STATE OF THE MARKETS
SGX Nifty signals a positive start
Nifty futures on the Singapore Exchange traded 54.5 points, or 0.35 per cent, higher at 15,782.50, signaling that Dalal Street was headed for a positive start on Monday.
- Tech View: Nifty formed a small bearish candle, with a long wick, on Friday reflecting intraday buying. Analysts said the upside looks capped for now.
- India VIX: The fear gauge eased 6 per cent to 12.94 level on Friday over its close at 13.56 on Thursday, signaling waning nervousness.
Most Asian markets show strength
Asian share markets opened higher on Monday as investors took heart from rebound rallies on Wall Street, shrugging off concerns over the Delta variant of Covid-19. MSCI’s broadest index of Asia-Pacific shares outside Japan was up by 0.69 per cent.
- Japan’s Nikkei rose 2.03%
- Korea’s Kospi surged 0.79%
- Australia’s ASX 200 jumped 0.73%
- China’s Shanghai Composite added 0.31%
- Hong Kong’s Hang Seng gained 0.40 %
US indices ended at record highs
The three major US stock indexes rallied to record closing highs on Friday. Bond yields rebounded solidly and stock indices notched new highs Friday as Wall Street closed out a choppy, holiday-shortened week of trading with the market’s third straight weekly gain.
- Dow Jones gained 1.30% to 34,870.16
- S&P 500 climbed 1.13% to 4,369.55
- Nasdaq gained 0.98% to 14,701.92
Pressure on risk currencies subsided
Risk currencies hovered above their recent lows against the dollar and the yen on Monday, as fears about slowdown in the global economic recovery appeared to have subsided for now.
- Dollar index steady at 92.153
- Euro gained to $1.1873
- Pound ticked up to $1.3900
- Yen rose to 110.17 per dollar
- Yuan flat at 6.4785 against the dollar
Crude prices little changed
Oil prices were little changed in early Asian trade on Monday as an impasse in talks among key producers to raise output in coming months kept supplies tight, offsetting concerns about coronavirus’ impact on the global economy. Brent crude for September fell 4 cents to $75.51 a barrel by 0032 GMT while US West Texas Intermediate crude for August was at $74.57 a barrel, up 1 cent.
FPIs sell shares worth Rs 1,125 cr
Net-net, foreign portfolio investors (FPIs) turned sellers of domestic stocks to the tune of Rs 1,124.65 crore, data available with NSE suggested. DIIs, turned buyers to the tune of Rs 106.55 crore, data suggests. FPIs pulled out Rs 2,249 crore from the Indian equities segment in the first seven trading sessions of July.
Q1 earnings
HFCL, HMT, Steel Strips Wheels, Authum Investment & Infrastructure and Indbank Merchant Banking Services are among the companies that will announce quarterly earnings today.
MONEY MARKETS
Rupee: The rupee gained 7 paise to end at 74.64 against the US currency on Friday, tracking weakness in the American currency in the overseas market.
10-year bonds: India 10-year bond yield jumped 1.01 per cent to 6.19 after trading in 6.14 – 6.2 range.
Call rates: The overnight call money rate weighted average stood at 3.17 per cent, according to RBI data. It moved in a range of 1.90-3.40 per cent.
DATA/EVENTS TO WATCH
- India Industrial Production YoY May (05:30 pm)
- India Inflation Rate YoY June (05:30 pm)
- India Manufacturing Production YoY May (05:30 pm)
- Japan Machine Tool Orders YoY June (11:30 am)
- US Consumer Inflation Expectations June (08:30 pm)
- Euro Area Eurogroup Meeting
MACROS
Govt to revive wage rate index
The government will soon revive the wage rate index and change its base year to 2019 from 1965. The revised index will capture the impact of inflation on wages and form the basis for determining the statutory national floor level minimum wage, said officials. “Work is in the final stages. The index with revised base year could be launched next month,” said a senior labour ministry official, who did not wish to be identified.
Tatas may seek indemnity in AI deal
The Tata Group may ask for an indemnity clause in the Air India privatisation deal in order to protect itself from unexpected claims even as it intensifies due diligence on the government-owned airline. Tata Group officials said requesting an indemnity clause to be inserted in the final transaction contract is expected given the possible risks arising from recent claims filed by Devas Multimedia and Cairn Energy, seeking to seize Air India’s overseas assets.
Indian IT up for 5-year mega growth
India’s $150 billion IT services sector is expected to witness a “five-year mega growth” cycle due to the speed at which American enterprises transform themselves digitally, outsourcing experts told ET, following US President Joe Biden’s executive order last week to increase competition in the US economy. US businesses will show increased appetite to migrate to the Cloud and adopt technologies such as artificial intelligence (AI) and Internet of things (IoT) in the next few years, leading to increased offshore and onshore outsourcing opportunities for IT services providers.
Hiring sentiment picked up in June
Phased unlocking and resumption of commercial activities boosted hiring sentiment in June as new job requirements rose 15-20% on an average month-on-month after a lull in May. Additionally, it almost doubled compared to June 2020, as war for talent in the tech sector and hectic ramp-up of teams in healthcare & pharmaceuticals accelerated the growth rate. However contact services — including travel & hospitality, and conventional retail — are still recovering, with an expectation of return of buoyancy for the rest of the year, if the pace of vaccination continues and the pandemic is contained.
Insurers says 74% FDI not enough
The government last week notified amendments to regulations for the insurance sector that enabled an increase in foreign investments — up to 74% from 49% earlier. The revised norms dilute the earlier restrictions that discouraged foreign investors when the foreign limit was hiked to 49% from 26% in 2015. But insurers say that the game has now changed, and the deep-pocketed investors are not MNC companies but FIIs and private equity (PE) investors, who face separate hurdles.
SIP accounts hit record high
As digital services and mutual fund plans boomed in tandem, SIP account registrations climbed — to a record high of 2.129 million in June. Data from the Association of Mutual Funds in India (AMFI) showed the previous peak was 1.671 million accounts in March. The pace of new SIP additions in June is nearly double of the last two years’ average of 1.121 million accounts, underscoring democratisation of the equity culture in India.
