.

Liquidity: The Reserve Bank of India, under the Liquidity Adjustment Facility, purchased securities worth Rs 15,656 crore in 17-bids at the overnight repo auction at a fixed rate of 6.50% Thursday morning, while it sold securities worth Rs 8,516 crore in 37-bids at the 2-days reverse repo auction at a fixed rate of 6.25% as on August 21.

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