Markets likely to consolidate further; PSU Banks stocks in focus

Union finance minister Nirmala Sitharaman, who is in Mumbai, will undertake an annual performance review of public sector banks (PSBs) on Wednesday

Markets are likely to consolidate on Wednesday while trends in SGX Nifty suggest a marginally higher of Indian benchmark indices. On Tuesday, the Sensex ended at 55,958.98, up 403.19 points or 0.73%. The Nifty was at 16,624.60, up 128.15 points or 0.78%.

Asian stocks edged up Wednesday at the open after US gains as strong corporate earnings and a commodity rally boost confidence in the economic recovery from the pandemic. Treasuries and the dollar steadied after declines.

Benchmarks advanced in Japan, South Korea and Australia. US contracts fluctuated after the S&P 500 and the Nasdaq 100 closed at record highs.

Back home, Union finance minister Nirmala Sitharaman, who is in Mumbai, will undertake an annual performance review of public sector banks (PSBs) on Wednesday. This is the first visit by the finance minister since the onset of the covid-19 pandemic and comes at a time when a greater focus is on the government for aiding recovery because high inflation constrains the Reserve Bank of India (RBI).

A plan to allow new entities to create digital payment platforms and end the National Payments Council of India’s (NPCI) dominance in online transactions has been put on hold by the regulator over data safety concerns, according to a Mint exclusive. At least six consortiums, including those led by Amazon, Google, Facebook and the Tata group, applied for the so-called new umbrella entities (NUEs) licences, in partnership with companies such as Reliance Industries Ltd and ICICI Bank Ltd after the Reserve Bank of India (RBI) invited expressions of interest last year.

Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts will be included in the Nifty indices from September 30, according to new eligibility criteria announced by the NSE.

HDFC Bank has divested more than 2% stake in Central Depository Services (India) Ltd (CDSL) in tranches during June-August this year, garnering nearly ?223 crore from the sale, according to a regulatory filing.

In commodity markets, oil held above $67 a barrel in part on China’s success in stamping out virus flare-ups, which is easing some of the concerns about the impact of the delta variant on demand. Iron ore also climbed.

In the latest developments following China’s crackdown on private industries, the Securities and Exchange Commission said it will demand that the more than 250 Chinese companies trading in U.S. markets better inform investors about political and regulatory risks. The Nasdaq Golden Dragon China Index jumped after solid results from JD.com Inc. lured investors including Cathie Wood.

Company earnings, expanding vaccinations and support from monetary policy are repairing sentiment after a bout of jitters over the economic outlook caused by the fast-spreading delta strain. The next key read on the central bank outlook is due later this week when Federal Reserve Chairman Jerome Powell speaks at the Jackson Hole symposium.

In the U.S., the House adopted a $3.5 trillion budget resolution, helping move forward on the core of President Joe Biden’s economic agenda.
 

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