12 Things To Know Before Today’s Opening

Global macroeconomic data has been upbeat and the stance of various central banks has been dovish. Moreover, there has been a series of reforms announced domestically indicating the government’s steps towards reviving growth. There are several factors, global and domestic, that will add to the positive sentiment and result in some gains today.

1. The Federal Reserve on Wednesday said it would continue stimulus. It also expressed concerns over low inflation. Although it downgraded its outlook of growth in the US, it maintained a stable view on its actions. Impact: Positive
2. According to the Labor Department, applications for unemployment benefits fell by 19000 to 326000 last week. This is the lowest level seen in five years. Impact: Positive
3. The Institute for Supply Management (ISM) said its manufacturing index for July 2013 surged to 55.4 as against 50.9 in June 2013. This marks the highest manufacturing level recorded in two years. Impact: Positive
4. Markit’s euro-zone Purchasing Managers’ Index (PMI) rose to 50.3 in July 2013 from 48.8 in June 2013. Any level above 50 marks expansion in manufacturing while any level below 50 is indicative of contraction. Impact: Positive
5. The European Central Bank (ECB) maintained key rates at 0.5% on Thursday. ECB Chief Mario Draghi later said that it can be tentatively confirmed from data that the European economy seems to be stabilising. Rates are likely to remain at low levels commented Draghi. Impact: Positive
6. The Bank of England (BoE) left its monetary policy unchanged. Rates remained at a record low of 0.5% and the quantum of asset purchases also remained as before. Impact: Positive
7. China’s official manufacturing PMI inched up to 50.3 in July 2013 from 50.1 in June 2013. Impact: Positive
8. The HSBC and Markit manufacturing PMI for China declined to 47.7 in July 2013 from 48.2 in June 2013. Impact: Negative
9. The Cabinet Committee of Economic Affairs cleared 100% FDI in telecom from the current 74%. Of this, up to 49% would be allowed under the automatic route and the remaining through Foreign Investment Promotion Board (FIPB) FIPB approval. Impact: Positive
10. A similar move was made for asset reconstruction companies and tea plantations. It also cleared 100% FDI through automatic route in courier services. Impact: Positive
11. It also allowed 49% FDI in single brand retail under the automatic route. For PSU oil companies, commodity exchanges, power exchanges, stock exchanges and clearing companies too, 49% FDI would be allowed through the automatic route. Impact: Positive
12. It also cleared some norms in multi brand retail FDI, Right to Information Act and in the formation of the Rail Tariff Authority. Impact: Positive