Before heading into Tuesday's trade, investors are likely to take an account of the overnight developments in the global markets. Asian shares and US stock futures slipped in early trade amid signs of pessimism about world growth. The International Monetary Fund (IMF) cut its 2019 and 2020 global growth forecasts, citing a bigger-than-expected slowdown in China and the Eurozone, and said failure to resolve trade tensions could further destabilize a slowing global economy.
Apart from this, corporate earnings for December quarter, movement in currency and crude oil are likely to sway investor sentiment today.
Nifty futures on Singapore Exchange (SGX) were trading at 10,968.50, up 6 points or 0.05 per cent in early trade.
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The rupee Monday weakened by 9 paise to close at 71.28 against the US dollar amid rise in demand for the greenback from exporters and unabated foreign fund outflows.
Over 25 companies including Asian Paints, TVS Motor Company, Shree Cement, ICICI Prudential Life Insurance Company, Reliance Nippon Life Asset Management, HDFC Standard Life Insurance Company, Oberoi Realty, Havells India are slated to announce their December quarter results.
MSCI’s broadest index of Asia-Pacific shares outside Japan eased 0.1 per cent but was still within striking distance of a seven-week top touched the previous day. Japan's Nikkei gained 0.2 per cent, helped by a recent pullback in the yen.
On Wall Street, the Dow Jones Industrial Average rose 336.25 points or 1.38 per cent to 24,706.35, S&P 500 climbed 34 points or 1.3 per cent to 2,670.71 and Nasdaq Composite closed flat at 7,157.23.
Oil prices edged up on Monday, reversing earlier losses, as investors shrugged off data that confirmed China’s economic growth is cooling and instead latched on to positive supply-side drivers for the market.
Brent crude oil futures were up 12 cents at $62.83 a barrel, while US crude futures were up 19 cents to $53.99 a barrel.
With major deal wins, L&T Infotech expected to beat peers in the near term
Led by ramp-up of major deal wins, large digital portfolio and strong execution, Larsen & Toubro (L&T) Infotech beat peers on the growth front in the December quarter. The company posted a growth of 6 per cent on a sequential basis. This was much higher than analysts' expectations, which pegged the same between 3.5-4.1 per cent.
While all the verticals contributed to the growth, it was led by consumer, retail, and pharma segments, which recorded growth of over 10 per cent. After a dip in the September quarter, the financial services, which is the largest vertical accounting for about 30 per cent of revenues, posted sequential revenue growth of 3 per cent.
RBI reluctant to change FPI portfolio limits introduced last year
The Reserve Bank of India (RBI) is reluctant to relax portfolio-level limits it introduced for foreign portfolio investors (FPIs) last year.
In a meeting with about 50 FPIs and a few custodians on Monday the central bank said it did not want to tweak the existing regulations, said sources in the sector.
The RBI has instead asked investors to look at the voluntary retention route (VRR) — a new channel currently in the works to enable FPIs to invest in debt markets in India — to bypass existing restrictions.
In April 2018, the government introduced these restrictions to cap an FPI’s investment in a single corporate bond to 50 per cent of the bond issue.
This restricted their exposure in any single corporate group to not more than 20 per cent of their overall corporate bond portfolio. They were allowed to invest in debt papers with less than three-year maturities, provided the total investment in debt papers maturing within a year did not exceed 20 per cent of the portfolio.