Here’s breaking down the pre-market actions:
STATE OF THE MARKETS
SGX Nifty signals weak start
Nifty futures on the Singapore Exchange traded 36 points, or 0.25 per cent, lower at 14,617 in signs that Dalal Street was headed for a negative start on Thursday.
Tech View: Nifty breaks below 10-week EMA
Nifty50 on Wednesday slipped below its 50-day exponential moving average (EMA) and also its 10-week EMA to close at around 14,550 level. The index formed a bearish candle on the daily chart and negated the higher lows after three straight days. Analysts see weakness ahead.
Asian markets mixed in early trade
Asian markets were largely mixed on Thursday after global equities dipped and US investors considered which stock market sectors would most benefit from strengthening growth. Hong Kong’s Hang Seng index lost 1.07 per cent to 27,619.74.China’s Shanghai Composite fell 0.3 per cent to 3,357.79. Korea’s Kospi was flat at 2,998.12 but Japan’s Nikkei225 rose 0.32 per cent to 28,497.56.
US stocks settled lower
Weakness in technology shares weighed down Wall Street stocks Wednesday, pushing major indices lower despite a rally in petroleum-linked equities. The tech-rich Nasdaq ended down 2.0 per cent at 12,961.89. The broad-based S&P500 index dropped 0.6 per cent to 3,889.14, while the Dow Jones Industrial Average finished marginally negative at 32,420.06.
Laxmi Organic, Craftsman to make debut
Both the stocks will make market debut on Thursday. The Rs 600 crore Laxmi Organic IPO was sold from March 15 to March 17 and was a hit among investors, drawing 106.81 times subscription. The Rs 824 Craftsman issue wasn’t a big draw. It was sold in the Rs 1,488-1,490 range and received just 3.82 times subscription.
Barbeque IPO subscribed 1.3 times on Day 1
The initial public offer of casual dining chain Barbeque Nation Hospitality Limited was subscribed 1.33 times on Wednesday, the first day of subscription. The Rs 453-crore issue received bids for 66,46,830 shares against 49,99,609 shares on offer, as per NSE data.
FPIs sell Rs 1,952 crore worth of stocks
Net-net, foreign portfolio investors (FPIs) were sellers of domestic stocks to the tune of Rs 1951.90 crore, data available with NSE suggested. DIIs were net buyers to the tune of Rs 612.80 crore, data suggests.
MONEY MARKETS
Rupee: The Indian rupee on Wednesday dropped by another 12 paise to close at 72.55 against the US dollar in line with other Asian peers amid growing concerns over rising coronavirus cases.
10-year bonds: India 10-year bond yield rose 0.13 per cent to 6.15 after trading in 6.11-6.15 range.
Call rates: The overnight call money rate weighted average stood at 3.26 per cent, according to RBI data. It moved in a range of 1.90-3.50 per cent.
EVENTS/DATA TO WATCH
- Japan Foreign Bond Investment 20/Mar (05:20 am)
- ECB General Council Meeting (01:30 pm)
- Euro Area Loans to Households YoY Feb (02:30 pm)
- UK Car Production YoY Feb (02:30 pm)
- US Corporate Profits QoQ Q4 (06:00 pm)
- US GDP Price Index QoQ Final Q4 (06:00 pm)
- US Jobless Claims 4-week Average Mar/20 (06:00 pm)
MACROS
Economy to take a hit from Covid spike… The recent surge in India’s Covid cases is a cause for worry as it’s beginning to take a toll in some areas, economists said. But most of them don’t expect a material hit on the economy with the vaccination drive holding out hope that the spread will be contained. The second Covid-19 wave has been much stronger, though it’s still confined to a few states. In just over five weeks, daily Covid cases rose to 53,404 on Wednesday from about 9,000.
Fitch upgrades India growth outlook… Fitch Ratings on Wednesday upgraded India’s growth projection for FY22 to 12.8% from 11% estimated earlier on a stronger carry over effect, a looser fiscal stance and better virus containment. Fitch said the biggest revisions are for Turkey and India and that India’s rebound in the second half of 2020 also took GDP back above its pre-pandemic level. However, it expects GDP growth to ease to 5.8% in FY23, a downward revision of -0.5pp since December.
FM says no downgrade risk for India… Finance minister Nirmala Sitharaman has said India enjoys an investment-grade rating and that she does not see a rating downgrade because of higher spending. Sitharaman said the Centre would transfer Rs 30,000 crore to states as Goods and Services Tax compensation before March end and announced a review of anti-dumping duties that would now come with an end date.
Dividend stripping haunts fund houses… Old deeds have come back to irk some of the mutual fund houses and their wealthy clients. The income-tax department is raking up the sharp practices of the past like ‘dividend stripping’ which let many high net worth individual investors in MFs escape tax. Earlier this month, the tax office asked at least three large fund houses to share information on dividends paid, dividend dates and redemption amounts from FY14 to FY20
PSU banks in for a windfall… Public sector banks are in for a windfall this week with JSW Steel set to close the Bhushan Power and Steel acquisition for Rs 19,350 crore. As the loan has already been fully provided for by lenders, the amount will add to their bottom lines for the quarter ended March 31, 2021. Although JSW had won the bid for Bhushan Power and Steel in 2019, the transaction was pending because of litigation. The Supreme Court recently paved a way for the transaction to get through by directing lenders to return money to JSW in case the enforcement authorities attached Bhushan’s assets.
FPIs face increased I-T scrutiny… The regulatory risk for foreign portfolio investors and global private equity funds in India could rise following an announcement in the Budget that was clarified on Monday. The income-tax department can now go after these funds for violations that go back up to 10 years. Until now it used to be six years. The budget proposal said the I-T department will not have powers to reopen a tax assessment if it’s more than three years old. However, if income worth more than Rs 50 lakh had escaped from tax and this involved ‘assets,’ then the authorities can initiate proceedings for the extended period of 10 years.
