STATE OF THE MARKETS
SGX Nifty signals a negative start
Nifty futures on Singapore Exchange traded 15 points, or 0.10 per cent, lower at 15,616 in signs that Dalal Street was headed for a negative start on Wednesday.
- Tech View: Nifty50 on Tuesday snapped a seven-day winning streak and formed a small bearish candle on the daily chart.
- India VIX: The fear gauge jumped 3 per cent to 17.39 level on Tuesday over its close at 16.88 on Monday.
Asian markets mixed in early trade
Asian shares opened mixed on Wednesday in cautious trade as investors evaluated the latest US data and awaited key job numbers due later this week. MSCI’s broadest index of Asia-Pacific shares outside Japan was up by 0.15 per cent.
- Japan’s Nikkei gained 0.33%
- Korea’s Kospi advanced 0.20%
- Australia’s ASX 200 jumped 0.58%
- Hong Kong’s Hang Seng fell 0.12%
- China’s Shanghai Composite dipped 0.24%
US shares settled mixed
Wall Street stocks finished little changed on Tuesday as renewed concerns about rising inflation and higher interest rates offset strong manufacturing data and a rally in petroleum-linked shares.
- Dow Jones up 0.13% to 34,575.31.
- S&P 500 slipped 0.05% to 4,202.04.
- Nasdaq dipped 0.09% to 13,736.48.
Dollar index trades below 90 level
The dollar clung to small gains from overnight on Wednesday, edging back from near a five-month trough versus major peers, as a pick up in US manufacturing kept bets alive for a quicker normalisation of Federal Reserve policy.
- Dollar Index traded below 90 level
- Euro pulled back to $1.2222.
- British Pound rose 0.9% to $1.4160.
- Yen gained 0.07% to 109.62 per dollar.
- Yuan appreciated to 6.376 against the greenback.
Brent crude above $70 a barrel mark
In commodities markets, prospects for a solidifying global economic recovery from pandemic lockdowns lifted oil prices, with Brent crude trading at its highest levels since March, despite the OPEC+ alliance agreeing to hike output in July. Brent futures rose 0.6 per cent to $70.67 per barrel and US West Texas Intermediate crude added 0.56 per cent to $68.10 per barrel.
Q4 earnings today
Motherson Sumi Systems, Muthoot Finance, Ratnamani Metals & Tubes, PVR, MTAR Technologies, Panacea Biotec, NRB Bearings, Dhunseri Ventures, Lyka Labs, Jenburkt Pharmaceuticals and Burnpur Cement are among companies that will announce their March quarter results today.
FPIs sell stocks worth Rs 450 crore
Net-net, foreign portfolio investors (FPIs) turned sellers of domestic stocks to the tune of Rs 449.86 crore, data available with NSE suggested. DIIs were net buyers to the tune of Rs 230.49 crore, data suggests.
MONEY MARKETS
Rupee: The rupee fell by another 28 paise to end at 72.90 against the US currency, extending losses for the second straight session, due to dollar buying by banks and higher crude oil prices.
10-year bonds: India 10-year bond yield gained marginally 0.05 per cent to 6.02 after trading in 6.01 – 6.03 range.
Call rates: The overnight call money rate weighted average stood at 3.18 per cent, according to RBI data. It moved in a range of 1.90-3.50 per cent.
DATA/EVENTS TO WATCH
- Q4 earnings: Motherson Sumi | Muthoot Finance | PVR
- India Balance of Trade Prel May (06:30 pm)
- UK Mortgage Lending April (02:00 pm)
- UK Mortgage Approvals April (02:00 pm)
- BoE Consumer Credit April (02:00 pm)
- ECB President Lagarde Speech (10:40 pm)
MACROS
Moody’s says India rating is under threat
The second wave of Covid-19 is a threat to economic recovery and has sharpened risks to India’s sovereign credit profile, Moody’s Investor Service said on Tuesday. The second wave will further delay revival to pre-pandemic levels, it said, forecasting a pick-up in the second half of the current year and 9.3% growth in FY22. Moody’s expects an outright decline in economic activity to be limited to the April-June quarter.
Manufacturing hits 10-month low
The second wave of the Covid-19 pandemic and lockdowns imposed by states hit India’s industrial activity in May, with manufacturing activity dropping to the lowest in 10 months, forcing producers to reduce inventory and accelerating job shedding, a private survey showed Tuesday. The IHS Markit PMI for manufacturing fell to 50.8 in May from 55.5 in April. A reading above 50 indicates expansion, while below that signals contraction.
Consumption take bit hit from Covid 2.0
Sales of automobiles, televisions, air-conditioners, smartphones, refrigerators and washing machines fell sharply in May, with the Covid second wave and the ensuing local lockdowns disrupting both production and retail channels, even as consumers cut back spending. Industry executives across sectors though expect June to see some recovery as states start easing lockdown restrictions and the tidal wave of infections recedes.
Banks reluctant to deal with crypto bourses
Top banks are reluctant to let cryptocurrency exchanges and traders open accounts, despite RBI clearing the air on Monday that payment services cannot be denied on the basis of an earlier regulatory ban that was struck down by the Supreme Court in 2020. Leading institutions such as SBI, HDFC Bank, Axis Bank and ICICI Bank have told various crypto exchanges that services related to crypto trades are unlikely to be resumed immediately.
FPI investors not sharing details
Large investors in foreign funds and persons controlling them are unwilling to disclose their personal information such as mobile number, email ID and income details with Indian depositories and Sebi. Top multinational banks, which act as custodians of these offshore funds or FPIs have recently told the capital market regulator about the reluctance to share certain details sought by the depositories on the grounds of data confidentiality.
