STATE OF THE MARKETS
SGX Nifty signals a positive start
Nifty futures on Singapore Exchange traded 66 points, or 0.42 per cent, higher at 15,836, signaling that Dalal Street was headed for a positive start on Wednesday.
- Tech View: Nifty50 on Tuesday formed a bearish candle on the daily chart, as traders lacked conviction at higher levels.
- India VIX: The fear gauge eased 2 per cent to 14.74 level on Tuesday over its close at 15.06 on Monday.
Asian markets rise in early trade
Asian markets opened higher on Wednesday, tracking the second straight day of gains on Wall Street, as worries over US rate policy eased as US Fed Chair Jerome Powell promised not to raise interest rates too quickly. MSCI’s broadest index of Asia-Pacific shares outside Japan was up by 0.32 per cent.
- Japan’s Nikkei rose 0.02%
- Korea’s Kospi gained 0.19%
- China’s Shanghai Composite added 0.12%
- Hong Kong’s Hang Seng gained 0.82%
US shares ended higher
Wall Street rebounded in overnight trade as Federal Reserve Chairman Jerome Powell vowed not to raise rates too quickly as the dollar and oil gave up earlier gains. The Nasdaq ended at a record high lifted by top-shelf tech companies as investors shifted their focus to growth stocks.
- Dow Jones climbed 0.20% to 33,945.58
- S&P 500 gained 0.51% to 4,246.44
- Nasdaq rose 0.79% to 14,253.27
Dollar weakens after Powell comments
The US dollar held at lower levels on Tuesday after Federal Reserve Chair Jerome Powell reaffirmed the US central bank’s intent to encourage a “broad and inclusive” recovery of the job market, and not to raise interest rates too quickly based only on the fear of coming inflation.
- Dollar index fell to 91.733
- Euro gained to $1.1940
- Pound inched up to $1.3935
- Yen shed to 110.65 per dollar
- Yuan stands at 6.4813 against dollar
Q4 earnings today
Apollo Hospitals Enterprises, Allcargo Logistics, Schneider Electric Infrastructure, Hindustan Construction Company, Andrew Yule & Company, Sharda Motor Industries, Munjal Showa and Madras Fertilizers are among the companies that will announce their March quarter results today.
FPIs sell shares worth Rs 1,028 cr
Net-net, foreign portfolio investors (FPIs) turned sellers of domestic stocks to the tune of Rs 1027.94 crore, data available with NSE suggested. DIIs, turned buyers to the tune of Rs 302.45 crore, data suggests.
MONEY MARKETS
Rupee: The Indian rupee depreciated 27 paise to close at 74.37 against the US dollar on Tuesday in its second straight day of losses following a stronger dollar overseas and elevated crude oil prices.
10-year bond: India 10-year bond yield retreated marginally 0.07 per cent to 6.03 after trading in 6.02 – 6.04 range.
Call rates: The overnight call money rate weighted average stood at 3.16 per cent, according to RBI data. It moved in a range of 1.90-3.45 per cent.
DATA/EVENTS TO WATCH
- BoJ Monetary Policy Meeting Minutes (05:20 am)
- Japan Jibun Bank Services PMI Flash Jun (06:00 am)
- Japan Coincident Index Final April (10:30 am)
- ECB Non-Monetary Policy Meeting (01:30 pm)
- Euro Area Markit Composite PMI Flash June (01:30 pm)
- US Markit Manufacturing PMI Flash June (07:15 pm)
- US New Home Sales MoM May (07:30 pm)
MACROS
Health insurance cost rises 40%
Rising Covid claims are pushing up the cost of group health insurance for employers by 25-40% in the wake of the second wave of the pandemic. This, even as new demand for employee health cover is coming from smaller employers like SMEs and MNCs with less than 50 employees. Small business owners are realising that the Employees’ State Insurance Corporation (ESIC) programme under which they are covered is inadequate and are opting for commercial group cover.
NCLT green-flags Kalrock to fly Jet
NCLT on Tuesday approved a plan to revive the defunct Jet Airways submitted by UK’s Kalrock Capital and the UAE-based entrepreneur Murari Lal Jalan. The bankrupt airline has been grounded since April 2019. The NCLT made it clear that the airline would not have any historic rights over time slots in airports and that the issue will be handled by the government or the appropriate authority.
Powell says no immediate rate hike
Fed Chair Jerome Powell on Tuesday reaffirmed the US central bank’s intent to encourage a “broad and inclusive” recovery of the job market, and not to raise interest rates too quickly based only on the fear of coming inflation. “We will not raise interest rates pre-emptively because we fear the possible onset of inflation. We will wait for evidence of actual inflation or other imbalances,” he said in a hearing before a US House of Representatives panel.
Indian yields begin to rise
India’s central bank may have held down yields on the benchmark bond near 6% by walking the talk on its announced policy stance of protracted accommodation, but investors are pricing in an overall 30-basis-point increase in yields as the rates of other securities begin to head north. A basis point is 0.01%. The benchmark paper slipped on the traded volume rankings for sovereign securities in the past two days, reflecting drying liquidity in a set of bonds supposed to be in maximum demand
ICICI Bank gains from HDFC ban
With a prolonged business embargo on HDFC Bank, ICICI Bank is ramping up its digital infrastructure to gain market share in the cards business. RBI data for April showed that HDFC Bank lost nearly 160 basis points of market share since the end of November 2020, when the embargo came in. During the same period, ICICI Bank, SBI Cards and Axis Bank have gained 108 basis points, 37 basis points and 11 basis points, respectively, in market share, data compiled by brokerage house Macquarie showed.
HUL counts on a resilient Bharat
HUL CMD Sanjiv Mehta expects market growth to be resilient in rural areas even as Covid spreads to there. Addressing shareholders at the company’s 88th AGM held virtually on Tuesday, Mehta said it would take a few more weeks to assess the impact in rural areas. However, with factors such as the IMD predicting a normal monsoon and an increase in MSP on certain key crops, Mehta said the company is confident rural would remain resilient.
