Wall Street slipped on Monday on global growth worries after the weekend attack on Saudi Arabian crude facilities knocked out 5% of the world's supply, while a more than 10% jump in oil prices lifted beaten-down energy stocks.
The attack on the world's biggest oil exporter sent oil prices up as much as 20% before they eased off their peaks as U.S. President Donald Trump authorized the use of the country's emergency oil stockpile to ensure stable supplies.
The rupee has fallen to 71.4 against the dollar and is likely to remain volatile. This volatility will hurt exporters the most, especially MSMEs, which are not in a position to hedge substantially. Apart from the petroleum-related products which are directly impacted by oil prices, sectors such as plastics and textiles could also be hit particularly hard by the double whammy of rising oil prices and a volatile rupee
- Pushkar Mukewar, Co-Founder and Co-CEO of Drip Capital
The upper end of a potential bearish running triangle and the 40-day exponential moving average may restrict any sharp upside. The short-term bearish potential holds true as long as Nifty50 trades below 11,180
- Gaurav Ratnaparkhi, Sharekhan
At this juncture, the bulls appear to be in a slightly advantageous position than the bears, as negative news flow failed to push Nifty50 below 10,945 level, a critical near-term support. If Nifty holds above 10,945 on Tuesday, it can eventually try to register a breakout above 11,081 level, which will further strengthen the bulls
- Mazhar Mohammad, Chartviewindia.in
Immediate resistance in the 11,050-11,150 range and support in the 10,870- 10,750 zone. Overall, Nifty is on a path of recovery and the index is likely to test the 11,300-11,500 zone on the upside soon
- Manav Chopra, Indiabulls Ventures
ETMarkets Evening Podcast: Will crude oil spike hit FPI inflows?
Nifty has good supports in the 10,950-10,900 range. If it manages to hold above this range, it can see a swift move towards the immediate hurdle in the 11,050-11,100 zone in the near term
- Rohit Singre, Senior Technical Analyst, LKP Securities
Nifty formed an Inside Bar on the daily scale, as buying emerged near the 10,950 level, while supply pressure was intact at higher levels. The index formed a NR 4 pattern on the daily scale, as it has traded in a 130-point band from past four sessions. Now it has to hold above 11,000 level to witness a move towards the next major hurdle at 11,080 and then 11,141 level, while on the downside, support exists at 10,950 and then 10,880 levels
Nifty opened gap-down and closed on a weak note, however, broader markets were buoyant as midcaps and small caps performed better, which is encouraging. We continue our bullish stance on Nifty and expect the dust to settle shortly. Near term support is placed at 10,850 zone. Overall Nifty is in a path of recovery and the index is likely to test the 11,300-11,500 zone
- Manav Chopra, CMT, Head Research - Equity, Indiabulls Ventures
The sharp surge in oil prices has impacted sentiment as it has an adverse impact on Indian economy. Going forward, investors would keep a close watch on geopolitical developments as any escalation could take oil prices even higher. Moreover, the FOMC meet would also be on investors’ radar wherein there are expectations for a rate cut. However, commentary on growth and rate outlook would be a key factor to watch out for. Given the current scenario, we expect the market to remain volatile in the near term
RBI Governor Shaktikanta Das on Monday said India's June quarter GDP growth print at 5 per cent came in as a big surprise for the central bank, whose growth forecast at 5.8 per cent was way off the mark.
This, he said, has set off an internal review within the Reserve Bank of India to find out "what we missed out, where we went wrong."
"We are examining the GDP much more closely now," the governor told ETNOW in an exclusive interview. "In inflation forecasting, we are almost on the dot now. The margin of error has come down significantly. We want to get more accurate with GDP forecast too," he said.
