BoB Outbids Rivals for SAIL

Aaj Ka Bazaar

After chalking up the best winning streak of the year, the US indices moved up a notch as the participants the investors continue to focus on the upcoming Jackson Hole Economic Symposium. The Asian markets showed signs of posting another day of solid gains on the back of lowering dollar, subdued volatility and positive outlook of US markets. Nikkei rose with the help of technology stocks, as it shrugged off the latest bout of yen strength. The Hang Seng Index opened higher but experienced a slight decline later in the session. This occurred as the People’s Bank of China (PBOC) maintained the benchmark lending rates, which was anticipated by the market, leading to subdued market sentiment. According to GIFT Nifty, the Indian markets are anticipated to open on a positive note. This optimism is driven by favourable global market sentiments.

Markets Around Us

BSE Sensex - 80,634.50 (0.28%)

Nifty 50 - 24,635.60 (0.26%)

Bank Nifty - 50,543.45?(0.35%)

Dow Jones - 40,839.05 (-0.14%)

Nasdaq - 17,876.77 (1.39%)

FTSE - 8,356.94 (0.54%)

Nikkei 225 - 38,147.95 (2.01%)

Hang Seng - 17,506.97 (-0.36%)

Sector: Banking

Bank of Baroda gets Rs 5000 crore loan deal from SAIL

Bank of Baroda (BoB) secured a Rs 5,000 crore loan deal with state-owned steelmaker SAIL, outbidding larger public and private sector banks. BoB offered a competitive rate of 7.49% for a five-year loan, linked to the 364-day treasury bill, which was the lowest bid. The loan will be used by SAIL for capital expenditure and working capital needs, and it can be drawn in multiple tranches over the next few months. This aggressive bid by BoB suggests the bank prioritized expanding its loan portfolio over profitability, as the margin on this loan is lower than its average. Lending to a government-owned company like SAIL is considered low-risk, making it an attractive deal despite the lower returns.

Why it Matters:

BoB’s ability to outbid other banks, including larger competitors, might enhance its reputation in the market as a bank willing to aggressively pursue high-quality deals, potentially attracting more clients in the future.

NIFTY 50 GAINERS

BPCL - 353.20?(2.73%)

SBILIFE - 1,697.80?(1.57%)

INDUSINDBK - 1,367.80?(1.50%)

NIFTY 50 LOSERS

ONGC - 329.85 (-1.63%)

BHARTIARTL - 1,454.50 (-1.03%)

CIPLA - 1,565.60?(-0.63%)

Sector: Oil & Gas

ONGC gets extension for Vietnam oil blocks

India's state-owned ONGC Videsh Ltd has secured a 16-year extension for its oil and gas production contract in Vietnam's Block 06.1, located in the Nam Con Son Basin. This extension allows the company to continue operations until 2039. Additionally, ONGC Videsh received a three-year extension to explore Block 128 in the South China Sea, despite not finding commercially viable reserves there over the past 18 years. The strategic importance of Block 128 lies in its location within contested waters, where India aims to maintain a presence amid China's claims. The Vietnamese government supports this continued exploration to counter China's influence. ONGC Videsh has a 45% stake in Block 06.1, which produces about 1 million tonnes of oil and gas annually. The extensions reflect India's ongoing strategic interest in the region and Vietnam's desire to strengthen ties with India in the face of regional challenges.

Why it Matters:

These developments are likely to be viewed positively by investors, as they ensure long-term operational stability, potential revenue growth, and reinforce ONGC Videsh's strategic positioning in a key region.

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Around the World

Most Asian stocks rose on Tuesday, following an overnight rally on Wall Street, driven by optimism about potential lower U.S. interest rates. However, Chinese markets lagged behind as the People's Bank of China kept its benchmark loan prime rate unchanged, disappointing some investors who had hoped for more rate cuts. Japanese stocks performed best, with the Nikkei 225 index nearing a three-week high, mainly boosted by gains in technology stocks. Meanwhile, Australian stocks saw limited gains due to concerns over potential prolonged high interest rates and weak economic growth in China. Overall, the focus this week is on Federal Reserve Chair Jerome Powell's upcoming speech at the Jackson Hole Symposium, where he may provide further insight into potential rate cuts.

Option Traders Corner

Max Pain

Nifty 50 - 24,500

Bank Nifty - 50,500

Nifty 50 - 24,578 (Pivot)

Support - 24,517, 24,462, 24,401

Resistance - 24,633, 24,693, 24,749

Bank Nifty - 50,460 (Pivot)

Support - 50,191, 50,015, 49,747

Resistance - 50,636, 50,904, 51,081

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