STATE OF THE MARKETS
SGX Nifty signals positive start
Nifty futures on Singapore Exchange traded 51 points, or o.33 per cent, higher at 15,723.50 in signs that Dalal Street was headed for a positive on Thursday.
Tech View: Nifty50 on Wednesday formed a bearish candle on the daily chart and negated the formation of higher lows that it has been making in the past few sessions, suggesting weakness ahead.
India VIX: The fear gauge eased 3 per cent to 14.75 level on Wednesday over its close at 15.22 on Tuesday.
Asian markets cautious in early trade
Asian stock markets on Thursday opened on a cautious ahead of US inflation data and the European Central Bank’s policy meeting later in the day. MSCI’s broadest index of Asia-Pacific shares outside Japan was up by 0.54 per cent in early trade.
- Japan’s Nikkei gained 0.39%
- Korea’s Kospi advanced 0.37%
- Australia’s ASX 200 rose .47%
- China’s Shanghai Composite added 0.64%
- Hong Kong’s Hang Seng climbed 0.73%
US stocks ended lower
Wall Street ended a see-saw session lower on Wednesday as market participants awaited inflation data for clues as to when the US Federal Reserve might tighten its dovish monetary policy.
- Dow Jones declined 0.44% to 34,447.14
- S&P500 index dropped 0.18% to 4,219.55
- Nasdaq Composite fell 0.09% to 13,911.75
Dollar near five-month low
The dollar continued to hover near a five-month low versus major peers on Thursday as investors looked to key US inflation data and a European Central Bank meeting later in the day to potentially set the direction for currency markets.
- The dollar index slipped to 90.137
- Euro flat at $1.2178
- Pound steady at $1.41514
- Yen declined to 109.62 per dollar
- Yuan at 6.3826 against the greenback
Crude oil prices fall in early trade
Oil prices slid on Thursday as inventory data in the United States, the world’s top oil consumer, showed a surge in gasoline stocks that indicates weaker-than-expected fuel demand at the start of summer, the country’s peak season for motoring. Brent crude oil futures were down 34 cents, or 0.5%, at $71.88 a barrel by 0108 GMT, while U.S. oil futures declined by 36 cents, or 0.5%, at $69.60 a barrel.
Q4 earnings today
Steel Authority of India (SAIL), NHPC, Century Plyboards (India), Cera Sanitaryware, Mazagon Dock Shipbuilders, eClerx Services, Responsive Industries, Tide Water Oil Company, National Fertilizers and Mayur Uniquoters are among companies that will announce their March quarter results today.
FPIs sell shares worth Rs 846 crore
Net-net, foreign portfolio investors (FPIs) turned sellers of domestic stocks to the tune of Rs 846.37 crore, data available with NSE suggested. DIIs, turned sellers to the tune of Rs 271.7 crore, data suggests.
MONEY MARKETS
Rupee: Falling for the second day in a row, the rupee closed lower by 8 paise at 72.97 against the US currency on Wednesday amid a lacklustre trend in domestic equities.
10-year bond: India 10-year bond yield climbed 0.17 per cent to 6.02 after trading in 6.01 – 6.05 range.
Call rates: The overnight call money rate weighted average stood at 3.09 per cent, according to RBI data. It moved in a range of 1.90-3.40 per cent.
DATA/EVENTS TO WATCH
- Q4 Earnings: Century Ply | CERA | Kalyani Forge | NHPC | SAIL
- Australia Consumer Inflation Expectations June (06:30 am)
- Australia HIA New Home Sales MoM May (09:30 am)
- Euro Area Deposit Facility Rate (05:15 pm)
- ECB Interest Rate Decision (05:15 pm)
- US Core Inflation Rate YoY May (06:00 pm)
- US Jobless Claims 4-week Average June/05 (06:00 pm)
- US Initial Jobless Claims 05/June (06:00 pm)
- China New Yuan Loans May
- Opec Monthly Report
MACROS
External hands may manage RBI forex reserves
India’s central bank is likely to engage external financial consultants to manage a part of its record $600 billion foreign exchange reserves, dusting off a playbook used nearly two decades ago when the corpus crossed the 12-digit threshold for the first time. RBI is weighing the option of engaging specialist money managers to help improve yields on the reserves fund as rates hit record lows globally.
IBC resolution rate slow at 24%
Bad loan resolution from bankruptcy cases continued to disappoint with a recovery rate of 24% as extended timelines took a toll on the recovery and rehabilitation of companies. Recoveries from earlier resolution mechanisms resulted in a loss of nearly 70%. Out of the total 4,300 cases that have been admitted to bankruptcy courts since FY17, only 8% has been resolved and nearly 40% of the cases are still pending.
Flows to equity MFs hit 14-month high
Flows into equity mutual funds soared to a 14-month high in May as the renewed strength in the stock market prompted investors to pump more money into equity products. Investors poured ₹10,083 crore into equity schemes, the third straight month of inflows, but pulled money out of debt schemes, which have been out of flavour because of lower returns.
Subbarao says RBI shouldn’t print money
RBI can directly print money and finance the government, but it should avoid doing so unless there is absolutely no alternative, former RBI governor D Subbarao on Wednesday said while pointing out that India is ‘nowhere’ near such a scenario. Subbarao said the government can consider Covid bonds as an option to raise borrowing, not in addition to budgeted borrowing, but as a part of that.
LIC chief’s term extended to shepherd IPO
The government Wednesday extended the tenure of LIC Chairman MR Kumar by another nine months, until March 2022, to ensure the smooth sail of the insurer’s proposed initial public offering that would be the largest ever in the country. The stake sale is crucial for the Narendra Modi government to showcase its commitment to monetise assets and at the same time raise resources when state spending is surging due to the Covid-19 related strain on the economy.
Templeton plans to challenge Sebi ban
Franklin Templeton Mutual Fund is considering challenging a Sebi order on the fund house’s mismanagement of its debt funds at the Securities Appellate Tribunal (SAT). Sebi had fined the fund house Rs 5 crore on Monday and also barred it from launching new debt schemes for two years. “While we are still in the process of studying the order, basis our initial review, we disagree with the findings in the Sebi order and intend to file an appeal with the (SAT),” a letter from Franklin MF president Sanjay Sapre said
Govt hikes MSPs for 14 kharif crops
With the Centre emphasising its commitment to minimum support prices in the face of an agitation by farm unions against the central farm laws, the Union cabinet on Wednesday announced new support prices for 14 kharif (summer sown) crops with boosts to oilseeds, pulses and less water-consuming nutricereals like Bajra and Jowar. The MSP of most popular crop paddy got a modest hike of Rs 72 per quintal for 2021-22 marketing season compared to previous year while the highest absolute increase in MSP over the previous year was for sesamum, a nutritional oil seed, (Rs 452 per quintal), followed by tur and urad dals (Rs 300 per quintal each).
