Mumbai: Indian markets opened marginally higher amidst corporate earnings for June quarter while global peers are slightly positive.
At 9.26 am, the benchmark Sensex Index rose 0.15% to 38039.94 points while Nifty index rose 0.17% to 11350.65.
Asian shares nudged higher on Wednesday amid hints of progress in the Sino-US trade saga, while the dollar hit two-month highs on the euro as investors wagered on a dovish outcome from the European Central Bank’s coming policy meeting.
Japan's Nikkei added 0.4% in early trade, while Australian stocks rose 0.6%. MSCI's broadest index of Asia-Pacific shares outside Japan gained 0.04%. The Dow had ended Tuesday up 0.65%, while the S&P 500 gained 0.68% and the Nasdaq 0.58%.
Stocks are just a whisker from all-time highs buoyed by expectations of a wave of policy stimulus by global central banks and a resulting sharp decline in bond yields. The European Central Bank (ECB) is likely to at least offer a nod to easier policy at its meeting on Thursday.
Boris Johnson is set to become Britain’s new Prime Minister later on Wednesday, but investors are no clearer on whether he would lead the country to a no-deal exit or find a compromise.
The International Monetary Fund (IMF) further cut its annual growth forecast for India, as it expects weaker domestic demand to limit an economic recovery. The economy is now expected to expand 7% in the year ending 31 March 2020, 0.3 percentage point slower than IMF’s April projection. In April, the Fund had cut India’s growth outlook by 0.2 percentage point to 7.3%. Economic growth is expected to accelerate to 7.2% in the following year.
Shares of Hindustan Unilever Ltd (HUL) rose 1% after it reported a 15% increase in its June quarter net profit, driven by higher revenue and a fall in raw material cost. At 5%, volume growth was also the lowest in seven quarter.
Engineering and construction conglomerate Larsen and Toubro (L&T) fell 0.5%. The company reported net profit of ₹1,473 crore, growing 21.2% year-on-year, and with operating margins improving by 100 basis points in the June 2019 quarter. L&T won new orders of ₹38,700 crore during the quarter,registering a growth of 11% year-on-year.
Major companies which will declare their June quarter earnings on Wednesday are Asian Paints, Canara Bank, Bharti Infratel, ICICI Prudential Life, Reliance Nippon Life Asset Management, Oberoi Realty, IDFC First Bank, Syndicate Bank, Karur Vysya Bank, Crompton Greaves Consumer Electricals, Shriram Transport Finance Company.
While yields on two-year Treasuries edged up to 1.837% overnight, they remain far below the cash rate and down 66 basis points for the year so far.
In currencies, the dollar got a hand up from a deal to end the US budget impasse, while the euro suffered a bout of nerves in case the ECB takes a more dovish turn. The single currency was down near two-month lows at $1.1148 , having shed 0.5% overnight, and hit a near seven-month trough on the yen at 120.45.
The dollar nudged up on the yen to 108.23, but stayed confined within recent well-worn ranges. Against a basket of currencies, the dollar firmed to a five-week top at 97.742. Sterling loitered at $1.243 having fallen for three sessions in a row as the outlook on Brexit got ever murkier.
The dollar’s gains weighed on gold, which fell back to $1,416.76 per ounce from last week’s peak of $1,452.60.
Oil prices firmed after the head of US Central Command said the United States may have taken down a second Iranian drone over the Strait of Hormuz last week. Brent crude LCOc1 futures firmed 31 cents to $64.14, while US crude CLc1 rose 27 cents to $57.04 a barrel.
(Reuters contributed to the story)
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