STATE OF THE MARKETS
SGX Nifty signals a negative start
Nifty futures on Singapore Exchange traded 101 points, or 0.64 per cent, lower at 15,753, signaling that Dalal Street was headed for a negative start on Monday.
- Tech View: Nifty50 on Friday formed a Doji Cross candle on the daily chart, signaling indecisiveness among traders
- India VIX: The fear gauge eased over a per cent to 11.76 level on Friday over its close at 11.88 level on Thursday.
Asian stocks traded mixed
Asian shares markets were trading mixed on Monday despite a rally on Wall Street as super-strong US corporate earnings sucked funds out of emerging markets and fears over the spread of the coronavirus Delta strain spooked the traders. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.87 per cent.
- Japan’s Nikkei jumped 1.44%
- Korea’s Kospi shed 0.28%
- Australia’s ASX 200 gained 0.18%
- China’s Shanghai Composite tanked 1.06%
- Hong Kong’s Hang Seng plunged 1.82%
US stocks ended mildly higher
Wall Street gained ground for the fourth straight session on Friday, extending a rally that pushed all three major US stock indexes to record closing highs as upbeat earnings and signs of economic revival fueled investor risk appetite.
- Dow Jones gained 0.68% to 35,061.55
- S&P 500 jumped 1.01% to 4,411.79
- Nasdaq rose 1.04% to 14,836.99
Dollar nears multi-month highs
The dollar hovered near its strongest level since early April against the euro on Monday, as financial markets looked ahead to the Federal Open Market Committee (FOMC) meeting this week for clues on the timing of stimulus tapering.
- Dollar index jumped to 92.920
- Euro declined to $1.17655
- Pound slipped to $1.3745
- Yen jumped to 110.56 per dollar
- Yuan at 6.4788 against the greenback
FPIs sell shares worth Rs 163 crore
Net-net, foreign portfolio investors (FPIs) turned sellers of domestic stocks to the tune of Rs 163.31 crore, data available with NSE suggested. DIIs, turned buyers to the tune of 2187.8 crore, data suggests. Foreign portfolio investors (FPIs) have offloaded Indian equities to the tune of over Rs 5,689 crore in July so far.
Q1 results today
Four Nifty50 firms Kotak Mahindra Bank, Larsen & Toubro, Axis Bank and Tata Motors will announce their June quarter results today. SBI Life Insurance, Vedanta, DLF, GlaxoSmithKline Pharmaceuticals, Coromandel International, Navin Fluorin, M&M Financial Services and Alembic Pharmaceuticals would be some other companies that will announce quarterly earnings today.
MONEY MARKETS
Rupee: The rupee pared its early losses to close 6 paise higher at 74.40 against the US dollar on Friday, rising for the third session in a row on the back of weak crude oil prices and gains in the domestic equities.
10-year bonds: India 10-year bond yield jumped 0.44 per cent to 6.16 after trading in 6.14 – 6.17 range.
Call rates: The overnight call money rate weighted average stood at 3.21 per cent, according to RBI data. It moved in a range of 1.90-3.40 per cent.
DATA/EVENTS TO WATCH
- Q1 Earnings: Axis Bank | DLF | Kotak Bank | L&T | Tata Motors | Vedanta
- US New Home Sales MoM June (07:30 pm)
- US Dallas Fed Manufacturing Index July (08:00 pm)
- US 3-Month Bill Auction (09:00 pm)
MACRO
Good show for India Inc in Q1
India Inc has notched up strong double-digit growth in both aggregate revenue and net profit in the June quarter, shows a sample of companies surveyed, riding a healthy recovery magnified by the low base of the Covid-hit year-earlier period. The early first-quarter trend shows sustained growth on a low base. Net sales of a sample of 240 companies analysed by ET rose 34.1% year-on-year in the June quarter while net profit rose 67.8%. However, the sample’s profitability, as measured by operating margins, took a 290 basis point knock in the quarter due to higher raw material costs and increased wages from the year-ago levels
India Inc seeing sharpest rise in rating upgrades
Rating companies reported their sharpest rise in upgrades compared to downgrades in June quarter since the beginning of the pandemic early last year as local companies regain business normalcy, demonstrating better creditworthiness amid a slew of relief measures. The credit ratio, a gauge for the financial health of companies, shot up to 2.08 in June quarter from 1.77 January-March quarter with credit agencies upgrading 771 companies over 370 downgrades, according to Prime Acuité Credit Rating Migrations Database that compiled data from seven local credit rating companies including Acuite, Brickwork, CARE, Crisil,
, India Ratings and Infomerics.
Large realty debt under stress
Nearly Rs 1.35 lakh crore of real estate debt is under severe stress, with extremely poor visibility of loan servicing, reveals a study conducted by Anarock Capital. However, despite the pandemic, two-thirds of about Rs 5.02 lakh crore of total loan advances to real estate companies by banks, NBFCs and home financiers are stress-free. Financial institutions have lent nearly Rs 7.5 lakh crore ($100 billion) to developers. The report also highlights that another 15% (approximately $15 billion) is under some pressure but has scope for resolution with certainty on at least the principal amount.
Chief calls for lifting urban poor
Hindustan Unilever Ltd (HUL) chairman Sanjiv Mehta said the government will have to reach out to the urban poor, especially in the informal sector, to spur growth. Also, the pace of Covid-19 jabs should be nearly doubled as rapid inoculation offers the best return on investment for the government and corporations, he told ET in an interview. The head of India’s biggest consumer goods company said there had been minimal disruption so far due to localised closures during the second wave but a pickup in discretionary categories will point to complete demand recovery.
Govt set to amend insurance laws
The government is ready with a proposal to amend insurance laws to privatise one of the three unlisted general insurance companies. The draft Bill, which has been sent for approval by the Union Cabinet before introducing it in Parliament, seeks to remove the 51% floor on government holding, official sources told TOI. Foreign investors will be able to hold up to 74% in the divested general insurance firm subject to Indian management and control, government sources said, while ruling out any plan to sell
Assurance or GIC.
IBC helped banks recover Rs 5.5L cr
The steps taken by the government over the last few years — from enacting Insolvency & Bankruptcy Code (IBC) and strengthening other laws to administrative measures — have helped banks recover around Rs 5.5 lakh crore of bad debt, including close to Rs 1 lakh crore from accounts that had been technically written off, top officials said.
