Market Ahead, September 1: All you need to know before the opening bell

A historic contraction in Q1 GDP growth will be the key trigger for the markets today. Besides, the Supreme Court's judgement on AGR dues and geo-political concerns might keep the markets volatile while the release of Manufacturing PMI data and August auto sales will be keenly tracked. The implementation of the new margin rules from today is also expected to impact the market trend.

Official data released after market hours yesterday showed that the Indian economy, which has been reeling from the impact of Covid-19, had contracted at its steepest-ever pace of 23.9 per cent year-on-year in the June quarter.

According to the data released by the National Statistical Office, private consumer spending got chipped by 27 per cent in Q1, while investments contracted by the worst-ever 47 per cent. The damage visible across all areas of the economy was countered by two indicators. The gross value added in agriculture grew by 3.4 per cent on a year-on-year basis. On the demand side, while consumer spending and investments declined massively, government spending grew by 16 per cent.

Meanwhile, for April to July, the Centre’s fiscal deficit stood at Rs 8.21 trillion, or 103 per cent of FY21 budget estimates, compared to 77.8 per cent for the same period last year. The fiscal deficit for Q1 came in at 17.4 per cent of nominal GDP. 

The RBI stepped in on Monday with a number of measures that would boost demand for government bonds and keep yields under check and improve liquidity in the system. The central bank increased the held to maturity limit of banks substantially and also said it would conduct another round of special open market operations, under which it would simultaneously buy and sell bonds worth Rs 20,000 crore in two tranches.

The central bank also said it remained “committed to ensuring comfortable liquidity and financing conditions in the economy.”

Market participants will today await the release of Manufacturing PMI data.

Telecom stocks and financials are set to trade actively today as Justice Arun Mishra-led Supreme Court bench will pronounce the much awaited AGR dues' verdict relating to telecom companies at 11:30 am. Justice Mishra will pronounce key judgements in the case involving timelines for payment of AGR dues by telcos, which might decide the fortunes of Vodafone Idea in particular.

Auto stocks will also react to their sales numbers for August which will start pouring in from today.

Apart from these, a total of 37 companies including ONGC, Shalimar Paints are scheduled to announce their June quarter earnings today which might induce stock-specific moves.

On the Covid front, India yesterday recorded its worst-ever single-day spike of 79,457 new cases, taking its total caseload to 36.87 lakh. The country's death toll now stands at 65,435.

And now, a quick look at today's trade setup. The SGX Nifty, which is trading around 50 points up, is indicating a positive start for the Indian markets. In the US, the Dow Jones fell 0.8 per cent overnight, the S&P 500 lost 0.23 per cent, while the Nasdaq added 0.68 per cent. Asian stocks were also mixed on Tuesday. Australia’s ASX 200 lost 2 per cent in early trading, while Japan’s Nikkei and Hong Kong's index were flat in early deals.