ED stand hits crypto·world at its core
FIIs turn gung ho on IT stocks·
Broking stocks on a high on surge in demat a/cs
HDFC Bank numbers depress bank earnings outlook
Now lemme give you a quick glance on the state of the markets.
Dalal Street looked headed for a major downturn this morning. Nifty futures on the Singapore Exchange traded some 166 points down at 7 hours (IST). Other Asian markets also fell in early trade amid concerns over elevated inflation.
Elsewhere, the rally in Treasuries continued, sending 10-year yields further down to 1.26%.The dollar traded steady as was the pound. Oil slipped after the OPEC+ grouping agreed to boost production into 2022, resolving an internal dispute that had shaken the alliance.
That said, here’s what is making news?
The Enforcement Directorate has taken a stand on cryptocurrencies that can unsettle crypto trading and all the bourses in India. The agency, in its recent notice to WazirX, has asked the country’s largest crypto exchange to explain why ‘withdrawal from crypto wallets’ is not a violation of the FEMA, a person familiar with the issue told ET. The ED notice puts a question mark on the very essence of cryptos and fundamental structure of the underlying digital ledger, blockchain, that allow holders of cryptos to freely transfer coins from their wallets to another wallet and to anyone, anywhere in the world.
Nifty could head towards the 16,000-level during this truncated week of trading after hitting record highs last week, said technical analysts. Analysts say 15,750 is the level where the index may find support. Nifty gained 1.5% last week and outperformed all regional peers barring China, Hong Kong and S Korea. SAIL, Jindal Steel, Lupin and Aurobindo Pharma could see another 8-10% upside in the near term, said analysts.
A less-than-impressive showing by HDFC Bank in the first quarter ended June – with both NPAs and restructured loans rising – has made analysts cautious about the performance of rest of the banking industry.“If things are so challenging for HDFC Bank, then we should watch out for other banks too, especially mid-sized ones,” said Siddharth Purohit, analyst at SMC Global Securities. The bank’s overall retail loan book shrank from Rs 5.27 lakh crore in end-March 2021 to Rs 5.23 lakh crore in end-June. Retail loans fell with a drop in credit card outstandings, auto loans, two-wheeler loans and loans against securities.
Shares of broking firms — the current flavour on Dalal Street — could retain their popularity among traders and investors for now despite their recent run-up as the retail frenzy remains unfettered. Money managers, however, warn against fresh aggressive investments in these stocks as expensive valuations have made them vulnerable to sharp market reversals. Record addition of demat accounts by individual investors has driven a rally in brokerage stocks this year. Angel Broking, which debuted at a 10% discount to its IPO price in October 2020, has jumped 280% so far in 2021. ICICI Securities, Motilal Oswal Financial Services, JM Financial, Geojit Financial, Emkay Global, and Aditya Birla Money have gained 30-80%.
LASTLY,
Institutional investors are raising wagers on IT counters, thanks to a strong deal pipeline and expectation of several companies beating revenue guidance in the first quarter of fiscal 2022. The sectoral weight of domestic funds rose to a multi-month high of 11.7% in June 2021, according to data compiled by Motilal Oswal Financial Services. Local funds raised allocation to IT stocks by 70 basis points in June on a month-on-month basis, the highest across sectors.
NOW Before I go, here is a look at some of the stocks buzzing this morning…
The government will likely wait till the completion of its stake sale in IDBI Bank and watch investor response before going ahead with the privatisation of other state-run lenders.
Mindtree is seeing a broad-based demand from clients, spanning across geographies, verticals and service lines, CEO Debashis Chatterjee said
IndiaMart Intermesh has approached the Bombay High Court alleging that Just Dial has filed false and fabricated documents in the court in an ongoing copyright infringement dispute
The Rs 1,600 crore initial public offering of Glenmark Life Sciences, a unit of Glenmark Pharmaceuticals, is likely to be launched later in July,
Adani Group has appointed Mumbai International Airport (MIAL) chief Rajeev Jain as the CEO of its airports business
Do also check out over two dozen stock recommendations for today’s trade from top analysts on ETMarkets.com.
That’s it for now. Stay with us for all the market news through the day. Happy investing
