10 things you need to know before the opening bell on September 19

SUMMARY

Indian shares are likely to open little changed on Thursday in line with muted trades in global markets after US Federal Bank gave mixed signals on its next course of action for the year. Global equity markets edged higher following the US Fed’s decision to cut rates. At 7:00 am, the SGX Nifty futures traded 0.06 percent, or 6 points, up at 10,856.50, indicating a flat start for the Sensex and the Nifty.

By CNBC-TV18Sept 19, 2019 7:38:37 AM IST (Updated)

1. Asia: Asian shares edged higher on Thursday, tracking some modest Wall Street gains after the US Federal Reserve cut interest rates as expected but offered mixed signals on the next easing, keeping investors cautious. MSCI's broadest index of Asia-Pacific shares outside Japan was 0.03 percent. Japan's Nikkei rose 0.46 percent, while Australian shares rose 0.23 percent.

2. US: The S&P 500 and the Dow reversed losses to close higher on Wednesday and US Treasury yields slipped after remarks by Federal Reserve Chair Jerome Powell tempered the market's initial reaction to the US central bank's policy statement. The Dow Jones Industrial Average edged up 0.13 percent to end at 27,148.08 points, while the S&P 500 gained 0.03 percent to 3,006.73. The Nasdaq Composite dropped 0.11 percent to 8,177.39.

3. Markets at close on Wednesday: Indian shares closed marginally higher on Wednesday as oil prices fell after Saudi Arabia said it will restore lost oil production by the end of the month, which was lost in weekend attacks on its facilities. The Sensex ended 83 points higher at 36,564, while the broader Nifty50 index added 23 points to end the day at 10,841. Meanwhile, foreign institutional investors sold Rs 959 crore in the cash market while domestic institutional investors bought Rs 780 crore. Snapping its two-day falling streak, the rupee rebounded 54 paise to finish at 71.24 against the US dollar on Wednesday as sliding crude oil prices eased pressure off emerging market currencies.

4. Crude Oil: US crude futures ticked up 0.03 percent to $58.13 per barrel. Oil markets have stabilised after attacks on Saudi Arabia over the weekend triggered a supply shock and sent prices soaring, but the volatility is still a risk as Middle East tensions remain high. Brent crude futures were below the flatline at $63.58 per barrel and US crude futures gaining 0.1 percent to $58.17 per barrel.

5. Cabinet On New Norms: The Union Cabinet in its meeting on Wednesday approved the banning of e-cigarettes, and 78 days' wages as a bonus for railway employees. Finance minister Nirmala Sitharaman announcing the ban said that production, manufacturing, import, export, storage, distribution, and transport of e-cigarettes will be banned in the country and an ordinance will be promulgated soon to the effect. Union Minister Prakash Javadekar announced that the bonus was a reward to the productivity of the employees. (File Photo: IANS)

6. Government On Open Cell TV Panels: The television industry has welcomed the government's decision to scrap the customs duty on import of open cell TV panels, saying the move will boost domestic manufacturing. In a late-night notification on Tuesday, the finance ministry said "open cell, (15.6 inches and above), for use in the manufacture of Liquid Crystal Display (LCD) and Light Emitting Diode (LED) TV panel", would attract nil duty. TV makers say the move will help them reduce the manufacturing cost by up to 3 percent, however, consumer prices are expected to remain same. (Representational Image)

7. Moody's On Consumer Credit: Reduction in the risk weight on consumer credit by the Reserve Bank of India is credit negative as it may lead to increased exposure by lenders to this loan segment, says a report. The Central bank on September 12 announced the reduction in the risk weight for consumer credit, including personal loans, but excluding credit card receivables, to 100 percent from 125 percent. "The reduction in the risk weight on consumer credit is credit negative as it will encourage banks to increase their exposure to this loan segment at a time when credit risks are already increasing from a slowing economy," global rating agency Moody's said in a note. It will lower the capital requirements and thus the loss-absorbing buffer on these loans, the agency said.

8. New Advisory Board For Bank Frauds: Anti-corruption agency CVC has set up the Advisory Board for Banking Frauds, headed by former Vigilance Commissioner T M Bhasin, to examine bank frauds of over Rs 50 crore and recommend actions, in line with Finance Minister Nirmala Sitharaman's call for protecting honest decision making. This development will instill a sense of protection among bankers from prosecution for genuine decisions, and promote lending. It will decide whether the case is a criminal act or a genuine commercial decision and accordingly, recommend the future course of action. When asked about the move of the Central Vigilance Commission (CVC), Finance Secretary Rajiv Kumar said this will enable bankers to take genuine and commercially prudent decision without fear.

9. RBI On NBFCs, HFCs: After mandating banks to link their new retail loans to an external benchmark, the Reserve Bank is now looking at structuring the interest rate regime for housing finance companies and shadow bankers, which together control over a fifth of the credit market, for better transmission, according to a source. Unlike banks, HFCs and NBFCs do not have any 'anchor rate' or a uniform interest rate-determining structure, the source added noting that at present there is no mandate by the RBI for these players to have such rate. He said the issue of linking of HFCs' and NBFCs' interest rate to an external benchmark was discussed when the central bank was looking at external benchmarks for banks.

10. Tax Collection Misses Target: As against a steep 17.5 percent higher tax collection budgeted for the full year, the government could mop-up only 4.7 percent more so far this year, with the direct tax kitty growing to Rs 5.50 lakh crore as of September 17, up from Rs 5.25 lakh crore a year ago. The lower tax collections reflect the deepening slump in demand and overall growth. In the first quarter, India's gross domestic product (GDP) growth slowed to a six-year low of 5 percent. It can be noted that the budget had set a direct tax mop-up target of 17.5 percent for the full year, while the same for indirect taxes are set at 15 percent. (Representational Image)