Markets May Be Volatile After GDP Data, New Margin Standards May Reach Volumes

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MUMBAI: Indian stock markets are expected to be volatile on Tuesday as trends from SGX Nifty suggest a slightly higher opening for Indian benchmarks. On Monday, the BSE Sensex closed at 38,628.29, losing 839.02 points or 2.13%, The Nifty closed at 11,387.50, losing 260.10 points or 2.23%.

The markets are likely to react to several factors. Data released last night showed India’s gross domestic product (GDP) for June contracted 23.9%. In the meantime, the implementation of new margin standards will begin from September 1, while geopolitical tensions between India and China will continue to be the focus of concern.

Asian stocks were mixed on Tuesday after a softer Wall Street close, as the dollar slipped as markets digested new comments from the Federal Reserve that suggested rates will remain low for an extended period.

The Dow Jones Industrial Average and the S&P 500 finished in the red, while the Nasdaq rose strongly. The S&P gained more than 7% for the month to mark its best August since 1986, a traditionally milder month for stock performance.

Back home, the Supreme Court will deliver its order on Tuesday on the installment payment of Adjusted Gross Income (AGR) contributions by Vodafone Idea Ltd, Bharti Airtel Ltd and Tata Teleservices Ltd.

Auto stocks will be the focus as monthly sales data for August will be released by companies today.

Shares of banks and financial services will also be monitored today as the Reserve Bank of India’s moratorium on loan repayments ended yesterday.

In other asset classes, the dollar edged down against a basket of major currencies early on Tuesday. The dollar index was down 0.08%, the euro up 0.02% to $ 1.1938. The Japanese Yen strengthened 0.04% against the greenback to 105.86 per dollar, while the British pound last traded at $ 1.3364, down 0.04% on the day.

Expectations that the Fed will keep interest rates low for an extended period kept the dollar lower, marking a fourth consecutive month of decline, its longest streak of losses since 2017.

(Reuters contributed the story)

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