Nifty seen heading for 16,000 mark
Higher margins drive speculators into cheaper options
Share pledging by India Inc promoters rising again
RBI asks PSBs to go for ‘buy-sell swap’ to keep forward premiums low
Now lemme give you a quick glance on the state of the markets.
Dalal Street looked headed for a solid start as Nifty futures on the Singapore Exchange traded some 50 points higher at 7 am. Stocks in other Asian markets also opened steady.
Elsewhere… the dollar held a drop. Bond yields ticked upward. Bitcoin traded at around $36,000 after declining over the weekend amid a cryptocurrency crackdown in China. Crude oil held on to gains. Brent was up 6 cents at $71.92 a barrel.
That said, here’s what is making news?
Nifty is expected to extend its record-breaking run this week. Analysts expect the index to rise to 15,900-16,000 levels in the near term. Nifty gained 1.5% in the last week and touched a record high of 15,733.60, helped by gains in Reliance Industries and optimism over the continued decline in new coronavirus cases in the country. Technical analysts expect RIL to rally further, giving an impetus to the 50-pack.
Higher margins have started impacting intraday index and stock futures trades. Speculators have begun shifting their trades to the relatively cheaper options amid a raging bull market, which has driven Nifty to a record high past 15,700. The so-called peak margin for intraday trades rose to 75% of the minimum margin on stock and index futures from June 1 and will stay that way through August end, after which it will increase to 100% for Nifty, Bank Nifty or stock futures.
Share pledging by promoters are rising again. Data from primeinfobase showed share pledges increased in May compared with the preceding month, despite the stock markets gaining 6.5% and trading close to their lifetime highs. Shares pledged by promoters of companies listed on the NSE increased to 1.53% of the total market capitalisation of all the listed companies from 1.51% in April. In value terms, this increased 9.52% in May to hit a high of Rs 3.35 lakh crore compared with Rs 3.06 lakh crore as of April 30.
RBI is said to have directed PSU banks to cut a derivative deal known as ‘buy-sell swap’ in the currency market, pulling down the forward premiums by as much as 193 basis points in four trading sessions, dealers said. The fall in premiums to enter forward contracts to exchange currencies will help companies with overseas liabilities to cover their currency risk at a lower cost. This should also boost hedging activities by foreign portfolio investors.
LASTLY, New age logistics and supply chain startup Delhivery plans to go public in India anytime between December this year and March 2022, said its co-founder and chief executive Sahil Barua. Delhivery joins a group of late stage homegrown technology firms that are on course to tap the buoyant public markets. Unless there is a severe third wave of Covid-19 affecting market sentiment, it is unlikely to postpone its IPO timeline, the company said.
NOW Before I go, here is a look at some of the stocks buzzing this morning…
Tata Steel is considering prepaying up to $1 billion (Rs 7,315 crore) of foreign loans, taking advantage of a commodity price super cycle that has boosted the company’s cash position.
The Centre may sell its stake in Central Bank of India and Indian Overseas Bank as part of its mega privatisation initiative unveiled in the Budget.
Swiss food and beverages major Nestle said less than 30% of its global portfolio, mostly representing indulgent products, does not meet stringent external “healthfulness” standards.
Varde Partners, a global private equity fund, will invest Rs150 crore for a 7% stake in Reliance Infrastructure as the Anil Ambani-chaired company raises fresh capital to restructure its balance sheet.
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