Announcements on autos, real estate, exports and other sectors should aid recovery
- Shaktikanta Das
We identified growth as our highest priority in August. We have also maintained that it cannot be business usual now and the economy needs something more. Therefore, we went for 35 basis points cut in August
- Shaktikanta Das
The first quarter gross domestic product figure was a big surprise for us as we had projected 5.8% growth
- Shaktikanta Das
Have to see if slowdown sustains in Q2, not able to talk about recovery yet
- Shaktikanta Das
Need more time to see the impact of Saudi Arabia incident
- Shaktikanta Das
RBI was among the first central banks to move to accommodative policy: RBI Governor Shaktikanta das
Boiling crude sends Sensex crashing 262 pts; Nifty holds above 11,000; HDFC twins, RIL drop up to 2%
Overlapping British and European Union share trading rules would damage markets "to no good end" and can be avoided, Britain's top markets watchdog said on Monday.
Britain is due to leave the EU on Oct. 31, but has yet to agree a divorce settlement with the bloc.
Brussels has said that if there is a 'no-deal' Brexit, investment firms in the bloc must trade euro-denominated shares in the EU; many are currently heavily traded in London.
Air India Assets Holdings Ltd (AIAHL) on Monday raised Rs 7,000 crore through bonds issue, which was oversubscribed.
AIAHL is a special purpose vehicle of national carrier Air India.
As part of efforts to clean up the balance sheet of Air India, which has a debt burden of more than Rs 58,000 crore, little over half of the amount is to be repaid by way of proceeds from the issuance of bonds by AIAHL.
European shares fell on Monday after four straight sessions of gains as attacks on crude facilities in Saudi Arabia and weak Chinese data added to worries over global growth while boosting shares in unaffected oil producers.
The drone attacks on the weekend, which cut more than 5% of the global oil supply, sent crude prices soaring as much as 19% and pushed the oil & gas index 2.4% higher, driving roughly 3% gains for majors BP and Shell.
We see little near term respite for the macro, therefore, noting that most indicators we track continue to worsen leaving us less sanguine on earnings too. In our model portfolio, therefore, we seek comfort in Industrials (moderate valuations), Financials (earnings turnaround) and Tech (deal momentum, weaker INR) with a bias for large-caps.
- Jefferies India
In a slowing economy you have to be careful when you are selecting stocks because even the pockets where you believe that growth is kind of insulated and will continue to come, could have some impact as we go along. And also over the weekend we have got a new negative development which is of the disruption of oil supplies from Saudi Arabia. We need to see whether the spike that we have seen as a knee-jerk reaction today whether that will cool of whether there is going to be some really negative medium term implication
If drone strikes at Saudi Arabia’s Abqaiq and Khurais oil facilities snowball into a geopolitical crisis between the US and Iran, the rally in crude oil prices may not halt anytime soon.
And that will be bad news for a host of Indian industries that use crude derivatives as inputs, from aviation to paints, tyre, cement, oil & gas (OMCs) and auto firms, say analysts.
On Monday, Brent futures jumped nearly 19.5 per cent to trade at $71 a barrel in Asia, clocking their biggest gains in percentage terms since 1991.
I think that we will have a better second quarter if the average crude price is going to be better because it will have an impact on the valuation of inventories. Our first quarter number was about $69 to a barrel. We were expecting it to come down to $62 in the second quarter and first fortnight of August. Now if it is going to remain at $70 oil for the next 15 days, it can only have a positive impact on us.
Fund managers including Aberdeen Standard Investments Ltd. and JPMorgan Chase & Co. are shying away from increasing their positions in government-owned lenders. As well as poor asset quality at the banks, they cited uncertainty about the mergers’ time-line.
The spike in global crude prices, even though temporary, will be negative for downstream OMCs (BPCL, HPCL and IOCL) and Castrol. We do not rule out a possibility of moderation in marketing margins on auto fuels—a US$10/bbl rise in global crude and product prices may require OMCs to increase retail price of diesel and gasoline by Rs5-6/liter in the following fortnight. Sharp jump in global crude prices may also put pressure on refining margins amid slowing demand, besides increasing absolute quantum of fuel and loss. On the other hand, higher crude prices may be construed positively for upstream PSUs and GAIL.
- Kotak Institutional Equities
Gold prices rise over 1% as oil price spike triggers uncertainty
Gold prices advanced over 1 per cent in early trade on a surge in safe-haven demand after drone attacks on Saudi Aramco’s oil facilities hit 5 per cent of the world’s crude supply.
