Markets likely to remain in consolidation mode; RIL, Maruti in focus



MUMBAI: Markets are expected to remain in consolidation mode on Tuesday as trends from SGX Nifty suggest a flat opening in Indian benchmarks. On Monday, BSE Sensex finished at 60,077.88, up 29.41 points. The Nifty closed at 17,855.10, up 1.90 points.

Asian stocks fell mainly on Tuesday as investors continued to worry about the China Evergrande group’s unresolved debt crisis and considered the potential impact of a growing electricity shortage in China.

The MSCI’s largest Asia-Pacific stock index outside of Japan was down 0.13% on Tuesday, after a mixed session on Wall Street.

The future of Evergrande, the world’s most indebted real estate developer, faces forensic scrutiny by investors after the company missed the deadline to make an interest payment last Friday to holders of offshore bonds. Evergrande has 30 days to make payment before it goes into default and authorities in Shenzhen are investigating the company’s wealth management unit.

Without referring to Evergrande, the People’s Bank of China (PBOC) said in a statement on its website Monday that it “would protect the legitimate rights of housing consumers.”

Meanwhile, worsening power shortages in China have halted production at a number of factories.

On the back of a strong tax collection, the government effectively reduced its gross borrowing target for the year on Monday by announcing that it will absorb ??1.59 trillion in additional borrowing for tax compensation to states as part of its annual target. This effectively reduces the annual gross borrowing target to ??10.46 trillion for the year as of March 31 of the budget ??12.05 trillion.

Reliance Industries is in talks to buy a stake in Indian mobile content provider Glance InMobi Pte, according to a news report. The conglomerate plans to invest around $ 300 million in the Google-backed unicorn of Alphabet Inc.

Maruti Suzuki told its component suppliers to be ready for production of 160,000 to 180,000 cars and SUVs in October, as the country’s largest passenger car maker moves to secure supply of chipsets via multiple channels, according to a press article.

After InGovern Research, another proxy advisory firm, Stakeholders Empowerment Services (SES), advised Finolex Cables Ltd shareholders to vote against the appointment of certain directors at the company’s annual meeting on September 29.

The surge in bond yields has prompted a shift from growth stocks to cyclical stocks in the United States, a move that analysts say could become more permanent after a prolonged period of falling bond yields.

U.S. Treasury yields hit a three-month high, hitting 1.516% overnight after the Federal Reserve’s decision last week to indicate that fiscal stimulus could be cut as early as November.

In Asian trade, the dollar appreciated nearly 0.1% in line with its performance in Monday’s international session after advancing alongside bond yields.

Gold was flat, while Brent crude was down 0.2%.

(Reuters contributed to the story)

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