STATE OF THE MARKETS
SGX Nifty signals a negative start
Nifty futures on the Singapore Exchange traded 65 points, or 0.43 per cent, lower at 15,161 signaling that Dalal Street was headed for a negative start on Monday.
- Tech View: Nifty50 broke above its crucial resistance at 15,150 level on Friday and formed a solid bullish candle on the daily chart to set sights on the 15,300 level.
- India VIX: The fear gauge eased 2.91 per cent to 19.08 level on Friday. India VIX needs to hold below 20 zones to extend the bullish market momentum towards new life time territory, analysts said.
Asian markets off to cautious start
Asian shares got off to a cautious start on Monday as investors anxiously awaited a key read on US inflation this week for guidance on monetary policy. MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.19 per cent.
- Japan’s Nikkei jumps 0.47 per cent
- Hang Seng edges 0.22 per cent higher
- Seoul’s Kospi inches up 0.40 per cent up
- Australia’s ASX 200 adds 0.12 per cent
- China’s Shanghai Composite rises 0.07 per cent
US stocks ended mostly lower on Friday
US stocks ended a wobbly Friday with mixed results on Wall Street. The S&P500 index gave up an early gain and ended 0.1 per cent lower Friday, giving the benchmark index its second losing week in a row.
- Dow Jones rose 0.36 per cent to 34,207.84.
- S&P500 index shed 0.08 per cent to 4,155.86
- Nasdaq Composite dropped 0.48 per cent to 13,470.99
Dollar near 3-month low
The dollar stood near its lowest level in three months against a resurgent euro, struggling for traction as investors pared earlier bets the US Federal Reserve may soon be ready to taper its stimulus. The dollar index hovered at 90.027.
- Euro dropped to $1.2179.
- British pound fell to $1.4144
- Japanese yen unchanged at 108.92
- China’s yuan at 6.4331 against greenback
Q4 earnings today
Industries, The Ramco Cements, Mahanagar Gas, Poly Medicure, Balaji Amines, Lakshmi Machine Works, India Cements, JSW Holdings, JK Paper, , Barbeque Nation Hospitality and ADF Foods are among companies that will announce their March quarter results today.
DIIs buy equities worth Rs 649 cr
Net-net, foreign portfolio investors (FPIs) turned buyers of domestic stocks to the tune of Rs 510.16 crore, data available with NSE suggested. DIIs, turned buyers to the tune of Rs 649.1 crore, data suggests. Overseas investors withdrew Rs 4,444 crore from Indian markets in May so far amid concerns over the second wave of the coronavirus pandemic.
MONEY MARKETS
Rupee: The rupee gained 0.61 per cent to end at 72.83 per dollar on Friday, its strongest since March 30 and up 0.4 per cent versus its previous close of 73.10. On the weekly basis, the unit rose 0.6 per cent, posting its fourth straight week of gains.
10-year bond: India 10-year bond yield edged up 0.15 per cent to 5.98 after trading in 5.95 -5.98 range.
Call rates: The overnight call money rate weighted average stood at 3.19 per cent, according to RBI data. It moved in a range of 1.90-3.45 per cent.–
DATA/EVENTS TO WATCH
- Q4 Earnings: Grasim | India Cements | JK Paper | Ramco Cement
- BoJ Gov Kuroda Speech (04:35 pm)
- US Chicago Fed National Activity Index April (06:00 pm)
- US Fed Brainard Speech (06:30 pm)
- Russia GDP YoY April (09:30 pm)
MACROS
Urban fund remittances down
Fund remittances to the less-affluent hinterland from the shuttered urban pockets have dropped up to 30 per cent in May, reflecting the impact of localized lockdowns on business activity – and employment in the unorganised sector. Remittance companies say the impact is more visible in Maharashtra and Delhi, compared with Gujarat and Karnataka, with migrant labour returning to their rural homes from several of the affected pockets
Centre to defend Cairn case vigorously
The Centre said on Sunday that it is vigorously defending its case in the legal dispute with Cairn over the arbitration award and that it is committed to pursuing all legal avenues in this dispute worldwide. A finance ministry statement said the government has filed an application on March 22 this year to set aside the highly flawed December 2020 international arbitral award in The Hague Court of Appeal. Cairn Energy recently sued loss-making Air India in a US court to force recovery of a $1.2 billion international arbitration award it won against the Indian government’s retrospective tax claim.
NBFCs slow down lending
Hit with a drop in instalment collections due to the Covid-induced lockdowns across the country, non-bank lenders are slowing fresh disbursements and even halting them for unsecured loans. From an average default rate in collection efficiency at 2-3 per cent in pre-Covid times, NBFCs are now seeing 6-8 per cent of borrowers missing their payment schedules during the second wave of the pandemic.
NCLT ruling on DHFL foxes banks
Stunned by the NCLT ruling on DHFL, bankers held long meetings with their legal counsels over the weekend to consider moving the appellate tribunal to challenge it or exercising their ‘commercial wisdom’ to vote against the proposal of promoter Kapil Wadhawan, who is lodged in Mumbai’s Taloja Jail. Several banks and creditors are in favour of moving the NCLAT. A final decision is expected by Monday. Bankers believe the case may set a precedent for corporate insolvency resolution.
Cement on firm recovery path
The industry is on a solid recovery track, and the wheels have not come off for the primary infra provider because of the anticipated rural demand and state expenditure on roads, ports, and other capitalintensive projects that would need concrete in copious quantities. So, the stellar Q4 show should continue well into FY22. Volumes in the March quarter expanded more than a fourth, and nearly 13 per cent sequentially, driven by strong demand momentum and a low base. Analysts say volumes are expected to witness a strong bounce-back as seen in FY21 and UltraTech, Ambuja, Shree Cement, JK Lakshmi, Birla Corp and Dalmia Cement are their top picks.
Shareholders force Jindals to review JPL sell plan
Facing pushback from his shareholders, JSPL Chairman Naveen Jindal is considering simplifying the proposed plan to sell the firm’s power business to himself. Last week, group flagship JSPL was forced to postpone an extraordinary general meeting that was to be held on Monday, May 24, to approve the board’s decision to divest JSPL’s 96.42 per cent stake in its material subsidiary Jindal Power (JPL) to Worldone Private, a company of the promoter family, for Rs 3,015 crore.
