A weak opening on the cards

July 31,2019

Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could fall 48 points at the opening bell. Eicher Motors will announce Q1 June 2019 result today, 31 July 2019.

Overseas, Asian shares were trading lower on Wednesday amid dampened expectations for a resolution to the U.S.-China trade war. China's factory activity contracted for the third straight month in July, according to official data released on Wednesday. The official manufacturing Purchasing Managers' Index (PMI) for July came in at 49.7 from June's reading of 49.4, according to data from the Chinese statistics bureau.

US stocks drifted lower Tuesday as President Trump renewed his attacks on China, quashing hopes for a speedy resolution to trade tensions. Investors also digested another round of mixed corporate earnings and awaited a crucial Federal Reserve decision.

President Trump ratcheted up pressure on China to quickly reach a trade deal, warning that if he is re-elected next year, the terms of an agreement would be much tougher than what is currently being discussed. US delegates including Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer are in Shanghai for meetings with their Chinese counterparts, but hopes remain low for a breakthrough as neither side appears eager to make a deal.

The US Federal Reserve's two-day policy meeting concludes today, 31 July 2019 and it is widely anticipated to cut benchmark rates by at least 25 basis points to combat headwinds from the China-US trade dispute and signs of slowing economic growth outside of the US.

Back home, key equity benchmarks extended losses for second straight session yesterday, 30 July 2019 amid broad-based selling pressure. Investors were cautious ahead of US-China trade talks and US Fed policy outcome. The Sensex fell 289.13 points or 0.77% to settle at 37,397.24, its lowest closing level since 16 May 2019. The Nifty 50 index fell 103.80 points or 0.93% to settle at 11,085.40, its lowest closing level since 8 March 2019.

The trading activity on that day showed that the foreign portfolio investors (FPIs) sold shares worth a net Rs 644.59 crore yesterday, 30 July 2019, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 1079.72 crore yesterday, 30 July 2019, as per provisional data.

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