Market may open on a flat note

Local stocks are likely to open on a flat note as trading resumes after a long weekened. Trading of Nifty 50 index futures on the Singapore stock exchange indicates that the Nifty could fall 8 points at the opening bell. Markets will react to gross domestic product data which grew at slowest pace since 2013. Public sector banks may be in focus after the government unveiled mega merger of state-run banks.

India's gross domestic product (GDP) growth moderated to 25-quarters low of 5% in Q1 of 2019-20 from 5.8% growth recorded in the previous quarter and 8% improvement in the corresponding quarter last year. Quarterly Gross Value Added (GVA) growth also eased to 4.9% in Q1 of 2019-20 from 5.7% in Q4 of 2018-19 and 7.7% in Q1 of 2018-19. The data was announced after market hours on Friday, 30 August 2019.

Growth of eight core industries dropped to 2.1% in July 2019. The eight core sector industries - coal, crude oil, natural gas, refinery products, fertiliser, steel, cement and electricity had expanded by 7.3% in July 2018.The data was announced after market hours on Friday, 30 August 2019.

In a press briefing after market hours on Friday, 30 August 2019, finance minister announced that Punjab National Bank (PNB), Oriental Bank of Commerce (OBC) and United Bank of India will be merged. The combined entity will be second largest PSU bank in India with business of Rs 17.94 lakh crore. It will have second largest banking network in India with 11,437 branches.

Union Bank of India, Andhra Bank and Corporation Bank will be also merged. The entity will be fifth largest public sector bank with business of Rs 14.59 lakh crore. Canara bank and Syndicate Bank will be merged. The entity will be fourth largest public sector bank with business of Rs 15.20 lakh crore. Finance minister also announced that Indian Bank and Allahabad Bank will be merged. The entity will be seventh largest public sector bank with business of Rs 8.08 lakh crore.

In place of fragmented lending capacity with 27 public sector banks in 2017, now there will be 12 public sector banks post the latest round of consolidation of PSU banks. The consolidation of public sector banks will give them scale, FM said.

Overseas, Asian stocks were mixed on Tuesday as the US-China trade tensions continue to rise after China lodged a complaint against the United States at the World Trade Organization over US import duties.

US stocks ended with a lackluster session on Friday as investors were cautious ahead of a holiday weekend in which a fresh round of US tariffs on Chinese imports were due to be levied. US President Donald Trump said the sides would still meet for talks later this month. Trump said his goal was to reduce US reliance on China and he again urged American companies to find alternate suppliers outside China.

The United States began imposing 15% tariffs on a variety of Chinese goods on Sunday - including footwear, smart watches and flat-panel televisions - as China began imposing new duties on US crude, the latest escalation in a bruising trade war.

In Europe, British Prime Minister Boris Johnson indicated he could call an election to stymie lawmakers' efforts to avert a no-deal Brexit.

Back home,the domestic stock market bounced back on Friday, amid positive global cues on hopes that the United States and China may resolve their tariff dispute. The barometer index, the S&P BSE Sensex, rose 263.86 points or 0.71% to 37,332.79. The Nifty 50 index rose 74.95 points or 0.68% to 11,023.25.

Local stock markets were closed on Monday, 2 September 2019 on account of Ganesh Chaturthi.

The trading activity on that day showed that the foreign portfolio investors (FPIs) bought shares worth a net Rs 1162.95 crore on Friday, 30 August 2019, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 1502.27 crore on Friday, 30 August 2019, as per provisional data.

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