>> Fed pledges to keep rates low till year 2023
>> RBI Governor Shaktikanta Das says yield curve is important for India Inc
>> Aditya Birla Capital on a high on plans to list mutual fund arm
>> Vodafone Idea finds its footing finally, gained users in Jan
Hi there. Welcome to ETMarkets Morning, the show about money, business and markets. I am Sandeep Singh.
Let’s start with a quick glance on the state of the markets.
Nifty futures on Singapore Exchange traded some 190 points higher this morning, hinting at a solid bounce ahead on Dalal Street. Stocks in other Asian markets climbed along with US equity futures after the US Fed’s projections for interest rates to remain near-zero through 2023. On Wall Street, the Fed comments helped lift Dow and S&P500 to new record highs. In currencies, the dollar held losses versus most major peers. Bitcoin rose modestly to about $59,000. Crude oil slipped after US crude stockpiles topped half a billion barrels.
That said, here’s what else is making news.
A reassuarance from the US Fed overnight has helped lift the mood of the markets. The American central bank projected a rapid jump in US economic growth and inflation this year as the Covid crisis winds down, but repeated its pledge to keep its target interest rate near zero for the years to come. The US central bank now sees the economy growing 6.5% this year, and the unemployment rate falling to 4.5% by year’s end. The pace of price increases is now expected to exceed the Fed’s 2% target for the year, hitting 2.4% by year’s end before falling back in 2022. But the improvement in the Fed’s economic outlook did not alter policymakers’ expectations for interest rates.
Well, expect the falling stocks to see a reversal today!
RBI Governor Shaktikanta Das says the yield curve is important not just because of the government borrowing programme, the bigger issue is the cost of funds for businesses, which are benchmarked to the G-sec yields. “It is not just the RBI’s role as the debt manager of the government to ensure that the borrowing goes through in a non-disruptive manner. The cost of borrowing for the private sector should also stay reasonable to support economic revival. World over, bond yields have gone up. People have their own estimations on inflation and growth. So it’s a very dynamic situation with a lot of complexities and nuances,” he told ET in an interview and promises to keep signalling the markets on this front.
Vedanta Resources’ higher open offer price to buy back shares in its Indian subsidiary from the public could find acceptance among investors, feel analysts. The metals and mining giant has raised its open offer price to repurchase shares of Vedanta Limited to Rs 235 apiece from Rs 160 earlier. Analysts said the acceptance ratio is likely to be as high as 75-80% with the revised open offer price, which is at a nearly 4% premium to Vedanta’s closing price of Rs 226.55 on Tuesday.
India Inc wants to go back to office. As many as 70% of employers will not continue remote working post-pandemic, with 59% employers not favouring remote working in the new normal, a survey has found. According to a report by employment website Indeed, covering 1,200 employees and 600 employers, Indian companies are less willing than their global counterparts to support remote working post-pandemic. Of all Indian companies surveyed, 67% large and 70% mid-size ones are not in favour of a post-pandemic remote working set-up.
LASTLY…
Shares of Aditya Birla Capital are on a high, hitting a two-and-a-half-year peak on Wednesday in a depressed market, after the company said its board will consider an IPO for its mutual fund subsidiary. The share sale in Aditya Birla Sun Life Asset Management Company, the country’s fourth-largest mutual fund with assets of Rs 2.55 lakh crore, will unlock value in the financial services company belonging to the Aditya Birla Group, boosting its valuations.
NOW Before I go, here is a look at some of the stocks buzzing this morning…
Struggling operator Vodafone Idea saw an increase in users for the first time in 15 months as it gained 1.7 million wireless subscribers in January, a month when Airtel continued to outpace rival Jio.
HDFC Bank continues to lead ICICI Bank and Axis Bank on the overall daily and absolute mobile transaction values among private banks showed data by advisory and research firm Bernstein.
Shares of BPCL slid 5% to Rs 431.90 on Wednesday after the oil marketer’s second interim dividend of Rs 5 per share fell below investors’ expectations.
Air-conditioner and commercial refrigeration manufacturer Blue Star on Wednesday did not rule out the possibility of a hike in prices following the rise in raw material and freight charges.
Do also check out over two dozen stock recommendations for today’s trade from top analysts on ETMarkets.com.
That’s it for now. Stay put with us for all the market news through the day. Happy investing!
