Benchmarks may see flat opening

Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could rise 6 points at the opening bell.

Overseas, Asian shares were mixed following a decline on Wall Street. Investors continue to watch for developments on the US-China trade front, with Beijing making threats this week.

The biggest Chinese newspaper warned the US on Wednesday that China would cut off rare earth minerals as a countermeasure in the escalated trade battle. China's threat came after President Donald Trump blacklisted Chinese telecom giant Huawei, which led to many chipmakers and internet companies cutting ties with the company.

US stocks fell on Wednesday as bond yields declined again, triggering concerns about the economic outlook. Increasing trade tensions in the China-US trade fight also weighed on markets.

The 10-year Treasury note yield fell to its lowest level since September 2017 before rebounding to about 2.26%. A yield curve inversion is seen by traders as a potential sign that a recession is in the horizon.

Closer home, foreign portfolio investors (FPIs) sold shares worth a net Rs 304.27 crore on 29 May 2019, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 189.58 crore on 29 May 2019, as per provisional data.

Domestic stocks settled with modest losses on Wednesday, 29 May 2019, due to weak global cues. Key indices snapped three-day rising streak. The barometer index, the S&P BSE Sensex, fell 247.68 points or 0.62% to 39,502.05. The Nifty 50 index fell 67.65 points or 0.57% to 11,861.10.

On the economic front, the Reserve Bank of India (RBI) on Wednesday said it constituted a committee on the development of housing finance securitisation market. The mortgage securitisation market in India is primarily dominated by direct assignments among a limited set of market participants on account of various structural factors impacting both the demand and the supply side, as well as certain prudential, legal, tax and accounting issues.

The six-member committee on the development of housing finance securitisation market, headed by Bain & Co Senior Advisor Harsh Vardhan, has been asked to review the existing state of mortgage backed securitisation in India, including the regulations currently in place, and to make specific recommendations on suitably aligning the same with international norms. The panel would also suggest specific measures for facilitating secondary market trading in mortgage securitisation instruments, such as broadening investor base, and strengthening market infrastructure.

Further, RBI constituted a task force on the development of secondary market for corporate loans and appointed T N Manoharan, chairman, Canara Bank as chairperson of the task force. The task force will review existing state of the market for loan sale or transfer in India as well as the international experience in loan trading. It will also make recommendations on policy or regulatory interventions for development of secondary market in corporate loans, among other things. The task force shall submit its report by the end of August 2019.

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