10 things you need to know before the opening bell on January 7

SUMMARY

Indian benchmark indices BSE Sensex and NSE’s Nifty50 are likely to open little changed on Friday, tracing flat trades in global markets over rising concerns of coronavirus in China. However, the RBI’s move to provide further credit support to ailing sectors may aid markets. At 7:14 am, the SGX Nifty was trading 3 points or 0.02 percent lower at 12,126.50, hinting at a flat beginning for the Sensex and Nifty50.

By CNBC-TV18Feb 7, 2020 7:59:27 AM IST (Updated)

1. Asia: A mid-week rally in Asian share markets halted on Friday and oil prices steadied as the growing death toll and economic damage from a new virus spreading from China curbed further gains. Japan's Nikkei and Korea's Kospi headed lower in morning trade, but are on track for their best week of the year after earlier rises. MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.5 percent on Friday as the lingering anxiety over the virus outbreak tempered the mood, though it is still up 3.2 percent for the week.

2. US: U.S. stocks gained for a fourth straight session on Thursday and Wall Street's main indexes hit record highs as concerns eased over the economic fallout from the coronavirus outbreak in China. The Dow Jones Industrial Average rose 88.92 points, or 0.3 percent, to 29,379.77, the S&P 500 gained 11.09 points, or 0.33 percent, to 3,345.78 and the Nasdaq Composite added 63.47 points, or 0.67 percent, to 9,572.15.

3. Market At Close On Thursday: Indian markets ended higher on Thursday as the Reserve Bank of India (RBI) maintained status quo on key policy rates and announced certain relief measures for real estate and Micro, Small and Medium Enterprises (MSME) sectors. The BSE Sensex ended 163 points higher at 41,306, while the Nifty50 index settled 49 points at 12,138. Meanwhile, foreign institutional investors sold Rs 560 crore in the cash market while the domestic institutional investors bought Rs 304 crore.

4. Rupee Close: The rupee on Thursday rose by 6 paise to close at 71.19 against the US dollar after the RBI left the policy rates unchanged but maintained its accommodative stance to boost growth. Investor sentiments strengthened after the Reserve Bank of India signalled to continue with accommodative stance, while low crude oil prices, weakening of the US dollar and gains in domestic equity market supported the domestic currency, forex traders said. At the interbank foreign exchange market, the local currency opened on a positive note at 71.22. During the day, it saw a high of 71.11 and a low of 71.30.

5. Crude Oil: Oil prices rose on Friday after Russia said it backs a recommendation for the OPEC and its producer allies to deepen output cuts amid contracting demand for crude as China battles the coronavirus epidemic that has hit global markets. Brent crude futures rose 32 cents, or 0.6 percent, to $55.25 a barrel by 0104, after falling 0.6 percent on Thursday. U.S. West Texas Intermediate (WTI) crude futures were up 26 cents, or 0.5 percent, at $51.21 a barrel, having gained 0.4 & the previous session.

6. RBI Holds Rates: The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) kept the repo rate unchanged in the February policy, the last of the current financial year and the first of the new decade, on the back of rising retail inflation. This is the second time in a row that the central bank has left the repo rate unchanged. With no change again, the repo rate stands at 5.15 percent. The central bank has maintained its policy stance at “accommodative” which could continue for as long as necessary to revive growth. The reverse repo rate has been maintained at 4.90 percent. All six MPC members have voted in favour of the policy move.

7. SEBI's Guidelines For AIFs: Markets watchdog Sebi on Thursday came out with guidelines for compulsory performance benchmarking for Alternative Investment Funds (AIFs) as part of efforts to streamline disclosure standards. The PPM would have two parts -- a section for minimum disclosures and a supplementary section to provide any additional information. In a circular, the regulator said it has been decided to introduce the template for PPM, subject to certain exemptions, as well as put in place mandatory performance benchmarking for AIFs. Besides, there are provisions for additional customized performance reporting requirements. Sebi has also given operational guidelines for mandatory performance benchmarking of AIFs, including venture capital funds and the AIF industry.

8. RBI Extends Benefits For MSME: The Reserve Bank of India (RBI), in its sixth bi-monthly monetary policy meet on Thursday, decided to extend the benefit of one-time restructuring without an asset classification downgrade to standard accounts of GST registered Micro, Small and Medium Enterprises (MSME) that were in default as on January 1, 2020. The restructuring under the scheme has to be implemented latest by December 31, 2020. This will benefit the eligible MSME entities which could not be restructured under the provisions of the circular dated January 1, 2019, as also the MSME entities which have become stressed thereafter.

9. Bankers On India's Credit Growth: The country needs to double credit growth to 15 percent to become a USD 5 trillion economy by 2024-25, say bankers. "If you want to reach a USD 5 trillion economy, the outstanding credit, which is around Rs 95-98 trillion, it will have to be doubled, which means we need to grow (credit) at around 15 percent," State Bank of India's Chairman Rajnish Kumar said at an IBA event. Echoing his views, Union Bank of India's Managing Director and CEO Rajkiran Rai G said for a USD 5 trillion economy, credit growth has to be more than 15 percent per annum. " (Stock Image)

10. Realty Players Happy With Credit Flow Boost: Real estate players on Thursday hailed the RBI's monetary policy despite no change in key lending rates and said the measures taken to boost credit flow for stressed housing segment, as well as the commercial property market, would help cash-starved builders. However, the real estate industry is relieved as the RBI has taken two surprising decisions to help the industry by allowing lenders to pool in the Cash Reserve Ration (CRR) buffer to lend at a cheaper rate for housing loans and giving a one-year extension for date of commencement for project loans for commercial real estate projects.