Tuesday 15 September 2015

Sensex Set to Open Lower; Steel Stocks, Maruti Suzuki to Be in Focus

BSE Sensex and Nifty are set to open lower amid mostly weak Asian markets and overnight fall on Wall Street. The SGX CNX Nifty is down 0.26 per cent to 7,853, indicating a lower start for Indian markets.

Here are the top developments:

1) Asian shares mostly retreated Tuesday as concerns over China kept investors on edge ahead of a US interest rate decision later this week, while Japan equities rallied on hopes for fresh measures to shore up the torpid Japanese economy.

2) China's Shanghai Composite slumped 2.7 per cent while Japan's Nikkei was up 1.3 per cent. Overnight, the Dow Jones industrial average fell 62.13 points, or 0.38 per cent.

3) Stocks in focus: The government on Monday imposed a 20 per cent safeguard import tax on some steel products with immediate effect. This is likely to bring steel stocks like Tata Steel and JSW steel in focus.

4) The Reserve Bank has allowed foreign investors to invest up to 40 per cent of the paid up capital in Maruti Suzuki under the Portfolio Investment Scheme.

5) Rate sensitive stocks like banking, auto and real estate stocks will also come under focus after inflation dived to a new low in August, helped by falling global commodity prices, bolstering prospects of an interest rate cut by the Reserve Bank of India (RBI) later this month.

6) Retail inflation, which the central bank tracks to set rates, eased to 3.66 per cent in August from a revised 3.69 per cent a month ago. The reading was almost in line with 3.6 per cent forecast by analysts in a Reuters poll and way below the Reserve Bank of India's 6 percent target for January 2016.

7) It came hours after other government data on Monday showed wholesale prices tumbled for a tenth straight month last month, falling an annual 4.95 percent compared with a provisional 4.05 percent slide in July.

8) With the September 17 Fed meet drawing closer, investors in Indian markets will turn cautious. Some analysts expect the Federal Reserve is expected to raise its interest rate amid improving economic recovery in the US. However, there are also hopes that the recent turmoil in the global markets triggered by the devaluation of China's currency could force the Fed to delay the rate hike.

9) An interest rate hike in the US could accelerate the selling from foreign investors in emerging market stocks. Besides, a rate hike in the US would strengthen the dollar, putting further pressure on rupee. The rupee had closed higher at 66.32/dollar on Monday against its previous close of 66.54.

10) Analysts also remain worried over selling from foreign investors though it has eased in recent sessions. Foreign investors sold a record Rs 16,877 crore worth of domestic stocks in August. Foreign investors bought (net) Indian shares worth Rs 58.75 in cash market on Monday - their first single-day net purchase so far this month.        

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