>> RBI intervenes in bond market to cools down yields
>> India Inc’s loss pool to GDP ratio is approaching lowest level in a decade
>> Fuel prices go through roof, petrol selling at Rs 94 in Mumbai
>> Air fares likely to shoot up as govt raises the cap
Hi there. Welcome to ETMarkets Morning, the show about money, business and markets. I am Sandeep Singh . It’s a mixed bag on the news front.
Lemme first give you a quick glance at the state of the markets.
The trade setup looked weak on Dalal Street, even though Thursday’s market action held a lot of promise. Nifty futures in Singapore traded with some mild cuts earlier today. Markets in the rest of Asia are largely weak, while many bourses are closed for the Lunar New Year. Wall Street was lacklustre overnight, the dollar is steady, crude oil is retreating after a bleak demand projection from the International Energy Agency. Bitcoin is rising again, gained 7% yesterday. And gold is marginally up.
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That said,
Losses are falling for Indian businesses. A study by brokerage ICICI Securities showed the loss pool-to-GDP ratio is approaching the lowest level in a decade. It has come down from a two-decade high of around 1.8% in FY18. The GDP revival, fiscal push, lower interest rate and low tax rates should now further augment the profit-to-GDP ratio, the study showed.
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Fuel prices are going through the roof amid a robust oil price recovery in the international market and the government’s unwillingness to cut taxes. Petrol sold for Rs 87.85 a litre in Delhi and Rs 94.36 in Mumbai. Diesel retailed for Rs 78.03 in Delhi and Rs 84.94 in Mumbai. Oil marketing companies are smiling all the way to the bank.
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And now even air fares are expected to shoot up, as the government increased the caps on fares by up to 30% across sectors on Thursday. While the lower limit has been raised by 10% and more, the upper cap has been raised by up to 30%. The new fare bands take effect immediately.
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RBI has managed to cool down the bond yields. The benchmark bond yield dropped well below the crucial 6% mark on Thursday, calming the debt market. This will help lower the cost of borrowing for the government, which plans to borrow more this financial year and also the next.RBI is suspected to have intervened in the secondary market, and also accepted additional bids in a special auction by offering yields slightly higher than market expectations. The central bank is said to have asked certain PSU banks and bond houses to buy securities in the special auction on its behalf.
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ITC stock will be under watch today. The cigarettes-to-hospitality conglomerate put up a modest performance for December quarter with a 5% increase in gross sales and 11% drop in profit. While operating margins fell by 280 bps, the company sweetened the proposition for investors by paying a dividend of Rs 5 per share.
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Eicher stock too is under a cloud. A moderation in the waiting period for bike delivery and rising competitive intensity are raising doubts whether the premium valuation of the Royal Enfield bike maker would sustain. Its stock has lost over 4% in last two sessions since its third quarter results. Dealer check and the company’s commentary indicated a softer demand recovery.
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Before I go, here is a look at some of the stocks buzzing this morning…
>> IndiGo plans to start 22 new flights from March 28 from various cities including Agartala, Bhubaneswar, Jaipur, Chennai, Bengaluru, Patna and Tirupati
>> Hinduja Group flagship Ashok Leyland on Thursday reported a net loss of Rs 19 crore for the third quarter ended December 31, thanks to a one-time VRS cost of Rs 85 crore.
>> Sun Pharmaceutical Industries, its founder Dilip Shanghvi and his brother-in-law and whole-time director Sudhir Valia have settled a case of alleged fund diversion with Sebi
>> Sebi has allowed Thomas Cook (India) to withdraw its Rs 150 crore share repurchase offer after the travel services provider expressed tight financial position due to Covid-19.
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Do also check out over a dozen stock recommendations for today’s trade from top Dalal Street analysts on ETMarkets.com.
That’s it for now. Stay put with us for all the market news through the day. Happy investing!
