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

SUMMARY

The Indian stock market is expected to open higher on Friday ahead of the RBI policy announcement. At 7:50 am, the SGX Nifty traded 46 points higher at 11,873.80, indicating a positive start for the Sensex and the Nifty50.

By CNBCTV18.comOct 9, 2020 7:56:45 AM IST (Published)

1. Asia: Stocks in Asia-Pacific were mixed in Friday morning trade as investors await the release of a private survey of China’s services sector activity for September. In Japan, the Nikkei 225 rose 0.15 percent while the Topix index was fractionally lower. Meanwhile, shares in Australia were little changed, with the S&P/ASX 200 below the flatline. MSCI’s broadest index of Asia-Pacific shares outside Japan traded slightly higher. Markets in South Korea and Taiwan are closed on Friday for holidays, reported CNBC International.

2. US: U.S. stock futures rose on Thursday night as Wall Street continued to search for clarity surrounding a new potential fiscal aid bill. Dow Jones Industrial Average futures were up 121 points, or 0.4 percent. S&P 500 and Nasdaq 100 futures gained 0.4 percent and 0.3 percent, respectively. The Dow ended Thursday’s session at its highest level since early September, rising more than 100 points. The Nasdaq Composite gained 0.5 percent and the S&P 500 outperformed with a 0.8 percent advance, reported CNBC International.

3. Market At Close On Thursday: Indian shares pared some gains but ended higher for the sixth straight session on Thursday as IT stocks gained on buyback plans of Tata Consultancy Services (TCS) and Wipro. TCS decided to buy back up to $2.2 billion in shares while smaller-rival Wipro said it would also consider stock repurchase on October 13 board meeting. The sentiment was also lifted after TCS reported better than expected earnings for the September quarter. The Sensex ended 304 points higher at 40,183 while the Nifty rose 96 points to 11,834. The Sensex reclaimed 40,000 for the first time since August 31.

4. Crude Oil: Oil climbed on Thursday on support from output shutdowns ahead of a storm in the U.S. Gulf of Mexico and the prospect of more supply losses in Norway. Brent crude was up 86 cents, or 2 percent, to $42.85 barrel, after falling 1.6 percent on Wednesday. West Texas Intermediate (WTI) crude settled $1.24, or 3.1 percent, higher at $41.19 per barrel after falling 1.8 percent on Wednesday, reported CNBC International.

5. Rupee Close: The Indian rupee ended higher on Thursday supported by positive domestic equities and weak American currency. The rupee ended at 73.24 against the US dollar as compared to previous close of 73.33.

6. Former RBI Governor On Fiscal Deficit: The combined fiscal deficit of states and the centre during the current year may go up to 14 percent against the mandated level of six percent, former Reserve Bank Governor C Rangarajan said on Thursday. Speaking at a programme organised by the ICFAI Business School here, the former Chairman of the Economic Advisory Council to the Prime Minister said banks should neither be timid nor adventurous while lending as the loans of today should not become NPAs of tomorrow. According to him, the fiscal deficit may further go if the government decides to go in for additional borrowings to meet GST compensation part.

7. GST On Two-Wheeler, Health Insurance Premium Not There Yet: It seems the wait for a potential two-wheeler and health insurance GST rate cut is going to stretch longer. People in the know have told CNBC-TV18 that the proposals for the same are yet to be examined by the government. Since then, the GST council has met twice, first on August 27 and next on October 5. “The two proposals to cut GST rates on two-wheelers and health insurance premium have not even been tabled before GST council nominated Fitment Committee,” sources had told CNBC-TV18, quoting the IRDAI representation to finance ministry.. It is reliably learnt that the upcoming GST Council meet on October 12 will focus only on ironing out the pending issue to raise funds to make good for the shortfall in the compensation cess kitty.

8. Economist Rathin Roy On GST Row: Amid a tug of war between the Centre and a bunch of states over who should borrow to make good the GST shortfall, the government has tweaked its borrowing proposal. Rathin Roy, Managing Director at Overseas Development Institute, shared his thoughts on the recent developments, in an interview with CNBC-TV18. He believes the Centre can demonstrate competence which is it is presently not doing or it can provide reassurance which it is not willing to. In such circumstances, relationships are going to be intricate and ultimately the Centre will have its way. "I think and the states will be forced to borrow but that is extremely depressing prospects for inter-government fiscal relationship going forward," he said. (stock image)

9. Mohandas Pai On RBI's Restriction On Mauritius FDI: After the government restricted the foreign direct investment (FDI) from China without any clarity on the threshold, the Reserve Bank of India (RBI) has now said that it does not want Mauritius based funds to provide foreign direct investment to the Indian non-banking financial companies (NBFCs) sector. The sector is cash-starved and the private equity and venture capital industry focussed on this space are largely using Mauritius as a choice of jurisdiction. TV Mohandas Pai, Chairman at Aarin Capital feels the move is illogical, and feels the 'fit and proper' criteria followed by RBI is good enough to decide who should be allowed to invest in NBFCs.

10. World Bank On India GDP: World Bank estimates that India’s growth will contract sharply by 9.6 percent in FY21 in the base case scenario and this is largely reflective of the economic impact of the lockdown and the income shock that has been experienced both by households and firms. It says there are a lot of uncertainties still with regards to the outcome of the pandemic, but growth is expected to rebound to 5.4 percent levels in FY22.