10 things you need to know before the opening bell on January 6

SUMMARY

The Indian market is likely to open in the red on Monday following weakness in global peers on escalating geopolitical tension in the Middle East. At 7 am, the SGX Nifty was trading 26 points or 0.21 percent lower at 12,222.50, indicating a negative start for the Sensex and Nifty50.

By CNBC-TV18Jan 6, 2020 7:50:32 AM IST (Published)

1. Asia: Asian markets fell on Monday following heightened geopolitical tensions in the Middle East. Japanese shares returned for their first day of trade with the benchmark Nikkei 225 declining 1.85 percent in early trade while the Topix index was down 1.48 percent. In South Korea, the Kospi index fell 0.83 percent. In Australia, the ASX 200 was down 0.72 percent, with most sectors trading lower.

2. US: Wall Street's major indexes fell from record highs on Friday after a U.S. airstrike in Iraq ratcheted up tensions in the Middle East and a bigger-than-expected contraction in the U.S. manufacturing sector raised concerns of slowing economic growth. Friday's decline put the benchmark S&P 500 in the red for the week, snapping a five-week winning streak for the index. The Dow Jones Industrial Average fell 233.92 points, or 0.81 percent, to 28,634.88. The S&P 500 lost 23 points, or 0.71 percent, to 3,234.85. The Nasdaq Composite dropped 71.42 points, or 0.79 percent, to 9,020.77.

3. Markets At Close On Friday: Indian market ended lower on Friday as oil prices surged after US airstrikes killed a top Iranian commander, intensifying geopolitical tensions in the Middle East. The weak rupee also dragged the indices further. The Sensex ended 162 points lower at 41,464, while the Nifty settled 55 points lower at 12,227. FPIs began the year with profit booking as they withdrew a net sum of Rs 2,418 crore from the Indian capital markets in the first three trading sessions of January. Also, foreign institutional investors on Friday bought Rs 1,263 crore in the cash market while the domestic institutional investors sold Rs 1,029 crore.

4. Crude Oil: Oil prices added to recent gains on Monday, with Brent nearly at $70 a barrel as escalating tensions in the Middle East fanned worries about disruptions to supplies.

Brent crude futures rose to a high of $69.95 a barrel and were at $69.65 a barrel at 0016 GMT, up $1.05, or 1.5 percent, from Friday's settlement. U.S. West Texas Intermediate crude was at $63.86 a barrel, up 81 cents, or 1.3%, after touching an intraday high of $64.27. Oil prices jumped more than 3 percent on Friday after the United States killed a top Iranian commander in an airstrike on Baghdad airport.

5. Rupee Close: The rupee plunged by 42 paise to settle at a one-and-a-half-month low of 71.80 against the US currency on Friday due to a spike in crude oil prices after US President Donald Trump ordered the killing of a top Iranian general. Brent crude surged 4.5 percent to USD 69.23 per barrel and WTI rose 4.1 percent to USD 63.71 per barrel after worries over an escalation in tensions. "Rupee extended losses yet again on the back of US-Iran tensions," Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities said adding that spike in crude prices is making importers buy US dollar to hedge net outflows for crude buying.

6. Finance Minister On Addressing Issues: Finance Minister Nirmala Sitharaman on Sunday said the Centre has taken steps to address the challenges faced by various sectors without waiting for the Budget. She also said that GST collection, which crossed Rs 1 lakh crore per month mark during the last two months, will remain "good" in the coming days. "The government has been regularly taking steps to help sectors which are facing challenges. Without waiting for the Budget, we are taking the steps," the minister said at a press conference here. She also said that credit was made available to people through non-banking financial companies and banks during the festive season of Navratri and Diwali.

7. ITR-1 Income Tax Returns Modification: In significant changes in income tax return filing forms, individual taxpayers owning house property in joint ownership and those who have paid Rs 1 lakh in electricity bills in a year or incurred Rs 2 lakh expense on foreign travel cannot file their annual income return using the simple ITR-1 form. The government, which usually notifies forms for filing income tax returns by individuals in April every year, on January 3 notified tax return forms for the assessment year 2020-21 (income earning year April 1, 2019, to March 31, 2020). Returns in ITR-1 Sahaj can be filed by an ordinarily resident individual whose total income does not exceed Rs 50 lakh, while Form ITR-4 Sugam is meant for resident individuals. Secondly, ITR-1 form is not valid for those individuals who have deposited more than Rs 1 crore in bank account or have incurred Rs 2 lakh or Rs 1 lakh on foreign travel or electricity respectively, it said. Such taxpayers will have to use different forms, which will be notified in due course.

8. Financial Statement Reporting Norms: Unlisted companies might soon be required to submit their financial statements to the government on a quarterly or half-yearly basis, according to an official. There are more than 11 lakh unlisted companies that are active in the country and the proposal also assumes significance against the backdrop of instances of financial woes at some large unlisted entities. The corporate affairs ministry is looking at introducing provisions in the companies law that would require unlisted firms to furnish financial statements every three months or six months. The aim is to have updated financial details about systemically-important companies that are not listed, the official told PTI. Listed companies are required to disclose their financials every three months under Sebi regulations.

9. No Capital Infusion For PSU Banks: The government is unlikely to announce capital infusion for the public sector banks (PSBs) in the upcoming Budget and will rather encourage them to expedite the recovery of bad loans and raise funds from the market.

Besides, sources said, banks may also look for divesting or selling their non-core business as part of fundraising exercise during 2020-21. According to sources, banks have a robust pipeline of recovery from the resolution of both NCLT and non-NCLT cases during this calendar year and also headroom for raising capital from the market. The provision coverage ratio of public sector banks is at a 7-year high of 76.6 percent. In some of the non-performing assets, banks have done provisions up to 100 percent, sources said, adding that recovery from those account will straightaway form part of the bottom line.

10. New Legislation For Social Impact Companies: The government is considering a new law for setting up social impact companies, where profits can be distributed among the shareholders. An official said having such companies would help in attracting private capital towards developmental activities in the country. The corporate affairs ministry is working on a new concept for having social impact companies and the plan is to have a separate legislation in this regard, the official told PTI. Social impact or community interest companies are there in many Western jurisdictions, including the UK. The larger idea is to attract private capital into companies that do social good and work towards achieving sustainable development goals, the official said.