STATE OF THE MARKETS
SGX Nifty signals positive start
Nifty futures on Singapore Exchange traded 60 points, or 0.39 per cent, higher at 15,640 in signs that Dalal Street was headed for a positive opening on Tuesday.
Tech View
Nifty50 formed a bullish candle on the daily chart. This instilled confidence among traders. Analysts said there is a good possibility of Nifty50 reclaiming the 15,700 level in the coming days as long as it stays above the crucial support zone at 15,370.
India VIX
The fear gauge eased 3 per cent to 16.88 level on Monday, which is at the lowest levels since February 28, 2020.
Asian markets mixed in early trade
Asian shares opened on a cautious note, with a dearth of strong market-moving events after the US market was closed for a holiday. MSCI’s broadest index of Asia-Pacific shares outside Japan was up by 0.36 per cent.
- Japan’s Nikkei declined 0.38%
- Hang Seng gained 0.20%
- Seoul’s Kospi jumped 0.77%
- Australia’s ASX 200 shed 0.44%
- Shanghai Composite slipped 0.07%
US stock exchanges shut on Monday
US stock exchanges remained closed on Monday on account of Memorial Day. Wall Street had ended with modest gains in the previous session, thanks to buying in technology and healthcare counters. On Friday:
- S&P500 index rose 0.1%to 4,204.11
- Dow Jones gained 0.2% to 34,529.45
- Nasdaq added 0.1% to 13,748.74.
Dollar at multi-month low
The dollar languished near multi-month lows versus major peers as traders pondered the prospects for early policy normalisation by the Federal Reserve ahead of a key jobs report at the end of the week.
- The dollar index slipped 0.08% to 89.745.
- Euro gained marginally to $1.2226.
- British Pound rises 0.2% to $1.425.
- Yen gained 0.28% to 109.53 per dollar.
- Yuan appreciates to 6.371 against the greenback.
Q4 earnings today
ITC, Gujarat Gas, JM Financial, Radico Khaitan, Balrampur Chini Mills, Tata Coffee, Sterling and Wilson Solar, Fineotex Chemicals, Emami Paper Mills, Salasar Techno Engineering, and TV Vision are among companies that will announce their March quarter results today.
FPIs buy stocks worth Rs 2,412 crore
Net-net, foreign portfolio investors (FPIs) turned buyers of domestic stocks to the tune of Rs 2,412.39 crore, data available with NSE suggested. DIIs turned buyers to the tune of Rs 179.78 crore, data suggests.
Oil prices near $70 mark on demand optimism
Oil prices rose on Tuesday ahead of an OPEC meeting and on optimism that fuel demand will grow in the months ahead with the summer driving season starting in the United States, the world’s top oil consumer. Brent crude futures for August gained 56 cents, or 0.8 per cent, to $69.88 a barrel by 0125 GMT. US WTI crude for July was at $67.33 a barrel, up $1.01, or 1.5 per cent from Friday’s close, with no settlement price for Monday due to a U.S. public holiday.
MONEY MARKETS
Rupee: Halting its three-day winning run, the rupee on Monday tumbled by 17 paise to close at 72.62 against the American currency as stronger US dollar against key rivals and surging crude oil prices weighed on sentiment.
10-year bond: India’s 10-year bond yield climbed 0.32 per cent to 6.02 after trading in the 6.01 – 6.03 range.
DATA/EVENTS TO WATCH
- India Markit Manufacturing PMI May (10:30 am)
- India Balance of Trade Prel May (05:50 pm)
- Japan Jibun Bank Manufacturing PMI Final May (06:00 am)
- China Caixin Manufacturing PMI May (07:15 am)
- UK Nationwide Housing Prices YoY May (11:30 am)
- UK Markit/CIPS Manufacturing PMI Final May (02:00 pm)
- US Markit Manufacturing PMI Final May (07:15 pm)
- BoE Gov Bailey Speech (08:30 pm)
MACROS
Bond yields signalling boom time
The relative stability in bond yields, despite lower government revenue through the lockdown, suggests the needle is pointing more toward an impending boom than gloom and doom. So, why aren’t yields spiking even after North Block’s announcement last week to borrow Rs 1.58 lakh crore more to fund the shortfall in levy collections? That’s because the government’s cash balance with its banker, the central bank, has reached the highest in nearly five years — at Rs 4.2 lakh crore. “The high government cash balances has comforted the market that the Centre need not borrow urgently,” said Anand Bagri, head- domestic Markets at RBL Bank.
ABB in for a bull run
Shares of ABB India on Monday decisively broke past a 13-year consolidation phase to trade above Rs 1,600 apiece. If it sustains above that level, it can easily give a 20% return in the near term, according to technical analysts. ABB India is better placed to gain from the expected pickup in capex in the coming months, said analysts. “ABB has given breakout after consolidating for 13 years from 2008 to 2021 and with strong capex recovery, one can expect the stock to continue its upward journey,” said Ashish Chaturmohta, director-research, Sanctum Wealth.
RBI eases banks’ crypto confusion
In a positive move for cryptocurrency (virtual) investors and related businesses, RBI on Monday told banks to stop citing its April 2018 circular to deny services to those dealing in crypto as the same was set aside by the Supreme Court. RBI has asked banks to continue doing due diligence on cryptocurrency-related dealings of its customers. RBI’s latest circular comes after private banks and payment gateway platforms suspended services to customers who dealt with cryptocurrency such as bitcoins.
FY21 GDP degrowth steepest in 70 years
India’s economy grew at a better-than-expected rate of 1.6% in the March quarter from a year ago, but the severe second Covid wave has created economic uncertainty and dampened sentiment, economists said. The fourth-quarter performance helped moderate the full FY21 contraction to 7.3%, from the 8% decline estimated earlier, still the steepest in at least 70 years.
Eicher has limited upside for now
The trend of growing sales volume of Eicher Motors seen in the March 2021 quarter is likely to continue in the current and the next fiscal year given the sustained demand for its recently launched model, rising export, and scheduled new bike launches. However, a steep valuation premium over the mass market peers and intense competition in the premium bike segment may limit the upside for the stock in the medium term.
Govt FY21 deficit at 9.2%
The Centre closed last year with a fiscal deficit of 9.2% of GDP, against the revised estimate of 9.5%, on account of better-than-expected revenue receipts. However, this is the highest fiscal deficit on record for the Centre Fiscal deficit was estimated at Rs 18.2 lakh crore against Rs18.4 lakh crore in the revised estimates presented by finance minister Nirmala Sitharaman at the start of February. Better than expected GDP numbers also helped.
