Musk whipsaws Bitcoin again, cryptocurrency drops below $45,000
Dalal Street seeing a rush for IPO filings
RBI rejects suggestions for fresh IBC suspension
Major debt reduction underway in India Inc
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.
Dalal Street looked headed for a positive start this morning. Nifty futures on the Singapore Exchange traded some 28 points higher ahead of the opening of Indian markets. In the rest of Asia, shares rose in Australia but slipped in Japan and South Korea as spikes in coronavirus cases in some parts of the region and lingering inflation concerns weighed on investor sentiment. US stocks ended in the green on Friday after gathering price pressures pushed equity markets globally to their worst weekly loss since February. The dollar edged up against its major peers. Oil prices inched higher after seesawing last week. Gold traded steady at $1,845 an ounce in international markets.
That said, here’s what else is making news.
Dalal Street is seeing a rush for IPO filings. With the stock market showing resilience despite surging Covid cases and weakening economic fundamentals, around 10 companies have filed IPO prospectus with Sebi in the first half of May to collectively raise nearly Rs 20,000 crore. Top merchant bankers said availability of liquidity globally, early backers of companies eyeing an exit and maturing businesses looking for funds for the next phase of growth are some of reasons for this rush.
Nifty traders are anticipating strong volatility ahead. Many of them have initiated a market-neutral strategy called Long Straddle on weekly Nifty options on Friday, expecting a major spike in choppiness. The strategy involves simultaneous purchase of Nifty Call and Put options to benefit from sharp movements on either side. The strategy will throw up gains as long as the market moves, irrespective of its direction. The counterparty, or the seller of the Call and Put, would receive the premium.
India Inc is witnessing major debt reduction. A study of data for 78 of the 134 NSE500 companies that have reported FY21 earnings so far showed most of them are using improved cash flows to cut debt in a bid to improve ratings and equity valuations amid widespread disruptions to business due to the Covid-19 pandemic. The study excluded banks and finance firms. Aggregate debt for the 134 companies has fallen by Rs 2 lakh crore (about 18%) in FY21 compared with 14% increase (Rs 1.38 lakh crore) seen in FY20.
Capital goods major L&T continued its trend of order accumulation even as it arrested execution delays in March quarter, which analysts say could finally give the stock a push to break through the tight range in which it has been trading over the past three months. A pickup in the execution rate during March quarter could lend more heft to the expectation that the company will be able to match the growth rate of revenues and order inflows.
Elon Musk continued to whipsaw the price of Bitcoin, briefly sending it to the lowest since February after implying in a Twitter exchange Sunday that Tesla may sell or has sold its cryptocurrency holdings. Bitcoin slid below $45,000 for the first time in almost three months after the billionaire owner of the electric-car maker seemed to agree with a Twitter post that said Tesla should divest what at one point was a $1.5 billion stake in the largest cryptocurrency.
Lastly, RBI has shot down suggestions of a fresh suspension of the Insolvency & Bankruptcy Code due to the second wave of Covid, while making it clear that banks can still restructure distressed but viable loans, ensuring that their balance sheets remain transparent. In initial discussions with the government, RBI has indicated a freeze will not help anyone in the long run as it will only show lower level of NPAs.
NOW Before I go, here is a look at some of the stocks buzzing this morning…
Adani Green Energy is in advanced talks to acquire privately-held SB Energy Holdings, according to people familiar with the matter.
The PE arm of Goldman Sachs is all set to acquire about 33% stake in Hyderabad-based GVK Biosciences. The deal will value the company at Rs 7,300 crore ($1 billion).
Westlife Development, which operates McDonald’s restaurants in southern and western region in India, plans to invest Rs 100 crore to open up to 30 outlets of the quickservice restaurant brand in the current financial year.
Reflecting the buoyancy in the markets, brokerage Geojit Financial Services has nearly doubled its net profit at Rs 36.8 crore for the quarter to March, up from Rs 18.8 crore a year ago.
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!
