STATE OF THE MARKETS
SGX Nifty signals positive start
Nifty futures on the Singapore Exchange traded 13 points, or 0.09 per cent, higher at 13,733.50 in signs that Dalal Street was headed for a positive start on Monday.
Tech View: Nifty forms bearish candle
Nifty50 on Friday failed to capitalise on a gap-up start and fell below its crucial 50-day moving average, before settling lower for the sixth day in a row. A Long Bearish Candle on the daily chart for the day dashed hope of any recovery and made analysts set a near-term target as low as 13,200 for the index.
Asian markets rise in early trade
Asian shares rose on Monday, shrugging off a selloff in US stocks on Friday. Stocks jumped despite worries that problems with vaccine rollouts combined with new strains of COVID-19 will delay a global economic recovery. Japan’s Nikkei bounced 1.03 per cent to 27,947.40. Hong Kong’s Hang Seng advanced 1.02 per cent to 28,571.44 . Korea’s Kospi added 1.46 per cent to 3,019.72.
US stocks settled 2% lower on Friday
Stocks sank again as a speculative frenzy over GameStop and a handful of other stocks ramps up worries over how much damage an online revolt against Wall Street bigwigs can do to the broader market. The S&P500 index fell 73.14 points, or 1.9 per cent, to 3,714.324. The Dow Jones Industrial Average fell 620.74 points, or 2 per cent, to 29,982.62. The Nasdaq fell 266.46 points, or 2 per cent, to 13,070.69.
Kansai Nerolac, Castrol to report Q3 results
Kansai Nerolac, Castrol India, Zydus Wellness, Coromandel International, Finolex Industries, MRPL, Mastek, Subex, Reliance Infra, Reliance Capital and Rane Brake Lining are among major companies which will announce their December quarter results today.
FIIs sell Rs 5,931 crore worth stocks
Net-net, foreign portfolio investors (FPIs) were sellers of domestic stocks to the tune of Rs 5,930.66 crore, data available with NSE suggested. DIIs were net buyers to the tune of Rs 2443.20 crore, data suggests.
MONEY MARKETS
Rupee: The rupee gained 9 paise to settle at 72.96 against the US dollar on Friday even as the domestic equity markets closed with significant losses.
10-year bonds: India 10-year bond yield rose 0.27 per cent to 5.94 after trading in 5.93-5.95 range.
Call rates: The overnight call money rate weighted average stood at 3.20 per cent, according to RBI data. It moved in a range of 1.9-3.5 per cent.
DATA/EVENTS TO WATCH
- Q3 Earnings: Reliance Capital I R-Infra I Zydus Wellness I Mastek
- India Union Budget 2021-22 (11:00 am)
- India Markit Manufacturing PMI Jan (10:30 am)
- India Balance of Trade Prel Dec (05:50 pm)
- Japan Jibun Bank Manufacturing PMI Final Jan (06:00 am)
- China Caixin Manufacturing PMI Jan (07:15 am)
- Euro Area Markit Manufacturing PMI Final Jan (02:30 pm)
- UK Markit/CIPS Manufacturing PMI Final Jan (03:)) pm)
- Euro Area Unemployment Rate Dec (03:30 pm)
- US Markit Manufacturing PMI Final Jan (08:15 pm)
MACROS
FM to table Budget 2021 today… Finance Minister Nirmala Sitharaman will table Budget 2021 on Monday. The Budget presentation will begin with a speech from the Finance Minister scheduled to take place at around 11 am. Ahead of her third Budget presentation, the Finance Minister and her team will meet President Ram Nath Kovind, and will likely be accompanied by her deputy Anurag Thakur and other officials of the Finance Ministry.
Debt market awaits negative surprise… Inflation control, the global bond index and gross federal borrowing: This triad will weigh on the debt markets on Monday when the Finance Minister announces the Budget, which could immediately lower yields 10-15 basis points through measures the Street considers positive. “The debt market was probably bracing up for a negative surprise,” said Jayesh Mehta, India country treasurer at Bank of America. “If the Budget addresses the concerns on government borrowing and lifts market sentiment with some concrete announcements, a relief rally is likely in the sovereign bonds, lowering funding costs.”
Bank earnings start to show NPA pain… Bank earnings for Q3 showed that slippages in retail loans have increased with lenders like ICICI Bank and RBL Bank reporting a sharp year-on-year increase in NPAs from the segment. Others that didn’t, such as Bank of Baroda, flagged future risks from retail loans or have reported concerns on specific portfolios like credit cards in case of IndusInd.
Sovereign gold bond looks promising… If your stock screen is looking fatigued, it’s time to venture out – and add a dash of golden sheen, perhaps. The recent 11% correction in gold prices is a good entry point for those eyeing sovereign gold bonds. The 11th tranche of sovereign gold bonds is open until February 5 and investors will have to pay Rs 4,862 per gram of gold after the Rs 50 per gram discount for digital payments. This is the lowest price in the last seven months and is 4% lower than the January price.
Jan GST mopup hits record… GST collections totalled nearly Rs 1.2 lakh crore in January, the highest since the introduction of the tax regime, according to official data released a day ahead of Budget. GST revenue in December was Rs 1.15 lakh crore. The consistent collections of over Rs 1 lakh crore for the last four months and a steep increasing trend over January were “clear indicators of rapid economic recovery” post the pandemic, the finance ministry said in a statement.
NBFCs await Budget booster… Shares of NBFCs are likely to rally on Monday amid growing optimism over the Budget announcements. While the government is expected to launch a fund with a sovereign contribution, it may introduce several other credit or liquidity enhancement or refinancing plans to support borrowing sectors such as real estate, auto and MSMEs. Analysts say such a move can benefit NBFCs such as Mahindra Finance, HDFC, Can Fin Homes, Repco Home Finance, Shriram Transport, Indiabulls Housing and Sundaram Finance, and a few leading gold loan firms.
Crypto industry jittery… Cryptocurrency entrepreneurs and industry leaders are hitting the panic button as the Centre prepares to outlaw trade in private e-money ahead of the potential launch of India’s official digital currency. On Friday, the Centre announced that it will introduce the Cryptocurrency and Regulation of Official Digital Currency Bill, 2021 in the ongoing Budget Session. It is aimed at paving the way for the eventual introduction of digital money by the country’s central bank at a time when China is testing a version of its digital yuan.
FMCG market expands fast… India’s fast-moving consumer goods market expanded 4.2% in the last calendar year, twice the rate in 2019 despite manufacturing and distribution hurdles in late March and April, helped by the rise in the packaged food and hygiene segments as many Indians stayed home due to Covid. The market for daily groceries and household products had grown 2.1% by volume in 2019, according to the latest study by global consumer research firm Kantar Worldpanel (formerly IMRB).
Telcos may spend more on spectrum… Bharti Airtel and Reliance Jio Infocomm may spend 15-20% more than previously projected to buy spectrum in the March auctions, prompted by the government’s move to halve the notice period that operators need to give to offer new technologies such as 5G on 4G airwaves, said analysts. As a result, the government could net as much as Rs 8,000 crore more than the roughly Rs 40,000 crore estimated from the March sale of 4G airwaves. Around a fourth of this could come into the government coffers this fiscal itself, as upfront payment.
Motown sees record dispatches… Indian carmakers registered record dispatches for the third straight month in January when they shipped 295,000-298,000 passenger vehicles to dealers on the back of growing consumer appetite for personal mobility in the wake of the Covid-19 pandemic and sustained pent-up demand. The previous best for the first month of the calendar was 285,000 units in January 2018.
