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Indian Stock Markets To Be Under Pressure; ICICI Bank In Focus

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The US and Chinese trade negotiators will meet in Shanghai this week for their first in-person talks since a G20 truce last month, but expectations are low for a breakthrough.

Indian stock markets would be under pressure on Monday tracking weak global cues.

Asian shares went down on Monday as markets anxiously counted down to a likely cut in US interest rates this week.

The US and Chinese trade negotiators will meet in Shanghai this week for their first in-person talks since a G20 truce last month, but expectations are low for a breakthrough. Data on the weekend showed profits earned by China’s industrial firms contracted in June, fuelling concerns that the bruising trade war will drag on economic growth.

MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.4% in slow trade. Japan’s Nikkei dipped 0.5% and Shanghai blue chips 0.2%. More important will be what the central bank flags for the future, given the market implies 100 basis points of easing over the next year or so.

Back home, shares of ICICI Bank are likely to be in focus after it reported Its June quarter earnings on Saturday. The bank posted a standalone net profit of ₹1,908 crore in the June quarter of FY20, against a loss of ₹120 crore in the same period last year, owing to higher net interest income (NII) and lower provisions. Its net interest income (NII), the difference between interest earned and interest expended, rose 27% year-on-year (y-o-y) to ₹7,737 crore in the first quarter of FY20.

Auto shares are may also be in the spotlight as the GST council has put electric vehicles on the 5% slab from 12% earlier. This decision of the government along with other policy measures are aimed at promoting electric mobility in the country.

Major companies which will announce June quarter results are Dr Reddy’s Laboratories, DLF, Bank of Maharashtra, General Insurance Corporation of India and Bharat Electronics among others.

In the primary market, mobile marketing firm Affle India will open its initial public offering (IPO) for subscription on 29 July. The three-day sale will close on 31 July. The company aims to raise ₹ ₹459 crore with the issue priced at ₹740-745 per share.

The dollar hit a two-month peak on a basket of currencies at 98.010, and was last trading at 97.921.

The euro stood at $1.1133 on Monday, just above last week’s two-year trough around $1.1102, while the dollar edged back to 108.48 yen. The dollar had got a helping hand from White House economic adviser Larry Kudlow who on Friday said the Trump administration had “ruled out” intervening to push it lower.

Sterling was pinned near 27-month lows around $1.2375 amid reports the government of Prime Minister Boris Johnson was preparing the ground for a “no-deal” Brexit.

Spot gold was 0.3% firmer at $1,422.55 per ounce, supported by low bond yields globally.

Oil prices drifted down in early trade pressured by the usual concerns about over supply and slowing world demand.

Brent crude futures eased 23 cents to $63.23, while US crude lost 8 cents to $56.12 a barrel.