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

SUMMARY

Indian equity markets are expected to open steady on Wednesday over hopes of an additional Chinese stimulus to ease the economic meltdown impacted by the coronavirus outbreak. The RBI's Monetary Policy Committee meeting on Thursday will be closely monitored by the domestic market participants today. At 7:02 am, the SGX Nifty was trading 24 points or 0.20 percent lower at 11,949, indicating at a marginally lower start for the Sensex and Nifty50.

By CNBC-TV18Feb 5, 2020 7:57:08 AM IST (Updated)

1. Asia: Asian stocks steadied on Wednesday on hopes of additional Chinese stimulus to lessen the economic impact of the coronavirus outbreak, but risks remain as the illness continues to spread and the death toll neared 500. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.3 percent. Australian shares were up 0.58 percent, while Japan's Nikkei stock index rose 1.19 percent.

2. US: The Nasdaq hit a record high on Tuesday and the S&P 500 posted its biggest one-day gain in about six months as fears of a heavy economic impact from the coronavirus outbreak waned after China's central bank intervened. The Dow Jones Industrial Average rose 407.82 points, or 1.44 percent, to 28,807.63, the S&P 500 gained 48.67 points, or 1.50 percent, to 3,297.59 and the Nasdaq Composite added 194.57 points, or 2.1 percent, to 9,467.97.

3. Market At Close On Tuesday: Domestic stock markets closed Tuesday's session sharply higher, recording their best day since last September, tracking global gains and the recent slide in crude prices. Investors opted for low-level buying in beaten-down stocks. The Sensex gained 917.07 points, or 2.30 percent, to settle Tuesday's trade at 40,789.38. The Nifty rose 271.75 points, or 2.32 percent, to end at 11,979.65. Meanwhile, foreign institutional investors bought Rs 366 crore in the cash market while the domestic institutional investors bought Rs 602 crore.

4. Rupee Close: The Indian rupee on Tuesday appreciated by 11 paise to close at 71.27 against the US dollar, tracking heavy buying in domestic equities and easing crude prices. However, concerns over fiscal slippage and rising coronavirus outbreak fears still remain, forex traders said. The Reserve Bank of India's monetary policy outcome could be the next trigger for the domestic unit, as its commentary on inflation and growth forecast will be followed closely by the investors, they added.

5. Crude Oil: Oil prices sank about 1 percent on Tuesday as fears that energy demand would take a long-term hit from the growing coronavirus outbreak outweighed hopes for more production cuts from OPEC and its allies. Brent crude settled at $53.96 a barrel, sliding 49 cents, or 0.9 percent, while US West Texas Intermediate (WTI) crude settled at $49.61 a barrel, losing 50 cents, or 1 percent. Both benchmarks were at their lowest since January 2019.

6. RBI Seen Holding Rates: The Reserve Bank of India is likely to keep monetary policy accommodative without cutting interest rates at a policy meeting on Thursday, economists said, as inflation is above target and the economy has shown possible signs of recovery from its worst slowdown in more than a decade. A Reuters poll of economists, conducted before the federal budget on February 1, showed the central bank is expected to keep the repo rate unchanged until at least October when it is seen resuming its easing path. The RBI is now forecast to next cut rates by 25 basis points to 4.90 percent in the October-December quarter, though some analysts reckon the central bank will keep rates on hold for longer.

7. Finance Ministry To Assuage Rating Agencies Concerns: The finance ministry has said it will try to assuage concerns of rating agencies on opting for the higher deficit and other Budget numbers while stressing that fundamentals of the economy are strong. Economic affairs secretary Atanu Chakraborty said the Indian economy remains robust and more than meets the requirement of investment-grade and above. "Certainly, I can say that the economy remains robust and more than meets the requirement of investment-grade and above," he said. Asked if he is apprehensive about rating downgrade following a relaxation in the fiscal deficit target, he said, "No, not at all. Since I see the numbers much more closely, I am strongly confident of the inherent robustness of the economy. It is far too robust than our numbers reflect." This is the economy that has just decelerated, he said adding that no contraction took place.

8. Direct Tax Collections Witness Negative Growth: Direct tax collections from April 2019 to February 3, 2020, are at Rs 7.40 lakh crore versus the revised budget estimates of Rs 11.70 lakh crore. The revision in the estimate was made after making a "realistic assessment" of various economic factors, according to North Block officials. The government recently reduced the corporate tax rate for new companies in the manufacturing sector to 15 percent and for the existing companies, the rate has been brought down to 22 percent. (Stock Image)

9. Sebi Welcomes Budget Announcement On DDT: Capital markets regulator Sebi chief Ajay Tyagi on Tuesday welcomed the budget announcement of putting the onus of paying dividend distribution tax (DDT) on the investor rather than the company. He also said the watchdog has sought replies from fund houses like Franklin Templeton who have marked down their investment for debt holdings of telecom company Vodafone Idea following the broader issues in the sector. Abolition of DDT for companies "was something which the market was asking. If you can collect actual tax from the investor as per business income, that should be the tax. That is logical," Tyagi told reporters on the sidelines of an event at the NSE. "It is a movement in the right direction," he added while commenting on the government's decision to transfer the tax liability on DDT.

10. Sebi On FPI Registration: Markets regulator Sebi on Tuesday came out with a common application form for registration of foreign portfolio investors in order to enhance operational flexibility and ease of access to Indian capital market. Depository participants have been asked to continue to accept in-transit FPI registration applications, for a period of 60 days, Sebi said in a circular. The regulator has come out with a Common Application Form (CAF) for registration of FPIs, allotment of Permanent Account Number (PAN) and carrying out of Know Your Customer (KYC) for opening of bank and demat accounts. The applicants seeking FPI registration need to fill the common form prescribed by the regulator, declaration providing supporting documents and applicable fees for registration and issuance of PAN.