STATE OF THE MARKETS
SGX Nifty signals a positive start
Nifty futures on the Singapore Exchange traded 39.5 points, or 0.23 per cent, higher at 17,430.50, signaling that Dalal Street was headed for a positive start on Wednesday.
- Tech View: Nifty50 on Tuesday formed a small bearish candle on the daily chart, as analysts believe the bulls lack conviction at highs. They expect the index to trade in the 17,250-450 range.
- India VIX: The fear gauge eased over 3 per cent to 13.58 level on Tuesday over its close at 14.02 on Monday.
Asian stocks drop in early trade
Asian markets opened lower on Wednesday as investors sought to lock in profits after recent rallies, with falls on Wall Street also weighing on the market. MSCI’s broadest index of Asia-Pacific shares outside Japan was down by 0.69 per cent.
- Japan’s Nikkei tanked 0.88%
- Korea’s Kospi slipped 0.13%
- Australia’s ASX 200 shed 0.43%
- China’s Shanghai declined 0.48%
- Hong Kong’s Hang Seng fell 1.24%
US stocks settled lower
Wall Street lost ground on Tuesday as economic uncertainties and the increasing likelihood of a corporate tax rate hike dampened investor sentiment and prompted a broad sell-off despite signs of easing inflation.
- Dow Jones tanked 0.84% to 34,577.57
- S&P 500 declined 0.57% to 4,443.05
- Nasdaq retreated 0.45% to 15,037.76
Dollar drifts on soft inflation data
The dollar drifted within recent ranges against major peers on Wednesday after softer-than-expected US inflation raised doubts about a taper of Federal Reserve stimulus this year.
- Dollar index held steady to 92.632
- Euro almost flat at $1.1808
- Pound held stood at $1.3808
- Yen moved up to 109.595 per dollar
- Yuan appreciated to 6.4413 against the greenback
Oil climbs on strong demand outlook
Oil prices climbed on Wednesday after industry data showed a larger than expected drawdown in crude oil stocks in the United States, the world’s largest oil consumer, and on expectations that demand will recover as vaccine roll-outs widen. Brent crude oil rose 39 cents, or 0.5 per cent, to $73.99 a barrel while US WTI crude climbed 44 cents, or 0.5 per cent, to $70.90 a barrel.
FPIs buy shares worth Rs 1,650 crore
Net-net, foreign portfolio investors (FPIs) turned buyers of domestic stocks to the tune of Rs 1649.6 crore, data available with NSE suggested. DIIs were net sellers to the tune of Rs 310.31 crore, data suggests.
MONEY MARKETS
Rupee: The rupee pared its early gains to close flat at 73.68 against the US currency on Tuesday due to inflationary concerns and a muted trend in domestic equities.
10-year bond: India 10-year bond increased marginally 0.10 per cent to 6.19 after trading in 6.18 – 6.20 range.
Call rates: The overnight call money rate weighted average stood at 3.15 per cent on Tuesday, according to RBI data. It moved in a range of 1.95-3.40 per cent.
DATA/EVENTS TO WATCH
- AU Westpac Consumer Confidence Index SEP (6 am)
- CN Industrial Production YoY AUG (7:30 am)
- CN Retail Sales YoY AUG (7:30 am)
- GB Inflation Rate AUG (11:30 am)
- GB Retail Price Index AUG (11:30 am)
- EA Industrial Production JUL (2:30 pm)
- EA Labour Cost Index YoY Q2 (2:30 pm)
- US Export Prices AUG (6 pm)
- US Import Prices AUG (6 pm)
- US Industrial Production AUG (6:45 pm)
- EA ECB Schnabel Speech (6 pm)
- EA ECB Lane Speech (8:30 pm)
MACROS
Govt may pick up token stake in Voda Idea
The government is open to picking up a token stake in Vodafone Idea by converting a part of the dues the company owes as part of the Centre’s efforts to instil confidence in investors about the future of the loss-making telco, ET reported. The government may also keep the option of converting more of those dues into equity after four years, subject to conditions, the report said. The quantum of the token stake and whether it would be in the form of equity shares or any other instrument is yet to be decided.
AI sale plan may take off with 2 bids
At least two entities are expected to submit financial bids on Wednesday for Air India, marking an important milestone in the government’s plan to privatise the national carrier. The government had failed to attract suitors for a 76% stake in Air India in 2018 but it has sought to make the deal more attractive this time around in order to ensure that a sale takes place, they said. The government may have to absorb at least ₹20,000 crore more of debt — money borrowed by the airline in the past two years to fund losses.
Going gets tough for crypto exchanges
The country’s largest lender, State Bank of India (SBI), has blocked the receipt of funds by crypto bourses on its UPI platform. The bank has told payment processors to disable SBI UPI for crypto merchants, according to sources in the payment industry. With this, traders cannot buy Bitcoin or any cryptocurrency by transferring funds via UPI, as none of the processors which handle funds for exchanges will be unable to receive money sent for crypto purchases on their SBI accounts.
Food delivery apps may face GST
The Goods and Service Tax Council may deliberate on including food delivery apps such as Zomato and Swiggy within the ambit of restaurant services and make them liable to pay the tax. Cloud kitchens may also be included within the ambit and be charged a 5% GST, as per the recommendations that the council could take up at its meeting on Friday.
Chip shortage hits supplies of laptops, phones and TVs
Supplies of laptops, smartphones, large-screen televisions and premium appliances have further slowed down in the past two weeks, accentuating concerns that sales in the forthcoming festive season may be hit. The global shortage of semi-conductor chips, continuing congestion in Chinese ports due to Covid quarantine policies and shortage of containers have all contributed to the poor supply situation of finished electronic products and their components used for local manufacturing.
Auto sector may move to V-shaped recovery lane in 2-3 months
A strong, but uneven, pickup that the automotive market has been witnessing since the second wave of the pandemic could turn into a sharp V-shaped recovery as soon as in 60 days, according to top auto financiers.
