· Earnings downgrades begin for India Inc; Nifty FY22 EPS estimate cut by 1.7%
· RBI caps founder CEO tenure at banks at 12 years
· Vaccine-linked pharma stocks on a high
· Bitcoin rallies 12% in a day on JPMorgan’s crypto fund plan
Hi there. Welcome to ETMarkets Morning, the show about money, business and markets. I am Sandeep Singh.
Let’s start with a quick glance on the state of the markets.
Dalal Street looked set for a positive opening this morning, with SGX Nifty futures marginally higher a day after Monday’s big rally. But other Asian markets are off to a weak start. Overnight on Wall Street, S&P 500 and Nasdaq hit record highs. The US 10-year Treasury yield held well below last month’s peaks. The dollar gained slightly. Oil steadied as traders considered the risks to demand from India after the nation reported a million new coronavirus cases in three days. In international markets, gold slipped 0. 2% to $1,777.84 an ounce. All eyes will be on Q4 earnings from Maruti Suzuki, Axis Bank, Bajaj Finance and Britannia today.
That said, here’s what else is making news.
Earnings downgrades have started for India Inc. Analysts have begun cutting earnings estimates for select companies amid localised lockdowns and curfews due to the second wave of Covid that’s led to a demand slowdown. More than 80 companies in the NSE500 universe have seen a downgrade in EPS estimates in the last four weeks. Nifty consensus earnings have also been cut by 1.7% for FY22 and 1.1% FY23, due to the downgrades in auto, banking and pharma stocks.
RBI on Monday said a bank founder can remain CEO for 12 years, which can go up to 15 based on the discretion of the central bank. It also said CEOs who have already completed the prescribed term on the date of these instructions coming into effect can complete their current term as already approved by RBI. Currently, the longest-serving chief executive of a commercial bank is Uday Kotak of Kotak Mahindra Bank, who has been holding that role since the bank received its licence in 2003.
Pharma companies involved in the production of Covid vaccines have witnessed a sharp spurt in their stocks. The gains came after the announcement of the country’s third phase of vaccinations that opened up vaccine supplies for the private market. Being allowed to supply to private channels could potentially provide a “significant upside” to companies, including Zydus Cadila, Dr Reddy’s, Aurobindo, Strides, Pfizer and Shilpa Medicare in the near term, analysts say.
RBI says the resurgence in Covid infections, if not contained in time, risks protracted restrictions and disruptions in supply chains and consequent inflationary pressures. RBI’s warning came at a time when prospects of regional lockdowns have increased with rising cases of the disease. The central bank in its ‘State of the Economy’ report said it was important to entrench India’s inflation at 4% so that it can continue to play its stabilising role.
And lastly, Bitcoin rallied on Monday as investors took advantage of the lowest levels in seven weeks to pile back in. The largest cryptocurrency rose as much as 12% to climb above the $53,000 mark, its biggest intraday gain since early February. The move comes amid reports that JPMorgan Chase was preparing to introduce an actively-managed Bitcoin fund for some clients as soon as this summer. The rebound reversed a two-week slump that had pushed Bitcoin below its 100-day moving average.
NOW Before I go, here is a look at some of the stocks buzzing this morning.
The institutional portion of Federal-Mogul Goetze India’s offer for sale was subscribed 3.95 times on Monday. Promoter IEH FMGI Holdings is selling 55.4 lakh shares of the company representing a 9.95% stake with a green shoe option of another 9.95% shares.
RIL and its partner BP on Monday announced the start of gas production from the second set of new discoveries in the eastern offshore KG-D6 block.
Procter & Gamble has announced that the company will contribute towards the vaccination of over 5 lakh citizens by pledging Rs 50 crore in partnership with government and local authorities in India.
Shares of Coffee Day Enterprises, which runs the Café Coffee Day chain, resumed trading Monday after Sebi gave a green signal for relisting.
US private equity giant Blackstone, along with the UAE’s Abu Dhabi Investment Authority (ADIA) and UC Investments, will buy a controlling stake in Bengaluru-based IT services firm Mphasis for $2.8 billion.
HDFC Life’s profit marginally climbed to Rs 318 crore in the March quarter, with provisions on Covid cases nearly offsetting the impact of growth in new premiums and denting the bottom line.
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 put with us for all the market news through the day. Happy investing!
