The best way to deal with stock market bubbles is to get in early and get out before the peak. It's definitely not early any more to get in, but there appears to be two views on whether we are nearing the peak. One is that stock valuations have become expensive and the market's inability to sustain at higher levels suggests the time has come to get out. The other view is that with the economy not fully opened, the glut of liquidity floating around will keep on inflating asset prices till the point central banks and governments run out of fuel. The US is about to pump in more cash. This is why action has now shifted to the broader market as Nifty develops fatigue. No matter which argument you buy, it surely is the time to protect the profits if you want to stay with the momentum!
MARKET CUES: Where do we stand >>>  | Nifty futures on the Singapore Exchange traded just 8 points higher at 7 am (IST) this morning, signaling indecisiveness on Dalal Street. |
| On Friday, Nifty50 formed a small bullish candle on the daily chart and a pattern resembling a Hanging Man candle on the weekly scale. Analysts said a breach of the 11,240-250 range may help the index rally towards the 11,340 level. |
| Asian stocks were on the backfoot this morning. Shares in China and Hong Kong opened lower, while those in South Korea and Australia climbed. Japan and Singapore are shut for holidays. |
| Wall Street's big rally let off the accelerator on Friday, despite a better-than-expected report on the US job market. The S&P500 inched up 2.12 points and Dow added 46.50 points, but the Nasdaq dropped 97.09 points, or 0.9%, after setting a record on Thursday. |
| The rupee ended almost flat at 74.93 against the US dollar on Friday amid caution in the forex market in view of mounting coronavirus cases and US-China trade tensions. |
| In currencies, the dollar traded steady at the start of the week, but eased on the safe haven Japanese yen while the Aussie dollar nursed its losses after falling 1.1% on Friday. The British pound was a tad lower at $1.3057 after hitting a five-month high last week. The euro hovered near its highest since May 2018. |
| Oil prices climbed in early trade on Monday, clawing back over half of Friday's losses, on hopes for a stimulus deal to shore up the US economic recovery and a pledge from Iraq to deepen its crude oil supply cuts. WTI crude futures rose 49 cents, or 1.2%, to $41.71 a barrel, while Brent rose 40 cents, or 0.9%, to $44.80. |
| Domestic gold prices rose to Rs 59,300 per 10 gm, while silver climbed to Rs 74,210 a kg. On Friday, August gold futures fell 1.89 per cent to Rs 54,789 on MCS while silver September futures closed at Rs 74,160. In international markets, the yellow metal slumped over 2 per cent on Friday, snapping its record-breaking rally. |
| LOOK WHO'S |  |
Stockbrokers smile amid Covid crisis… Indian stock brokers have emerged the single largest beneficiaries of the social and economic disruption resulting from the Covid-19 pandemic and also the work-from-home norm during the lockdown. Brokers have reported an average 30%-plus year-on-year growth in revenues and over 50% jump in profits in the June quarter. For the first time, NSE's quarterly revenue crossed Rs 1,000 crore with a YoY jump of 32% at Rs 1,074 crore for April to June period. Its profits were up 66% at Rs 706 crore.
Read More India's Motown on a hiring spree… The Indian auto industry's recent fillip to sales propelled by the pent-up demand released after the lockdown was eased has seen a number of fresh job positions opening up in the segment. Hiring activity recovered in terms of demand for white collar and blue collar workers in July from the slump hit in March and April, data from job sites and staffing consultants showed. Month-on-month hiring growth trend that hit a trough of - 72% in April, rose to 28% in May and peaked at 71% in June before stabilising at 8% in July, shows an analysis by Naukri.com.
Read More FDI mandate to RBI to aid foreign investors… Foreign investors could experience an improved ease of doing business environment in the coming days and weeks after the government's rule change gave the RBI greater say in administering all issues relating to FDI, which would include allowing the central bank to interpret various rules and grant exemptions pertaining to FDI. The rule change applies only to foreign direct investment and not to foreign portfolio investment which is purchase of shares in the secondary market.
Read More PM unveils agri infra fund… Prime Minister Narendra Modi on Sunday launched a Rs 1 lakh crore Agriculture Infrastructure Fund to support community farming assets across the country and said this would enhance India's ability to compete globally in the agriculture sector. The farm infrastructure will enable farmers get higher value for their produce as they will be able to store and sell at better prices as per market conditions, reduce wastage and increase processing and value addition. Modi also released Rs 17,000 crore to nearly 8.5 crore farmers under the sixth instalment of the PM-Kisan scheme.
Read More | AND WHO'S |  |
Buffett indicator signals pricey markets… The global market cap-to-GDP ratio has crossed 100% for the first time since January this year, indicating investors' bullishness and overvaluation due to fiscal spending and central bank money printing. The ratio, which is a favourite of billionaire investor Warren Buffet, is about 64% higher than the historical average. In the past, global markets have corrected sharply in three such instances of the ratio crossing 100%; in 2000, 2008 and 2018. Countries like China, India, France and Germany have seen a decline in the ratio in last one year.
Read More State-level indicators signal slowing revival… State-level economic indicators such as GST collections and electricity demand show key industrial states such as Gujarat, Maharashtra, Karnataka and Tamil Nadu have seen a slowing of business activity in July from the month before. Only a few states — Rajasthan, Madhya Pradesh, Uttar Pradesh and Uttarakhand — have shown steady recovery from April, when the nationwide lockdown had the biggest economic impact. Google mobility indicators are, however, up for most of these states in July over June.
Read More Govt majorly trims defence imports list… The government on Sunday announced a negative arms imports list, under which acquisition of 101 weapon systems and platforms from abroad will be progressively banned from December 2020 to December 2025, in a bid to bolster the fledgling domestic defence production sector. The 101 items, with different embargo timelines, range from some types of ammunition, sonars, radars, artillery guns and assault rifles to missile destroyers, transport aircraft, light combat helicopters, wheeled armoured fighting vehicles, conventional diesel-electric submarines and communication satellites.
Read More Tech biggies set to oppose India data regulation… India's plan to regulate "non-personal" data has jolted US tech giants Amazon, Facebook and Google, and a group representing them is preparing to push back against the proposals, according to sources and a letter seen by Reuters. A government-appointed panel in July recommended setting up a regulator for information that is anonymised or devoid of personal details but critical for companies to build their businesses.
Read More Meanwhile... Trump bypasses Congress on Covid aid... US President Donald Trump signed executive orders on Saturday partly restoring enhanced unemployment payments to the tens of millions of Americans who lost jobs in the coronavirus pandemic, as the US marked a grim milestone of 5 million cases. He said the orders would provide an extra $400 per week in unemployment payments, less than the $600 per week passed earlier in the crisis. Negotiations broke down this week between the White House and top Democrats over how best to help Americans cope with the heavy human and economic toll of the crisis.
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