STATE OF THE MARKET
SGX Nifty signals positive start
Nifty futures on the Singapore Exchange traded 166 points, or 1.12 per cent, higher at 14,937.50 in signs that Dalal Street was headed for a gap-up start on Thursday.
Tech View: Nifty hurdle at 14,950
Nifty50 dropped for the fourth straight session on Wednesday and formed a long bearish candle on the daily chart. This was the fifth straight session when the index formed a bearish candle. Nifty has barely held on to its 50-day moving average at 14,720 and a breach of this level could now trigger a steep downside in the near term. Any upside on the index is likely to be capped at 14,950 level, said analysts.
Asian markets rally in early trade
Asian stocks gained on Thursday after the Federal Reserve pledged to keep monetary policy and rates unchanged and projected a rapid jump in US economic growth this year as the COVID-19 crisis eases. Japan’s Nikkei225 index added 1.77 per cent, Hong Kong’s Hang Seng index climbed 1.4 per cent while Korea’s Kospi advanced 1.2 per cent. E-mini futures for the S&P 500 rose 0.31 per cent.
falls for a fifth day
Oil prices dropped for a fifth day on Thursday after official data showed a sustained rise in US crude and fuel inventories, while the ever-present pandemic clouded the demand outlook. Brent crude was down 12 cents, or 0.2 per cent, at $67.88 a barrel by 0119 GMT after dropping by 0.6 per cent on Wednesday. US oil was also down 12 cents, or 0.2 per cent, at $64.48 a barrel, having fallen 0.3 per cent the previous session.
US stocks settled higher
Stocks closed higher Wednesday, reversing an early slide after the Federal Reserve reassured Wall Street that it expects to keep its key interest rate near zero through 2023. The S&P 500 rose 11.41 points, or 0.3 per cent, to 3,974.12, recovering from a 0.7 per cent slide. The benchmark index has now notched an all-time high 14 times this year. The Dow gained 189.42 points, or 0.6 per cent, to 33,015.37. The Nasdaq, which had been down 1.5 per cent, rose 53.64 points, or 0.4 per cent, to 13,525.20.
Nazara IPO subscribed 4x on Day 1, Kalyan 1.2x
The initial public offer of gaming firm Nazara Technologies was subscribed 4 times on the first day of subscription on Monday. The issue received bids for 1,17,15,171 shares against 29,20,997 shares on offer. On the other hand, Kalyan Jewellers’ IPO was subscribed 1.21 times on Wednesday, the second day of subscription. The initial public offer of Kalyan Jewellers India received bids for 11,56,77,912 shares against 9,57,09,301 shares on offer.
FPIs buy Rs 2,626 crore worth stocks
Net-net, foreign portfolio investors (FPIs) were buyers of domestic stocks to the tune of Rs 2,625.82 crore, data available with NSE suggested. DIIs were net sellers to the tune of Rs 562.15 crore, data suggests.
MONEY MARKETS
Rupee: The rupee on Wednesday closed flat at 72.55 against the US dollar in a restricted trade ahead of the final outcome of the US Federal Reserve meeting.
10-year bonds: India 10-year bond yield rose 0.08 per cent to 6.18 after trading in 6.16-6.20 range.
Call rates: The overnight call money rate weighted average stood at 3.27 per cent, according to RBI data. It moved in a range of 1.90-3.50 per cent.
DATA/EVENTS TO WATCH
- Australia RBA Bulletin (06:00 am)
- ECB President Lagarde Speech (01:30 pm)
- Euro Area Balance of Trade Jan (03:30 pm)
- Euro Area Wage Growth YoY Q4 (03:30 pm)
- BoE Interest Rate Decision (05:30 pm)
- BoE MPC Meeting Minutes (05:30 pm)
- BoE Quantitative Easing (05:30 pm)
- US Jobless Claims 4-week Average Mar/13 (06:00 pm)
- US Initial Jobless Claims 13/Mar (06:00 pm)
MACROS
Fed expects an inflation jump in 2021, but no rate hike… The US economy is heading for its strongest growth in nearly 40 years, the Federal Reserve said on Wednesday, and central bank policymakers are pledging to keep their foot on the gas despite an expected surge of inflation. While inflation is expected to jump to 2.4 per cent this year, above the central bank’s 2 per cent target, Powell said that is viewed as a temporary surge that will not change the Fed’s pledge to keep its benchmark overnight interest rate near zero.
Das says yield curve important for India Inc too… The yield curve is so important not just because of the government borrowing programme, says RBI Governor Shaktikanta Das. “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 bigger issue is the cost of funds for businesses when they raise funds in the market, which are benchmarked to the G-sec yields. The cost of borrowing for the private sector should be 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,” says he.
Five-year tax holiday for private DFIs… The government will provide a five-year income tax holiday to private sector development finance institutions (DFIs) to build a robust system for funding infrastructure. They will join a state-owned DFI that’s being set up. The government will move an amendment to the income tax act to provide for the tax holiday when the Finance Bill is taken up for passage in Parliament, ET quoted a senior government official as saying.
PM asks states to stop Second Wave… Prime Minister Narendra Modi on Wednesday called on the chief ministers to stop an emerging “second peak” in Covid-19 cases, asking them to ensure RTPCR testing remained above 70% and open more vaccination centres. It was pointed out at the meeting that 70 districts of the country had recorded a 150% rise in cases in the past few weeks. “If we don’t stop this pandemic right now, then there could be a nationwide outbreak,” the PM said.
India Inc not keen on WFH… 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, finds a survey. 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 are not in favour of a post-pandemic remote working set-up.
Irdai stricture on health plans… Irdai has said that insurers cannot make any significant changes in coverage of health insurance policies that result in an increase in premium. The regulator, however, allowed minor modifications and offer of an optional cover where the premium is shown separately. Irdai is also taking a closer look at pricing and has asked companies to get an actuarial review of the viability of every health plan at the end of the year to ensure that all health products are sustainable.
Hold Co structure for strategic PSUs… The government is considering a holding company structure for state-run firms in the strategic sectors in which it has decided that public sector enterprises will have a “bare minimum” presence. Each identified strategic sector will have a holding company and the plan may kick off with defence, power and mining sector public enterprises. Two separate holding company structures are being considered: a new company could house government holdings in different PSU entities in a sector; or the dominant entity in the sector may be turned into a holding company.
Insurance penetration likely to increase… India is expected to see a significant jump in insurance penetration during the current fiscal and is projected to leapfrog in global rankings in the next five years, according to the chief executive of HDFC Ergo General Insurance. Even as the economy is forecast to shrink by over 7% during the current fiscal, the nonlife industry is set to post a growth of over 4%. This is expected to result in a significant jump in insurance penetration (ratio of premium to GDP). Insurance penetration has been creeping up from 0.7% in FY15 to 0.94% in FY20 when the total premium was Rs 1.9 lakh crore.
