10 things you need to know before the opening bell on August 5

SUMMARY

Benchmark indices BSE Sensex and NSE’s Nifty50 are likely to open lower on Monday amid continued selling by foreign investors and losses in global markets. At 7.20 AM, the SGX Nifty futures traded 77 points, or 0.70 percent, lower at 10,938, indicating a negative start of the Sensex and the Nifty.

By CNBC-TV18Aug 5, 2019 7:24:59 AM IST (Updated)

Asian shares extended their losses on Monday as a sharp escalation in the Sino-US trade war kept finiancial markets on edge, reported Reuterd. MSCI’s broadest index of Asia-Pacific shares outside Japan fell for a seventh straight day to a two-month trough of 502.83, down 0.25 percent. Japan’s Nikkei slipped 1.1 percent to the lowest since early June, while Australian shares were also down for their fourth straight session in the red. South Korea’s Kospi tumbled 1.2 percent to hit the lowest since December 2016.

Oil extended losses with US crude off 31 cents at 55.35 and Brent down 58 cents at $61.31.

Indian shares settled higher on Friday led gains in auto and IT stocks. The BSE Sensex closed 100 points, or 0.3 percent, higher at 37,118. NSE’s Nifty50 rose 17 points, or 0.16 percent, to end at 10,997.

US President Donald Trump on Saturday said on Twitter, "Things are going along very well with China. They are paying us Tens of Billions of Dollars, made possible by their monetary devaluations and pumping in massive amounts of cash to keep their system going. So far our consumer is paying nothing - and no inflation. No help from Fed!"

The National Housing Board (NHB) has thrown a liquidity lifeline to housing finance companies. The NHB has announced an additional liquidity infusion facility of Rs 10,000 crore for priority sector home loans for one year. This is only limited to affordable housing, which means loans up to Rs 35 lakh in metros and for non-metros limit is Rs 28 lakh. This advance credit line is open for HFCs not just for home loans but also for under-construction projects.

The Reserve Bank has slapped penalties on nine commercial banks, including State bank of India, Punjab National Bank and Bank of Baroda, for a host of violations, including a delay on the reporting of fraud in the account of Kingfisher Airlines in case of two lenders. The nine lenders in separate regulatory filings said that the penalties have been imposed on them for the delay in reporting of frauds.

Foreign investors have withdrawn a net amount of Rs 2,881 crore from the Indian capital markets in the first two sessions of August on account of domestic as well as global headwinds. According to latest depositories data, FPIs pulled out a net sum of Rs 2,632.58 crore from equities and Rs 248.52 crore from the debt segment during August 1-2, taking the cumulative net outflow to Rs 2,881.10 crore.

India will need to grow by 9 percent every year for five years continuously and raise aggregate investment rate to 38 percent of GDP to achieve Prime Minister Narendra Modi's target of turning India into a $5 trillion economy, Ernst & Young has said. In its latest edition of Economy Watch, EY said assuming India grows by projected 7 percent in the current fiscal year ending March 31, 2020, the size of the economy will grow to $3 trillion from $2.7 trillion in the previous year.

The current slowdown in the Indian economy is cyclical and growth will pick up in one or two years, former RBI Governor Bimal Jalan said on Sunday. Jalan further said the government has already announced many reforms, and it is now a question of implementation, particularly in terms of investment. Asked why the private sector still not investing, Jalan said, "It may be due to post-demonetisation effect or maybe they were waiting for (Lok Sabha) election results." Asked what the biggest risks for the Indian economy were, Jalan said he thinks unemployment is a very important problem.

Around two lakh jobs have been cut across automobile dealerships in India in the last three months as vehicle retailers take the last resort of cutting manpower to tide over the impact of the unprecedented sales slump, according to industry body FADA.