STATE OF THE MARKETS
SGX Nifty signals a negative start
Nifty futures on Singapore Exchange traded 51 points, or 0.32 per cent, lower at 15,813.50, signaling that Dalal Street was headed for a negative start on Monday.
- Tech View: Nifty50 on Friday formed a Doji candle on the daily chart, suggesting indecisiveness among traders.
- India VIX: The fear gauge jumped 6 per cent to 14.1 level on Friday over its close at 15 on Thursday.
Asian markets mixed in early trade
Markets across China, Hong Kong and Australia remained closed today on the account of public holidays. Other Asian markets opened mixed, as investors await Federal Reserve’s policy meeting later this week. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.13 per cent.
- Japan’s Nikkei rose 0.37%
- Korea’s Kospi declined 0.14%
- New Zealand’s NZX50 fell 0.15%
US shares ended higher on Friday
US stocks closed modestly higher at the end with few market-moving catalysts and persistent concerns over whether current inflation spikes could linger and cause the US Federal Reserve to tighten its dovish policy sooner than expected.
- Dow Jones inched up 0.04% to 34,479.60
- S&P 500 climbed 0.19% to 4,247.44
- Nasdaq advanced 0.35% to 14,069.42
Dollar index stays flat at 90 level
The US dollar held steady against major currencies on Monday, after posting its biggest weekly gain in more than a month, as traders closed short positions ahead of a Federal Reserve policy meeting this week.
- The dollar index flat at 90.510
- Euro retreated to $1.21075
- Pound gained to $1.4114
- Yen advanced to 109.715 per dollar
- Yuan at 6.3987 against the greenback
Oil holds near multi-year highs
Oil prices held near multi-year highs on Monday, underpinned by an improved outlook for demand as increased Covid-19 vaccinations help lift travel curbs. Brent crude was up 14 cents, or 0.2 per cent, at $72.83. It rose 1.1 per cent last week and hit the highest since May 2019 of $73.09 on Friday. US WTI was also up 14 cents, or 0.2 per cent, at $71.05 a barrel, after reaching the highest since October 2018 at $71.24 on Friday.
Q4 earnings today
Coal India, Indian Overseas Bank, IDFC, Arti Industries, Kajaria Ceramics, JB Chemicals and Pharmaceuticals, IFB Industries, Hemisphere Properties India,, Responsive Industries, Greenply Industries, BF Utilities, Tips Industries and Globus Spirits that will announce their March quarter results today.
FPIs buy Rs 15,520 cr worth shares in June
Net-net, foreign portfolio investors (FPIs) turned buyers of domestic stocks to the tune of Rs 18.64 crore, data available with NSE suggested. DIIs, turned sellers to the tune of Rs 666.36crore, data suggests. Foreign Portfolio Investors (FPI) have made a total net investment of Rs 15,520 crore in Indian equities so far in June.
MONEY MARKETS
Rupee: The Indian rupee on Friday settled marginally lower at 73.07 against the US dollar, marking its fourth loss in a row, even as some positive factors helped the domestic unit stay away from any deep loss.
10-year bonds: India 10-year bond yield declined 0.22 per cent to 6.01 after trading in 6.00 – 6.02 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: Coal India | IDFC | IOB | JP Power
- India WPI Manufacturing YoY May (12:00 pm)
- Inda WPI Fuel YoY May (12:00 pm)
- India WPI Food YoY May (12:00 pm)
- India WPI Inflation YoY May (12:00 pm)
- India Inflation Rate YoY May (05:30 pm)
- Japan Industrial Production MoM Final April (10:00 am)
- Euro Area Industrial Production YoY April (02:30 pm)
- BoE Gov Bailey Speech (06.30 pm)
MACROS
Accounts of FPIs owning Adani stocks frozen
NSDL has frozen the accounts of three foreign funds — Albula Investment Fund, Cresta Fund and APMS Investment Fund — which together own over Rs 43,500 crore worth of shares in four Adani Group companies. These accounts were frozen on or before May 31, as per the depository’s website. The freeze on the three accounts could be because of insufficient disclosure of information regarding beneficial ownership as per the Prevention of Money Laundering Act, said top officials at custodian banks and law firms handling foreign investors.
Big firms rush to redeem liquid funds
Big companies with big purses in May drew large cash from overnight and liquid funds, where they park their short-term surplus cash. These funds saw a net outflow of Rs 57,020 crore in May, reflecting the urgency to hold immediate cash. Low yields also prompted the companies to retreat. Investors liquidated a net of Rs 45,447 crore from liquid funds and Rs 11,573 crore from overnight funds, Amfi data showed.
Preferential shareholders in a quandary
Holders of optionally convertible redeemable preference shares are in a quandary after the Supreme Court ruled recently that investors do not have a “sacrosanct” right to redeem such instruments. The top court also made clear that investors cannot redeem such shares before the National Company Law Tribunal has ruled either way — whether investors can convert such shares or not — under the Insolvency and Bankruptcy Code.
Covid 2.0 hits life insurers hard
The second wave of Covid has pushed up claims for life insurance companies by 5-10 times for April 2021. This follows 1.9 lakh Covid-related deaths since April 1, 2021, which is 17% higher than lives lost to the pandemic in the entire FY21. “Life insurers, while making Covid reserves last year, assumed 50–100% higher Covid deaths for FY22. Our analysis shows that reserves made by them can cover1.5–2x the Covid-related deaths in FY21,” said a report by Macquarie. The 5-10 times increase in the number of death claims is based on enquiries with life insurance companies and industry bodies by Macquarie.
PFRDA in talks to revamps NPS
The pension regulator is in talks with the government for an overhaul of the National Pension System — including changes to the tax regime, allowing insurance agents to hawk the scheme and launching systematic withdrawal plans as well as annuities indexed to inflation to offer higher retur ns — PFRDA Chairman Supratim Bandyopadhyay told TOI in an interview. While implementation of some of the changes has already begun, others such as allowing investors to park their entire corpus into systematic withdrawal plans will require amendments to the law.
