Here’s breaking down the pre-market actions.
STATE OF THE MARKET
SGX Nifty signals flat start
Nifty futures on the Singapore Exchange traded 19 points, or 0.01 per cent, higher at 7 am (IST) in signs that Dalal Street was headed for a flat start with a positive bias.
Tech View: 14,450 level to act as trend decider
Dalal Street analysts said the market may be heading for a make or break kind of day in the next trading session which can be prompted by the RBI monetary policy outcome. However, bulls need a close above 14,850 levels to get their mojo back in the near term whereas a close below 14,600 shall set the tone for a sharp decline with initial targets placed around 14,263
Asian markets rise in early trade
Asia equities are set for a sluggish open on Wednesday after Wall Street pulled back from record highs reached in previous sessions, as investors eye the upcoming earnings season for more signs of a recovery following a series of strong U.S. economic data. Japan’s Nikkei 225 futures fell 0.1 per cent, while Australian S&P/ASX 200 futures rose 0.04 per cent.
Treasury yields edge lower
US Treasury yields dipped, with 5-year notes leading the decline, on investor views that market pricing based on an earlier-than-expected tightening by the Fed was too aggressive. The dollar index fell 0.259 per cent, with the euro down 0.05 per cent to $1.1869.
US stocks settled lower
The Dow Jones Industrial Average fell 96.95 points, or 0.29 per cent, to 33,430.24, the S&P 500 lost 3.97 points, or 0.10 per cent, to 4,073.94 and the Nasdaq Composite dropped 7.21 points, or 0.05 per cent, to 13,698.38.
Crude oil pare losses
Oil prices edged higher on Wednesday on the prospects for stronger global economic growth amid increased COVID-19 vaccinations and a report that crude inventories in the United States, the world’s biggest fuel consumer, fell. Brent crude futures for June rose by 34 cents, or 0.5 per cent, to $63.08 a barrel by 0123 GMT while US West Texas Intermediate crude for May was up 32 cents, or 0.5 per cent, to $59.65.
FIIs sell Rs 1,093 crore worth of stocks
Net-net, foreign portfolio investors (FPIs) were sellers of domestic stocks to the tune of Rs 1,092.75 crore on Tuesday, data available with NSE suggested. DIIs were net buyers to the tune of Rs 416.59 crore, data suggests.
MONEY MARKETS
Rupee: The rupee pared its initial gains to close down by 12 paise at 73.42 against the US currency on Tuesday amid concerns that rising COVID-19 cases and subsequent lockdowns in some states may hurt the economic recovery.
10-year bonds: India 10-year bond yields were flat at 6.122 after trading in 6.108 – 6.135 range.
MACROS
Record spurt in Covid cases… Amid another record spurt in Covid-19 infections in India on Tuesday, active cases in the country crossed 8 lakh, just two days after going past the 7 lakh mark. This was the fastest 1 lakh rise in active cases since the outbreak of the pandemic, with the count rising by a record 54,000 on Tuesday alone. The previous fastest increase in active cases across 1-lakh milestones was three days, recorded twice during the ongoing second wave.
Covid 2.0 may turn RBI more dovish… The second wave of Covid in India will compel RBI governor Shaktikanta Das to stick to an accommodative monetary policy even as he is expected to announce status quo on policy rates on Wednesday. The accommodative stance is expected to be buttressed by long-term repos and the purchase of government bonds from banks. Adding to the dovishness in the RBI’s stance would be a likely reduction in inflation forecast.
Covid curbs hurt economic activity… Fresh curbs to control the pandemic are beginning to affect economic activity indicators. Besides Nomura’s business resumption index, ICICI Securities’ financial conditions index and demand conditions index are seeing major dips. Financial conditions worsened in March, tightening to their worst level since the onset of the pandemic. ICICI Securities’ Financial Condition Index (FCI) score fell to 8.5 in March, down from 9.6 in February and 8.8 in March 2020. From March 2020 to February 2021, FCI averaged 9.3, reaching its best score in October-December 2020.
IMF raises India’s growth outlook… IMF on Tuesday raised India’s growth projections for 2021-22 to 12.5% from its January estimate of 11.5%, making it the fastest growing major economy in the world. The latest upgrade from the IMF for India’s economy comes against the backdrop of a surge in Covid-19 infections, which have prompted some local lockdowns and could have an impact on overall growth.
Rivals Airtel, Jio ink spectrum deal… Telecom giants Airtel and Reliance Jio, which have often been at loggerheads, came together for a near Rs 1,500-crore spectrum trading deal as they took steps to rationalise and monetise their spectrum holdings just weeks after the conclusion of a mega airwave sale by the government. According to the agreement, Jio will acquire some of Airtel’s spectrum in the 800 MHz band in AP, Delhi and Mumbai circles at an aggregate deal value of about Rs 1,497 crore. Airtel will receive Rs 1,038 crore from Jio for the transfer.
REIT investment cap may be cut… Sebi is weighing a proposal that seeks to reduce the minimum investment limit in REITs to facilitate retail participation in this asset class, especially at a time when New Delhi is keen to monetise some of its income-earning properties. While the current floor is Rs 50,000, the threshold could even be halved. The government is said to have reached out to the Sebi with its proposal.
India equities see Rs 2.74L cr FII inflows… Indian equity markets witnessed a strong net inflow of foreign portfolio investments (FPI) of Rs 2.74 lakh crore during the concluded fiscal, a finance ministry statement said Tuesday. The robust inflows were a result of a faster-than-expected economic recovery and reflected the confidence of foreign investors in the fundamentals of the Indian economy, the statement said, quoting data from NSDL.
Govt says no to vax for 18-year-olds… The government on Tuesday rejected suggestions to immediately open up Covid-19 vaccination for all above18 years of age on grounds that it needed to prioritise the vulnerable groups. This demand was raised by Maharashtra and Delhi chief ministers in the wake of a surge in new infections. “Let us understand that the basic aim of vaccination is never whoever wants it, gets it. The aim is whoever needs it, gets the vaccine,” health secretary Rajesh Bhushan said at a press briefing
