STATE OF THE MARKETS
SGX Nifty signals a positive start
Nifty futures on the Singapore Exchange traded 25.5 per cent points or 0.17 per cent higher at 14,626, in signs that Dalal Street was headed for a positive start on Wednesday.
Tech View: Risk takers can buy on dips
Nifty50 on Tuesday made higher highs for the 14th straight session and formed a bullish candle on the daily chart. Analysts said Nifty’s positive momentum can continue and it can look to take out the 14,750 level soon. They see support for the index in the 14,300-14,430 zone.
Asian shares make cautious gains
Asian stocks traded mostly higher on Wednesday, tracking modest Wall Street gains as prospects of an eventual victory against coronavirus shored up recovery hopes. Japan’s Nikkei 225 rose 0.11 per cent while South Korea’s Kospi gained 0.64 per cent higher. Hong Kong’s Hang Seng Index edged up 0.12 per cent. China’s Shanghai Composite added 0.14 per cent. Australia’s S&P/ASX 200 was flat.
Oil prices extend gains after US inventory drop
Oil prices rose on Wednesday, with US crude gaining for a seventh day, after an industry report showed a further drop in inventories and investors shrugged off worsening developments in the pandemic. US West Texas Intermediate (WTI) was up 40 cents, or 0.8 per cent, at $53.61 a barrel after gaining nearly 2 per cent on Tuesday. Brent crude was up 47 cents, or 0.8 per cent, at $57.05, having risen 1.7 per cent in the previous session.
US stocks settled higher
The benchmark S&P 500 closed barely higher on Tuesday while shares in smaller companies soared to record highs as investors favored more economically sensitive market segments as they bet on a recovery in 2021. The Dow Jones Industrial Average rose 60 points, or 0.19 per cent, to 31,068.69, the S&P500 index gained 1.58 points, or 0.04 per cent, to 3,801.19 and the Nasdaq Composite index added 36.00 points, or 0.28 per cent, to 13,072.43.
Infy, Wipro to announce Q3 results today
Infosys, Wipro, CESC, GTPL Hathway, Amtek Auto and 5paisa Capital are some of the companies that would announce their quarterly results on Wednesday.
FIIs buy Rs 571 cr worth of stocks
Net-net, foreign portfolio investors (FPIs) were buyers of domestic stocks to the tune of Rs 571.47 crore, data available with NSE suggested. DIIs were net sellers to the tune of Rs 1,334.50 crore, data suggests.
MONEY MARKETS
Rupee: The rupee recouped early losses and closed 15 paise higher at 73.25 against the US dollar on Tuesday, supported by weakness in the greenback overseas and recovery in domestic equities.
10-year bonds: India 10-year bond yield rose 0.12 per cent to 5.93 after trading in 5.91-5.93 range.
Call rates: The overnight call money rate weighted average stood at 3.19 per cent, according to RBI data. It moved in a range of 1.9-3.5 per cent.
DATA/EVENTS TO WATCH
- Japan Machine Tool Orders YoY Dec (11:30 am)
- ECB President Lagarde Speech (02:30 pm)
- Euro Area Industrial Production YoY Nov (03:30 pm)
- US MBA Mortgage Applications 08/Jan (05:30 pm)
- US Inflation Rate YoY Dec (07:00 pm)
- US EIA Crude Oil Stocks Change 08/Jan (09:00 pm)
MACROS
Retail inflation dips in Dec… Declining vegetable prices brought down the retail inflation to a 15-month low of 4.59 per cent in December and within the comfort zone of the Reserve Bank, government data showed on Tuesday. It is for the first time during the current fiscal that the Consumer Price Index (CPI) based inflation print is below 6 per cent or in the RBI’s target range of 2 to 6 per cent. The central bank factors in the CPI-based inflation while arriving at its monetary policy.
Govt looks to buybacks, dividends… The government will rely on proceeds from buybacks and dividends from public sector enterprises to shore up non-tax revenues as key strategic divestments, including Air India and BPCL, are likely to conclude only in the next financial year, said officials. However, the additional proceeds would still be much less than adequate to meet the mammoth target of Rs 2.1 lakh crore set for 2020-21, they said.
Labour code rules this month… The labour ministry will finalise rules for all the four labour codes by the end of this month. Following this, the government can notify them any time, paving way for the implementation of the codes even before April 1 as envisaged earlier. The ministry had earlier said it aims to implement the four labour codes from April 1 this year in one go.
SC suspends new farm laws… The Supreme Court “suspended” the “implementation” of three farm laws in a bid to persuade farmers agitating against them to come to the “negotiating table.” It also set up a four-member expert committee to “negotiate” between the farmers and the government. Farmers’ groups, pushing for repeal, have said they won’t appear before the committee. The suspension of the laws was aimed at calming protestors and convincing them to discuss the legislation with the government.
Industrial output slows in Nov… Industrial production contracted in November after two months of expansion, raising some doubts over strength of recovery, but a sharp fall in consumer inflation in December will allow the Reserve Bank of India (RBI) to keep interest rates soft to help the economy revive. Industrial output, as measured by the index of industrial production (IIP), shrank 1.9% in November, while retail inflation eased to a 15-month low of 4.59% in December, from 6.93% in the previous month, showed data released by the statistics office on Tuesday.
FY21 fiscal deficit seen at 7.5%… The forthcoming Budget could pencil in the fiscal deficit for FY21at 7.5% of the GDP as against the budgeted 3.5%, according to the median of estimates by various experts. In a report released on Tuesday, SBI Research pegged the FY21 deficit at 7.4% of GDP on the back of a revenue shortfall accompanied by a higher-than-budgeted outgo, while it put the FY22 deficit at 5.2% of GDP.
Costs swell for bond issuers… Interest rates are generally directional. When debt costs for some maturities head north, usually the others follow. That precisely appears to be the outcome of the central bank move to help correct overnight rates. They have risen, and so have the costs for primary bond issues. Bank of Baroda, Rural Electrification Corporation, and Indian Bank are now paying about 25-45 basis points higher for three-to-five-year money compared to their own secondary market rates.
