Pre Session Commentary

Positive global cues may further boost domestic shares
(01-Aug-2018, 08:04 Hours IST)  

Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could rise 20.50 points at the opening bell on positive global cues.

The Reserve Bank of India (RBI) will conclude its two-day monetary policy meeting today, 1 August 2018. The resolution of the Monetary Policy Committee (MPC) will be unveiled at 14:30 IST today, 1 August 2018. RBI raised its benchmark policy repo rate by 0.25% to 6.25% in its second bi-monthly monetary policy for 2018-2019 on 6 June 2018.

Overseas, Asian stocks edged higher, taking cues from the positive session seen in the US market following news that the US and China may restart official talks about their months-long trade dispute.

US stocks closed higher Tuesday, as investors continued to digest an onslaught of quarterly earnings reports, with the vast majority beating expectations. But headline news on trade continued to drive markets.

According to media reports, representatives of US Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are in private talks to resume negotiations on trade matters in a bid to avoid a trade war.

Investors will be watching data from around the Asian region, including manufacturing activity numbers from China, for indications of the outlook for the global economy.

Policy meetings of the US Federal Reserve on Wednesday, 1 August 2018, and the Bank of England on Thursday, 2 August 2018, will also keep some investors on the sidelines, although the US central bank is expected to keep rates unchanged.

On the US data front, consumer spending rose a solid 0.4% in June. Meanwhile, the employment cost index rose 0.6% in the second quarter. The S&P/Case-Shiller national index rose a seasonally adjusted 0.4% and was up 6.4% for the year in May. A measure of regional manufacturing activity in Chicago came in at the highest in six months. Chicago PMI rose 1.4 points to 65.5 in July, MNI Indicators said. Any reading above 50 indicates improving conditions. Separately, a reading of consumer confidence came in at 127.4 in July, compared with 126.5 in the previous month.

Closer home, foreign portfolio investors (FPIs) bought shares worth a net Rs 572.21 crore yesterday, 31 July 2018, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 290.87 crore yesterday, 31 July 2018, as per provisional data.

Domestic stocks extended their recent record-setting spree yesterday, 31 July 2018, on buying demand in index pivotals. The barometer index, the S&P BSE Sensex, rose 112.18 points or 0.30% to settle at 37,606.58. The Nifty 50 index rose 36.95 points or 0.33% to settle at 11,356.50. Both the Sensex and the Nifty hit record high on intraday as well as closing basis.

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