MCX Gold futures traded 1.28 per cent, or Rs 479, higher at Rs 38,003 per 10 gm. White metal silver gained 2.50 per cent, or Rs 1,140, to trade at Rs 46,901 per 1 kg.
SBI drops as lender shelves IPO plan for general insurance arm
The scrip fell 0.8 per cent to Rs 289.55 after India's largest lender State Bank dropped its plan to take its general insurance arm public. There is no need for additional capital now, chairman Rajnish Kumar said.
Andhra Bank gains on IndiaFirst Life stake sale buzz
The scrip was trading 1 per cent higher at Rs 19.75 amid reports that Warburg Pincus is likely to buy another 20.5 per cent stake in IndiaFirst Life Insurance from the PSU lender.
Prabhat Dairy drops 3% after co sets floor price for delisting
The stock fell 3.66 per cent to Rs 76.40 after the company set the floor price of the delisting proposal at Rs 63.77.
NYMEX crude to stay in $56-63 per barrel in short term: Reliance Commodities
The Drone attack on Saudi Aramco oil facilities is estimated to impact 5 million bpd of oil production and further news that Saudi Arabia plans to shut down about half of it's output after strike will have impact on the overall oil prices and global economy. The immediate range for NYMEX crude will be $56 to 63 per barrel, says Pritam Kumar Patnaik, Head Commodities, Reliance Commodities.
Spike in crude oil prices negative for OMCs: Emkay Global
A sudden spike in oil prices is negative for OMCs (IOCL, BPCL, HPCL), said Emkay Global Financial Services in a note. Higher oil prices are positive for GAIL, it said, adding that a $65-70/bbl range is ideal for ONGC and Oil India.
RIL, HDFC and Asian Paints contribute most to Sensex losses; YES Bank down 2%
IndiGo, SpiceJet tumble up to 5% as ATF prices set to rise
Shares of airline majors including InterGlobe Aviation and SpiceJet tumbled up to 5 per cent in trade following a spike in international crude oil prices. Brent crude was trading over 10 per cent up at $66.25 per barrel, while WTI crude was trading 8.93 per cent higher at $59.75.
DLF drops 1% despite Rs 300 crore land parcel deal
The scrip fell 1 per cent in trade due to overall weakness in the market. Realty major DLF has sold a 9 acre land parcel in New Gurugram to American Express for about Rs 300 crore in one of the costliest land deals in this area, sources said.
Sensex slips over 250 points on higher crude prices, Nifty below 11,000
Sensex slips over 200 points on higher crude prices, Nifty below 11,000; YES Bank, Asian Paints down over 2% each
Singapore trading sets stage for negative start
Nifty futures on the Singapore Exchange were trading 89 points, or 0. 80 per cent, lower at 11,022, indicating a negative for Dalal Street.
Tech view: Nifty needs to take out 11,141
Nifty50 on Friday staged a smart rebound from its support at 10,950 to eventually form a bullish candle on the daily as well as weekly charts. The NSE barometer may need to take out its strong resistance at 11,141 to trigger a stronger rally.
Asian shares edge higher in early trade
MSCI's broadest index of Asia-Pacific shares outside Japan was a tick lower at 515.4. Australian shares were down 0.1% while South Korea's KOSPI was a tad higher. E-Minis for the S&P 500 were off 0.4 per cent while those for the Dow eased 0.3 per cent.
Oil prices hit 6-month high
Oil prices surged to six-month highs on Monday while Wall Street futures fell and safe-haven bets returned after weekend attacks on Saudi Arabia's crude facilities knocked out more than 5 per cent of global oil supply. Brent crude soared 13 per cent at $68.06 after earlier rising to $71.95.
FIIs buy Rs 784 crore worth equities
Net-net, foreign portfolio investors (FPIs) were sellers of domestic stocks to the tune of Rs 405 crore on Friday, data available with NSE suggested. DIIs were net buyers to the tune of Rs 210 crore, data suggests.
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