Stock markets may continue to be volatile; Vodafone, SBI Card in focus

On Monday, the BSE Sensex was down 524.96 points or 0.89% at 58,490.93 and the Nifty was down 188.25 points or 1.07% at 17,396.90.

Selling in Asia continued on Tuesday amid China’s crackdown on the real estate sector and the debt crisis on developer China Evergrande Group. Treasury and dollar edged up.

Japan slipped after the holiday reopening, while Australia and Hong Kong fluctuated. US futures traded higher, indicating some improvement in sentiment. Dip-buyers helped the S&P 500 cover some losses in the last hour of trading, although the gauge still posted its biggest decline since May.

Back home, in stock-specific news, private equity firm Carlyle Group will nearly halve its stake in SBI Cards and Payment Services Ltd for approximately $443 million, or ₹3,267.2 crore, as per the terms of the deal seen by the mint. CA Rover Holdings, a Carlyle entity that held a 6.5% stake in the credit card issuer as of June 30, will sell approximately 32 million shares, or a 3.4% stake in the company, through a block trade.

According to Mint Exclusive, Vodafone Group Plc and Aditya Birla Group are looking to infuse equity in Vodafone Idea Ltd after the government announced relief measures for India’s struggling telcos.

The Competition Commission of India on Monday approved the acquisition of over 10% stake in Gangavaram Port Ltd by Adani Ports and Special Economic Zone Ltd. According to a combination notice filed with the regulator, the stake will be acquired from the Andhra Pradesh government.

Treasuries held up advances and the dollar was firm. Wednesday’s Federal Reserve meeting also looms, in addition to concerns over Evergrande’s ability to make good on $300 billion of liabilities. Policymakers are expected to begin laying the groundwork for reducing incentives.

The wealth-sector turmoil is part of President Xi Jinping’s broad sway over private industry as part of his “Common Prosperity” initiative to reduce economic inequality. Investors await clarity on how the debt mess at Evergrande will be resolved. Markets in China and those in South Korea remain closed for the holiday.

The risks emanating from China come as investors question equity valuations as the delta virus variant slows the pace of reopening from the pandemic amid pressure on commodities. Markets are also digesting the outlook for less central bank policy support.

(Bloomberg contributed to the story)