Key indices may open sharply higher on strong Asian stocks. Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could jump 101 points at the opening bell.
In overseas stock markets, Japanese stocks led gains in Asian stocks as investors saw solid poll results for Japan's upper house as signaling new rounds of economic and political reforms by the coalition government led by Prime Minister Shinzo Abe. The Nikkei 225 was up 3.55% as exit pols showed the government increasing its majority in the upper house. US stocks rose on Friday, 8 July 2016 after robust job gains last months bolstered investor sentiment on the strength of the economy. In economic data, US employers in June added a seasonally adjusted 287,000 jobs, the strongest month of hiring since last October, according to the Labor Department report. That was a sharp rebound from May, when hiring sagged to 11,000, the weakest reading since the economy stopped shedding jobs in 2010. Another data showed that the unemployment rate, calculated from a separate survey of US households, rose to 4.9% in June from 4.7% in May, partly retracing its drop from 5% in April.
Closer home, foreign portfolio investors (FPIs) bought shares worth a net Rs 330.62 crore on Friday, 8 July 2016, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 512.67 crore on Friday, 8 July 2016, as per provisional data.
Shares of Axis Bank, ITC and L&T will be in focus as media reports suggested that the central government has finally made up its mind to sell minority stakes held in many listed and unlisted companies through the Specified Undertaking of the Unit Trust of India (SUUTI), in a bid to meet its asset-sale target. The government invited bids from bankers for the mandate to manage the stake-sale process, reports suggested.
SUUTI held 11.53% stake in Axis Bank, 11.14% in ITC and 8.15% stake in L&T as per the shareholding pattern as on 31 March 2016.
Shares of IndusInd Bank will be in spotlight as the bank is scheduled to announce its Q1 June 2016 earnings today, 11 July 2016.
Shares of Wipro turn ex-dividend today, 11 July 2016, for final dividend of Re 1 per share for the year ended 31 March 2016.
Shares of engineering and construction major L&T will be in focus as the company's subsidiary and IT outsourcing services provider Larsen & Toubro Infotech known as L&T Infotech's initial public offer (IPO) commences today, 11 July 2016. L&T Infotech's promoter L&T is selling a part of its stake through the IPO of L&T Infotech. L&T Infotech will not get any funds from the IPO and the entire sale proceeds will go to parent L&T. L&T is selling 1.75 crore shares of L&T Infotech through the IPO. The price band for the IPO has been fixed at Rs 705-710 per share. The IPO opens for bidding today, 11 July 2016 and closes on Wednesday, 13 July 2016.
Bharti Airtel yesterday, 10 July 2016 announced that the transaction for acquisition of rights to use 20 MHz 2300 Band 4G TD spectrum from Aircel was successfully concluded for 6 out of 8 circles barring Andhra Pradesh and Orissa, following the receipt of all necessary approvals and satisfying all the conditions. Bharti Airtel said it will update the exchanges when the transactions for the remaining circles of Andhra Pradesh and Orissa are completed.
IT stocks may edge lower on media reports that a bipartisan group of two US lawmakers has introduced in the House of Representatives a legislation, which if passed by the Congress would prevent Indian companies from hiring IT professionals on H-1B and L1 work visas. US is the biggest outsourcing market for Indian IT firms. The revenue model of many large-cap Indian IT companies is heavily dependent on H-1B and L1 visas in the US.
The H-1B is a non-immigrant visa in the United States which allows US employers to temporarily employ foreign workers in specialty occupations. The US L1 visa is a non-immigrant visa which allows companies operating both in the US and abroad to transfer certain classes of employee from its foreign operations to the US operations for up to seven years.
Tata Steel after trading hours on Friday, 8 July 2016, announced that it has entered into discussions with strategic players in the steel industry, including Thyssenkrupp AG for a strategic collaboration for its European businesses. The decision has been taken as an alternative to the ongoing process for the divestment of loss making Tata Steel UK. Tata Steel said that the discussions for strategic collaboration are currently at preliminary stage and there is no certainty of a transaction as the outcome depends on consultation and negotiations with various stakeholders. Tata Steel also said it would begin separate processes for the sale of its South Yorkshire specialty steels business and the Hartlepool pipe mills, excluding the 20-inch tube mill, in the UK. Tata Steel has already received interest from several bidders for these two businesses and the formal process for the sale of the businesses will commence shortly.
Shares of Punjab National Bank (PNB) will be in focus after the Reserve Bank of India (RBI) notified on Friday, 8 July 2016 that the aggregate foreign share holding by Foreign Institutional Investors (FIIs)/Registered Foreign Portfolios Investors (RFPIs)/Non Resident Indian (NRI)/Persons of Indian Origin (PIO)/Foreign Direct Investment (FDI)/American Depository Receipts (ADR)/Global Depository Receipts (GDR) under Portfolio Investment Scheme (PIS) in PNB has gone below the prescribed threshold caution limit stipulated under the extant FDI policy. Hence, the restrictions placed on the purchase of shares of PNB are withdrawn with immediate effect.
Equity mutual fund schemes including tax saving equity schemes known as Equity Linked Saving Schemes (ELSS) received net inflow of Rs 320 crore in June 2016, as per the monthly data released by the Association of Mutual Funds in India (AMFI). The inflow would have been much higher if one excludes large redemption of arbitrage funds. Media reports suggest that there was redemption of Rs 3500 crore from arbitrage funds in June 2016. AMFI does not give separate data on arbitrage funds. It clubs arbitrage funds under the equity fund category. Meanwhile, balanced funds received net inflow of Rs 2402 crore in June 2016. Balanced funds typically have 65-70% of their portfolio invested in equities and 30-35% in debt.
Key benchmark indices settled lower on Friday, 8 July 2016 with investors maintaining caution ahead of the US jobs data to get a clearer picture of the health of the world's biggest economy. The Sensex shed 74.59 points or 0.27% to settle at 27,126.90, its lowest closing level since 30 June 2016.
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