10 things you need to know before the opening bell on November 4

SUMMARY

The Indian market is likely to remain volatile on Wednesday as investors will keenly watch developments over the results of the US presidential elections. At 7:35 am, the SGX Nifty was trading 46.75 points or 0.39 percent lower at 11,802.50, indicating a negative start for the Sensex and Nifty50.

By CNBCTV18.comNov 4, 2020 8:29:14 AM IST (Updated)

1. Asia: Stocks in Asia-Pacific were mostly higher in Wednesday morning trade as investors in Asia-Pacific wait for the result of the U.S. presidential election between incumbent Donald Trump and former Vice President Joe Biden. In Japan, the Nikkei 225 rose 0.95 percent while the Topix index advanced 0.76%. South Korea’s Kospi also gained 0.67 percent. Meanwhile, shares in Australia dipped, as the S&P/ASX 200 shed around 0.2 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan traded 0.11 percent higher, reported CNBC International. (Representative Image)

2. US: Stock futures were flat on Tuesday night following a sharp rally during regular trading while investors awaited the result of the presidential election. Dow Jones Industrial Average futures traded 56 points lower, or 0.2 percent. S&P 500 futures dipped 0.1 percent, and Nasdaq 100 futures rose slightly. Earlier in the evening, Dow futures had jumped more than 250 points, reported CNBC International.

3. Closing Bell On Tuesday: Indian shares ended over a percent higher on Tuesday, as factory activity data signalled a recovery in demand after coronavirus-led disruptions. The gains were mainly supported by a rise in banking and financial stocks. The Sensex ended 503 points higher at 40,261 while the Nifty rose 144 points to settle at 11,813. Broader markets were mixed for the day with the Nifty Midcap up 0.6 percent and the Nifty Smallcap index was flat. ICICI Bank, Hindalco, SBI, Powergrid, and HDFC were the top gainers on the Nifty50 index while UPL, NTPC, Reliance Industries, Nestle, and HUL led the losses.

4. Crude Oil: Oil prices rose over 2 percent on Tuesday, advancing with other financial markets on U.S. Election Day although traders were bracing for volatility depending on the voting results and as surging coronavirus cases around the world fed worries about fuel demand. Brent futures rose 84 cents, or 2.2 percent, to $39.81 a barrel, while U.S. West Texas Intermediate (WTI) crude settled 85 cents, or 2.3 percent, higher at $37.66 per barrel, reported CNBC International.

5. Rupee: The rupee pared its early gains to close almost flat at 74.41 on Tuesday due to dollar buying by banks and resurging crude oil prices. The rupee opened sharply higher at 74.34 amid heavy buying in local stock markets and raced to hit the day’s high of 74.25, reported PTI.

6. India To Participate In Five Summits: November seems to be a month of for international summits. India is all geared up to participate in five of them. All these summits will be virtual, keeping in mind the coronavirus pandemic. In three out of these five summits, Prime Minister Narendra Modi will be coming face-to-face with China's President Xi Jinping, amid the border tensions revolving around Eastern Ladakh. The five summits are Shanghai Cooperation Organisation, ASEAN Summit, BRICS Summit, G-20 Summit and Shanghai Cooperation Organisation.

7. Ex-RBI Governors Warn Of NPAs Delaying Recovery: Domestic banks, which have the highest bad loan pile in the world, pose a huge risk to the recovery of the pandemic-ravaged economy unless the government rescues them, four former Reserve Bank governors warn in a soon-to-be-released book. While Raghuram Rajan blames excessive investments by companies and the exuberance of bankers, coupled with inability to act fast as the prime causes for NPAs (Non-Performing Assets), Yaga Venugopal Reddy opines that the bad loans are not only a problem but a consequence of other problems. Duvvuri Subbarao sees NPAs as a big and real problem that needs to be contained, and Chakravarthy Rangarajan blames the lingering real sector problems, partly policy-driven most recently seen with demonetisation, aggravated the crisis.

8. RBI: The Reserve Bank of India is looking at diversifying its foreign exchange reserve investments amid the fall in global interest rates caused by the COVID-19 pandemic, according to two government sources aware of the development. The RBI’s foreign exchange reserves stand at a record USD 560.63 billion. The central bank, which mostly invests in gold, sovereign debt and other risk-free deposits, has seen returns fall as monetary policy loosened globally. US two-year government bonds ended at 0.16 percent on Nov. 2. As a result, the RBI is likely to increase its gold investments, as well buying dollars and exploring investing in AAA-rated corporate bonds for the first time, said the sources, who declined to be named due to the sensitivity of the issue.

9. PMC Bank: Fraud-hit Punjab and Maharashtra Co-operative Bank today invited proposals for equity investments from suitors to aid the bank’s reconstruction. In a public notice, the bank said any party that takes over the bank could consider converting the beleaguered entity into a small finance bank, subject to RBI's approval. “[The] objective of the process of invitation of EoI is to identify a suitable equity investor/group of investors willing to take over management control so as to revive the bank and commence regular day-to-day operations,” the bank said in its notice. “Subsequent to commencement of the normal day-to-day operations, it will be open for the investor(s) to convert the bank into a Small Finance Bank by making an application to Reserve Bank of India subject to compliance of the RBI guidelines,” it said. (Company Image)

10. Report On Borrowed Money In Households: Around 46 percent of the population borrowed money primarily to run their households during the ongoing pandemic, according to a Home Credit India survey. Home Credit India -- a local arm of the international consumer finance provider with operations spanning over Europe and Asia -- conducted research across seven cities, to understand the borrowing patterns of people during the COVID lockdown. "The ongoing pandemic has had a drastic impact on the economy and people across the strata of society. With job losses and pay cuts across industries, the lower-middle-income group has been affected severely. The pandemic has led to a shift in perspective towards loans and borrowing preferences," the consumer finance provider said. On the reasons for borrowing, the survey cited the impact of the pay cuts/delays as one of the biggest reasons.

2020 US Elections: With polls closed across the East Coast, President Donald Trump and Democrat challenger Joe Biden are projected to win in their states, while the focus shifts to key states such as Florida, Georgia and North Carolina. Biden has won in Virginia, Illinois, Maryland, Massachusetts while Trump is home in states like Mississippi, Alabama, South Carolina and Tennessee, according to NYT. Meanwhile, Trump is leading in Florida, Michigan, while Biden ahead in North Carolina, Pennsylvania.