STATE OF THE MARKETS
SGX Nifty signals a tepid start
Nifty futures on Singapore Exchange traded merely 6.5 points, or 0.04 per cent, lower at 15,703, signaling that Dalal Street was headed for a muted start on Friday.
- Tech View: Nifty50 on Thursday faced selling from the word go. Bulls’ failure to take the index above the 15,900 level triggered weakness.
- India VIX: The fear gauge soared over 11 per cent to 13.56 level on Thursday over its close at 12.21 on Wednesday.
Asian markets fall in early trade
Asian share markets opened mostly lower on Friday, tracking an overnight fall in US stocks amid fears that rising Covid cases globally may hurt global growth. MSCI’s broadest index of Asia-Pacific shares outside Japan was down by 0.77 per cent.
- Japan’s Nikkei tanked 1.87%
- Korea’s Kospi declined 1.51%
- Australia’s ASX 200 shed 1.2%
- China’s Shanghai Composite fell 0.36%
- Hong Kong’s Hang Seng gained 0.31 %
US stocks settled lower
Wall Street lost ground on Thursday, with the S&P500 index and the Nasdaq pulling back from record closing highs in a broad sell-off driven by uncertainties surrounding the pace of the US economic recovery. As the bond market rallied on a flight to safety, all three major US stock indexes tumbled.
- Dow Jones shed 0.75% to 34,421.93
- S&P 500 tanked 0.86% to 4,320.82
- Nasdaq fell 0.72% to 14.559.78
Dollar Index falls in early trade
US Treasury yield dipped to a nearly five-month low of 1.25 per cent overnight, from as high as 1.5440 per cent just two weeks ago, weighing on the US dollar. That put pressure on the dollar index that left licking its wounds after a 0.36 per cent slide on Thursday to stand at 92.372. On Wednesday, it had pushed to a three-month high of 92.8440.
- Dollar index slid to 92.372
- Euro gained to $1.1846
- Pound jumped to 1.3779
- Yen rose to 109.865 per dollar
- Yuan depreciates to 6.4840 against the greenback
FPIs sell shares worth Rs 555 crore
Net-net, foreign portfolio investors (FPIs) turned sellers of domestic stocks to the tune of Rs 554.92 crore, data available with NSE suggested. DIIs, turned sellers to the tune of Rs 949.18 crore, data suggests.
MONEY MARKETS
Rupee: Falling for the third day in a row, the rupee weakened further by 9 paise to end at 74.71 against the US currency on Thursday as weaker domestic equities weighed on the forex market sentiment.
10-year bond: India 10-year bond yield shed 0.65 per cent to 6.12 after trading in 6.1 – 6.2 range.
Call rates: The overnight call money rate weighted average stood at 3.14 per cent, according to RBI data. It moved in a range of 1.90-3.40 per cent.
DATA/EVENTS TO WATCH
- Q1 Earnings: Delta Corp | Madhucon
- India Foreign Exchange Reserve (05:00 pm)
- China Inflation Rate YoY June (07:00 am)
- China PPI YoY June (07:00 am)
- UK Balance of Trade May (11:30 am)
- UK GDP 3-Month Average May (11:30 am)
- UK Industrial Production YoY May (11:30 am)
- UK Manufacturing Production YoY May (11:30 am)
- ECB President Lagarde Speech (03:30 pm)
- ECB Monetary Policy Meeting Accounts (06:30 pm)
MACROS
French court freezes Indian assets on Cairn plea
A French court has ordered a freeze on residential properties owned by the Indian government in central Paris, in what is seen as a setback for the Centre in its tax dispute with London-listed Cairn Energy. Tribunal judiciaire de Paris’s ruling based on Cairn Energy’s application will impact some 20 properties, valued at more than 20 million euros (Rs 177 crore), as part of a guarantee of the debt owed to the British company that exited India a few years ago. Some of the properties are in the 16th Arrondissement of Paris, which is one of the wealthiest areas in the city.
Govt okays Rs 23,123 cr Covid package
In its first Cabinet meeting after reshuffle, the Centre approved the Rs 23,123 crore package allocated for emergency response to Covid-19, with the focus on immediate needs for the next nine months of FY 21-22. This would include creation of more infrastructure for paediatric care, repurposing of hospital beds for Covid management, strengthening of genome sequencing, augmentation of ICU facilities, installation of oxygen tanks and creation of buffer stock of key medicines.
RBI warns banks on LIBOR deals
RBI on Thursday warned banks and financial institutions against structuring deals linked to the London Interbank Offered Rate (LIBOR) as the global rate gauge, a longstanding reference frame for cross border fund-raising, is nearing the end of its shelf life and will be replaced starting next year. “Banks and financial institutions are encouraged to cease entering into new financial contracts that reference LIBOR as a benchmark,” the central bank said Thursday.
LIC cleans up books for IPO
LIC is cleaning up its books ahead of its initial public offering (IPO) later this year. The corporation, which brought down its net non-performing assets to 0.05% as of March 2021 from 0.79% as of March 2020, is now selling its fully provided NPAs. As part of its IPO plans, the corporation plans to audit its half-yearly accounts for the period ended September 2021. Traditionally, the corporation has been publishing only full-year accounts. The government has notified that LIC Chairman will now be designated as chief executive In an attempt to fast-track to listing process.
Non-life insurers report 14% growth in Q1
India’s non-life insurers in the June quarter have reported a 14% growth in gross direct premium income, led largely by demand for health insurance covers during the deadly second wave of Covid-19, latest data released by sector regulator IRDAI on Thursday showed. These companies registered premium collections worth Rs 44,434.96 crore in the first quarter of 2021 as against Rs 39,054.82 crore in the year-ago period.
Auto sales showed a rebound in June
Automobile retail showed signs of recovery in June due to pent-up demand as states eased lockdown restrictions and showrooms slowly reopened, raising expectations of better sales in July. Retail sales of vehicles, as indicated by registration numbers, rose 23% over June 2020, albeit on a low base. Sales had been heavily impacted last year due to disruptions caused by Covid-19. Compared with June 2019, registrations last month were down by 28%.
Banks may report slow recovery in Q1
Indian banks could report a slowdown in the recovery momentum seen in the March quarter, with asset quality outlook dimming again after a brief bright interlude and system-level growth moderating to 5.8%, analysts said. Many banks indicated a drop in collection efficiency, leading to possibly even more slippages in the first half of FY22. But even here, there would be winners and relative stragglers.
