10 things that you need to know before the opening bell on December 9

SUMMARY

The Indian market is likely to open flat on Monday, following global markets. The Sensex dropped 348.66 points while the Nifty lost 134.55 points last week, erasing all the record-high gains. At 7:07 am, the SGX Nifty was trading 11 points or 0.09 percent lower at 11,943.50, indicating a flat-to-negative start for the domestic market.

By CNBC-TV18Dec 9, 2019 7:51:44 AM IST (Updated)

1. Asia: Asian stocks traded higher Monday morning as China’s exports declined in November for the fourth consecutive month, Reuters reported citing customs data. The Nikkei 225 in Japan rose 0.33 percent in early trade while the Topix index gained 0.36 percent. South Korea’s Kospi also added 0.13 percent. Meanwhile, shares in Australia gained in morning trade, with the S&P/ASX 200 up by 0.2 percent. (Reuters)

2. US: The dollar rose and global equity markets rallied on Friday after data showed U.S. job growth increased by the most in 10 months in November, putting to rest fears of recession and briefly taking the spotlight off the U.S.-China trade talks. The Dow Jones Industrial Average rose 305.08 points, or 1.1 percent, to 27,982.87. The S&P 500 gained 29.32 points, or 0.94 percent, to 3,146.75 and the Nasdaq Composite added 79.98 points, or 0.93 percent, to 8,650.68.

3. Markets At Close On Friday: Indian benchmark equity indices, the BSE Sensex and NSE Nifty50, ended sharply lower on Friday, dragged by sustained selling in banking, consumer and auto counters. This is the second consecutive session market ended at over two-week lows. The Sensex tumbled 0.81 percent, or 96.90 points, to close Friday’s trade at 11,921.50, while the broader Nifty50 index settled at 11,921.5, down 96.90 points, or 0.81 percent. Meanwhile, the foreign institutional investors sold Rs 868 crore in the cash market while the domestic institutional investors bought Rs 211 crore.

4. Crude Oil: Oil moved higher on Friday as OPEC and its allies agreed to deepen oil production cuts to 500,000 barrels a day through to March 2020. This brings the total production cut to 1.7 million barrels a day. U.S. West Texas Intermediate crude futures gained 77 cents, or 1.3 percent, to settle at $59.20 a barrel. For the week WTI gained more than 7 percent, for its best week since June. During Friday’s trading session Brent gained 1.6 percent to settle at $64.37.

5. Rupee: The Indian rupee appreciated 9 paise to close at 71.20 against the US dollar on Friday, a day after the RBI kept the policy rate unchanged and decided to continue with its accommodative stance to support the economy. Investor sentiment strengthened after the Reserve Bank of India signaled to continue with its accommodative stance, while easing crude oil prices also supported the domestic currency, forex traders said.

However, heavy selling in domestic equities weighed on the local unit and restricted the gains, they added. At the interbank foreign exchange market, the rupee opened at 71.30 and shuttled between a high of 71.19 and a low of 71.43. It finally finished at 71.20, up by 9 paise.

6. Budget-Making Team Short Of Two Officials: The budget-making team of the finance ministry is short of two key officials, including a full-time expenditure secretary, while the preparation for the second budget of Modi 2.0 government has shifted into top gear. The budget for 2020-21 to be presented on February 1 is keenly awaited for the expected second wave of structural reforms for pulling out the economy from its over six-year low growth of4.5 percent. In addition to expenditure secretary, the position of joint secretary (Budget), one of the key officials in the entire Budget-making process, is also vacant for almost three months.

7. FM Nirmala Sitharaman On Slowdown: Finance minister Nirmala Sitharaman said her attention will be doing more on stimulus as the government tackles a crushing slowdown gnawing at the economy. "I'd like to believe there is a recovery in some sectors but others still need some help," Sitharaman said at the Hindustan Times Leadership Summit in New Delhi on Saturday. "My focus is on ensuring more is done for more stimulus," she said. "So there are ways in which for giving stimulus for consumption. We are adopting a direct method and also the method through which we are spending on infrastructure, whose spillover can go to core industries labour and so on," she said.

8. India In Growth Recession, Says Raghuram Rajan: Former RBI Governor Raghuram Rajan said India is in the midst of a "growth recession" with signs of a deep malaise in the Indian economy that is being run through extreme centralization of power in Prime Minister's Office and powerless ministers. Penning down his recommendations to help the ailing Indian economy out of the ongoing slowdown in the India Today magazine, he called for reforms to liberalize capital, land and labour markets, and spur investment as well as growth. He also urged India to join free trade agreements judiciously in order to boost competition and improve domestic efficiency.

9. Cut Corporate Tax By 15%, Says CII: Industry chamber CII on Friday suggested that the government should reduce the personal income tax rate and slash corporate tax further to 15 percent for all companies over three years to boost demand and propel growth. In a pre-budget consultation meeting with Revenue Secretary Ajay Bhushan Pandey, the Confederation of Indian Industry (CII) recommended focusing on providing impetus to consumption and investment. CII suggested that in order to bring about uniformity, all corporate tax rates should be converged to 15 percent with no exemptions and incentives over a period of three years till 2023. "A signalling to this effect in the budget could help further boost investor sentiment and encourage investments," the industry body said.

10. IHS Markit On GDP Growth: India's real GDP growth in 2019-20 fiscal is expected to be slightly below 5 percent as the impact of stimulus measures will take time to filter through to the economy, IHS Markit has said. The latest GDP data for the July-September quarter showed a significant further moderation in the pace of economic growth to 4.5 percent, the weakest in six years with a key contributory factor being a slump in manufacturing output. This compared with the 5 percent growth rate registered in the previous quarter and 7 percent rate recorded a year ago in the September quarter of 2018.

For the first half of 2019-20 fiscal, GDP growth slowed to a pace of 4.8 percent compared to the 7.5 percent a year back. "Financial sector fragilities continue to weigh on India's economic growth momentum, with the high level of non-performing loans on the balance sheets of the public sector banks, constraining their new lending," IHS said in a report.