STATE OF THE MARKETS
SGX Nifty signals a negative start
Nifty futures on Singapore Exchange traded 39 points, or 0.25 per cent, lower at 15,849.50, signaling that Dalal Street was headed for a negative start on Thursday.
- Tech View: Nifty50 formed a small bullish candle with a long wick on Wednesday, suggesting that intraday selling got bought into.
- India VIX: The fear gauge eased half a per cent to 12.21 level on Wednesday over its close at 12.28 on Tuesday.
Asian markets open lower
Asian share market opened lower Thursday with investors wary of possible gloom ahead as Japan’s government debates imposing further anti-infection measures, although strong Wall Street shares provided some support. MSCI’s broadest index of Asia-Pacific shares outside Japan was down by 0.17 per cent.
- Japan’s Nikkei declined 0.36%
- Korea’s Kospi retreated 0.12%
- Australia’s ASX 200 rose 0.62%
- China’s Shanghai Composite fell 0.02%
- Hong Kong’s Hang Seng shed 0.18%
S&P 500, Nasdaq post record closing
US stocks ended higher on Wednesday and the S&P 500 and Nasdaq notched record closing highs after minutes from the last Federal Reserve meeting indicated officials may not be ready yet to move on tightening policy.
- Dow Jones gained 0.30% to 34,681.79
- S&P 500 rose 0.34% to 4,358.13
- Nasdaq inched up 0.01% to 14,665.06
Dollar nears three-month high
The dollar traded near its highest in three months versus major peers on Thursday after minutes of the Federal Reserve’s June policy meeting confirmed the world’s biggest central bank is moving toward tapering its asset purchases as soon as this year.
- Dollar index gained to 92.702
- Euro slipped to $1.1792
- Pound dropped to $1.3787
- Yen rose to 110.555 per dollar
- Yuan appreciates to 6.4730 against the greenback
Crude prices fall or third day
Oil prices fell for a third day on Thursday amid anxiety that supply may rise after the collapse this week of talks among major producers, potentially causing the current output agreement to be abandoned.
Brent crude oil futures were down 43 cents, or 0.6 per cent, at $73 a barrel. US West Texas Intermediate futures were down 51 cents, or 0.7 per cent, at $71.69 a barrel.
FPIs buy shares worth Rs 543 cr
Net-net, foreign portfolio investors (FPIs) turned buyers of domestic stocks to the tune of Rs 532.94 crore, data available with NSE suggested. DIIs, turned sellers to the tune of Rs 231.8 crore, data suggests.
June quarter earnings
Tata Consultancy Services, Gammon Infrastructure Projects, and Shyam Metalics and Energy will release their June quarter earnings today.
MONEY MARKETS
Rupee: The rupee weakened by 7 paise to end at 74.62 against the US currency on Wednesday as a stronger dollar and rising crude oil prices weighed on the investor sentiment.
10-year bond: India 10-year bond yield eased 0.18 per cent to 6.16 after trading in 6.16 – 6.19 range.
Call rates: The overnight call money rate weighted average stood at 3.11 per cent, according to RBI data. It moved in a range of 1.90-3.40 per cent.
DATA/EVENTS TO WATCH
- Q1 Earnings: TCS
- Japan Bank Lending YoY June (05:20 am)
- Japan Eco Watchers Survey Outlook June (10:30 am)
- ECB Monetary Policy Meeting Accounts (06:00 pm)
- US Initial Jobless Claims 03/July (06:00 pm)
- US Jobless Claims 4-week Average July/03 (06:00 pm)
- US Continuing Jobless Claims 26/June (06:00 pm)
- US EIA Crude Oil Stocks Change 02/July (08:30 pm)
MACROS
Fitch cuts India growth forecast
Global ratings firm Fitch on Wednesday cut its forecast on India’s growth to 10% for the ongoing fiscal year from the 12.8% expansion projected in March, as lockdowns amid the second wave of the pandemic have hurt banking sector prospects. The renewed restrictions had slowed loan recovery and left banks with a moderately worse outlook for business and revenue generation in fiscal 2022, the ratings frim said in a report.
US Fed still iffy about tapering
The Fed minutes indicated officials weren’t ready to communicate a schedule for scaling back their bond-buying program, due to high uncertainty over the course of the recovery. They did, however, want to establish a plan in case a move is needed sooner. “The Committee’s standard of ‘substantial further progress’ was generally seen as not having yet been met, though participants expected progress to continue,” according to the minutes from the June 15-16 FOMC meeting.
Top banks on fund-raising spree
Five top lenders in the country, including HDFC Bank, Axis Bank and State Bank of India, are seeking to collectively raise up to $2 billion overseas in the next few months through Additional Tier I (AT1) bonds, bolstering their capital bases ahead of an anticipated increase in credit demand. Mutual funds, once major buyers of such AT1 bonds, are lukewarm about this quasiequity asset class after the banking regulator last year ordered that these instruments be written off in Yes Bank’s state-sponsored bailout.
11m bussinesses availed credit guarantee
More than 11 million businesses and individuals have availed nearly Rs 2.75 lakh crore under the government’s credit guarantee scheme to provide working capital and emergency funds to help overcome the economic stress caused by the pandemic. Banks have so far disbursed Rs 2.13 lakh crore under the Rs 4.5 lakh-crore Emergency Credit Line Guarantee Scheme (ECLGS) wherein the government guarantees repayments, latest available data shows.
Cabinet expansion biggest in many years
The much-awaited Cabinet expansion turned out to be a bigger recast than expected. Prime Minister Narendra Modi on Wednesday effected sweeping changes to his government, ushering in a new set of leaders in key roles with 36 fresh faces taking oath, seven others being elevated, and as many as seven Cabinet and five junior ministers getting dropped. Home minister Amit Shah has been given charge of the newly created cooperation ministry. In its scope and political messaging, the reshuffle was arguably the biggest such exercise in several years.
DPE shifted under FinMin
Coinciding with the Cabinet reshuffle, the department of public enterprises (DPE) has now been made part of the finance ministry in what is seen as a move to speed up the privatisation process and exercise greater financial control over state-run enterprises. For years, DPE was part of the ministry of heavy industries, with a separate department carved out for public enterprises. During the Atal Bihari Vajpayee and Narendra Modi regimes, the two departments had a common minister, usually a BJP ally.
No quarantine if 2 doses of Covid vax taken
People who have received both doses of a vaccine against Covid-19 can avoid quarantine and Covid-19 testing during inter-state travel, the National Expert Group on Vaccine Administration for Covid-19 (NEGVAC) and the National Technical Advisory Group on Immunisation in India (NTAGI) recommended during a recent meeting with the health ministry. Dr NK Arora, chairman of the Centre’s Covid-19 Working Group, who was part of that meeting, told TOI on Wednesday that the recommendations also extend to those travelling out of the country.
