STATE OF THE MARKETS
SGX Nifty signals a positive start
Nifty futures on Singapore Exchange traded 36 points, or 0.22 per cent, higher at 16,313, signaling that Dalal Street was headed for a positive start on Wednesday.
- Tech View: Nifty50 on Tuesday formed a Doji candle on the daily chart, suggesting indecisiveness among the market participants.
- India VIX: The fear gauge rose marginally to 12.71 level on Tuesday over its close at 12.61 on Monday.
Asian stocks gain in early trade
Asian shares opened mostly higher on Wednesday, tracking a record high closing for US stocks in overnight trade. MSCI’s broadest index of Asia-Pacific shares outside Japan was up by 0.01 per cent.
- Japan’s Nikkei gained 0.64%
- Korea’s Kospi declined 0.23%
- Australia’s ASX 200 added 0.50%
- China’s Shanghai rose 0.30%
- Hong Kong’s Hang Seng advanced 0.12%
US indices settle mostly higher
Big tech took a tumble on Tuesday as economically sensitive stocks powered the Dow Industrials and the benchmark S&P500 index to fresh record highs in anticipation of Wednesday’s release of key inflation data that could usher in tighter US monetary policy.
- Dow Jones rose 0.46% to 35,264.67
- S&P 500 advanced 0.09% to 4,436.75
- Nasdaq fell 0.49% to 14,788.09
Dollar rises on Fed taper talks
The dollar hovered near a four-month high against the euro and scaled a five-week peak on the Japanese yen on Wednesday, as traders awaited US inflation data and wagered a high reading could pressure the Federal Reserve to wind back policy support.
- Dollar index rose to 93.07
- Euro slipped to $1.1720
- Pound fell to $1.3827
- Yen declined to 110.65 per dollar
- Yuan lowered to 6.4902 against the greenback
DIIs buy shares worth Rs 689 crore
Net-net, foreign portfolio investors (FPIs) turned sellers of domestic stocks to the tune of Rs 178.51 crore, data available with NSE suggested. DIIs were buyers to the tune of Rs 689 crore, data suggests.
Q1 earnings today
Pidilite Industries, Cadila Healthcare, Cummins India, The New India Assurance Company, Endurance Technologies, Bata India and CESC are among the companies that will announce quarterly earnings today.
MONEY MARKETS
Rupee: Extending losses for the second straight session, the rupee on Tuesday fell by 17 paise to end at 74.43 against the US currency due to a stronger dollar in the overseas markets.
10-year bond: India 10-year bond yield rose 0.19 per cent to 6.23 after trading in 6.22- 6.23 range.
Call rates: The overnight call money rate weighted average stood at 3.18 per cent, according to RBI data. It moved in a range of 1.90-3.40 per cent.
Data/Events to Watch
- Q1 Earnings: Pidilite | Cadila Healthcare | Cummins | Bata
- US Inflation Rate JUL (6 pm)
- US Fed Bostic Speech (8 pm)
- US NY Fed Treasury Purchases 22.5 to 30 yrs (8 pm)
- US Fed George Speech (9:30 pm)
- US 10-Year Note Auction (10:30 pm)
MACROS
RBI to cut red tape to let cos raise funds overseas
The central bank’s draft guidelines easing FEMA regulations will give Indian companies — and their promoters — more flexibility to raise funds abroad, reduce the cost of capital and make overseas acquisitions easier, bankers said Tuesday. The draft norms have for the first time allowed promoters to give their personal guarantees for raising funds from abroad without seeking the central bank’s permission.
Cairn executives to meet FinMin soon
Senior Cairn Energy executives are expected to meet finance ministry officials this week to discuss their tax dispute, days after Parliament approved scrapping of the retrospective clause in the 2012 tax amendment. The UK-based company, which won $1.2 billion in an arbitration award against India, is looking to settle the dispute and could meet the officials possibly as early as Wednesday, said people with knowledge of the matter.
Chip crunch hits auto production
The impact of the second wave of the pandemic on the automobile industry may have disappeared, but that of the semiconductor shortage lingers. Maruti Suzuki may have to reduce its production plans for this year by 5% if the shortage continues, people in the know said. That would be an output loss of 70,000-80,000 units, or more than Rs 4,600 crore, at the market leader. A 5% impact on Maruti Suzuki’s volumes would mean a 2.5% hit on production in India’s passenger vehicle segment, since the company makes half the cars and SUVs sold in the country.
Arbitrage funds get mojo back on HNI rush
This year, arbitrage funds are as much in favour as the fancied consumer-tech IPOs, with the spotlight firmly back on an investment category that had its fair share of sceptics through a roller-coaster 2020. From cumulative exits in the immediate aftermath of Covid, arbitrage funds now dominate the monthly mutual-fund leader-board, with subscriptions increasing steadily through January. In July, arbitrage funds saw inflows of ₹14,924 crore. This is the highest monthly tally for arbitrage funds in the past two and a half years – and about two-thirds of inflows into equity schemes in July.
Buying foreign stocks to get easier for Indians
Investing in foreign securities is set to become cheaper and more secure for Indians. The National Stock Exchange (NSE) and BSE are creating special platforms at the International Financial Services Centre (IFSC) in GIFT City through which Indians can invest in foreign shares. “The product enables resident individuals to easily and cost effectively invest in US stocks under the LRS (Liberal Remittance Scheme) framework of RBI,” said NSE chief executive officer Vikram Limaye.
Banks’ asset quality risks rise
Asset quality risks of Indian banks are set to increase because the second wave of Covid-19 has crippled economic activity, but the country will return to growth this fiscal, Moody’s Investor Services said on Tuesday. “For India (Baa3 negative), Moody’s projects the economy will return to growth in the fiscal year ending March 2022,” the global rating company said in a note. “But the severe secon
