NEW DELHI: SGX Nifty signalled weakness ahead on Dalal Street. Earnings of key private lenders, a fresh slump in crude oil prices and mixed cues from Asian markets will sway investor sentiment on Tuesday.
Here’s breaking down the pre-market actions.
TRADE SETUP
Singapore trading sets stage for flat start
Nifty futures on the Singapore Exchange traded 13.75 points or 0.15 per cent lower at 9,340, indicating a flat-to-negative start for Dalal Street.
Tech view: Nifty resistance at 9,350
Nifty50 climbed over 1 per cent on Monday but could not breach the stiff resistance in the 9,350-9,390 region on a closing basis. The index formed a Gravestone Doji on the daily chart, as the bears made a comeback and cut gains that the bulls had made in intraday trade.
Asian shares mixed in early trade
Asian stocks rose after a strong Wall Street session as easing lockdown restrictions by some countries and US states buoyed sentiment. Japan’s Nikkei 225 index edged 0.21 per cent lower to 19,742.22.Hong Kong’s Hang Seng added 0.50 per cent to 24,401.12. China’s Shanghai Composite gained 0.16 per cent to 2,819.99
Oil prices extend fall
Oil prices extended falls Tuesday a day after another massive rout, as concerns over storage capacity overshadow cuts by top producers. US WTI fell about six per cent to $11.97 a barrel in early Asian trade, after dropping about 25 percent Monday. Brent crude dropped nearly 1.5 per cent to trade at $19.65 a barrel.
US stocks ended higher
On Monday, the Dow Jones Industrial Average increased 358.51 points, or 1.51 per cent, to 24,133.78. The S&P 500 rose 41.74 points, or 1.47 per cent, to 2,878.48. The Nasdaq Composite Index was up 95.64 points, or 1.11 per cent, to 8,730.16.
DIIs buy Rs 1,142 cr worth of stocks
Net-net, foreign portfolio investors (FPIs) were sellers of domestic stocks to the tune of Rs 916 crore on Monday, data available with NSE suggested. DIIs were net buyers to the tune of Rs 1,142 crore, data suggests.
Axis Bank to declare Q4 results
The bank, which is scheduled to come out with its March quarter earnings on Tuesday, will likely report steady loan growth resulting in better net interest income (NII) growth than the industry average, but there may be a spike in slippages.
MONEY MARKETS
Rupee: The rupee rose by 21 paise to close at 76.25 against the US dollar on Monday, tracking positive domestic equities and weakening of the American currency in the overseas market.
10-year bonds: India 10-year bond yield fell 0.23 per cent to 6.15 after trading in 6.12-6.20 range.
Call rates: The overnight call money rate weighted average stood at 4.15 per cent, according to RBI data. It moved in a range of 2.30-4.55 per cent. (Not updated)
HAPPENING TODAY
>> Q4 Earnings: Axis Bank | Atul
>> Japan March Unemplyment Rate (05.00 am)
>> Russia March-end YoY GDP Growth (08.30 pm)
>> US CB Consumer Confidence April (07.30 pm)
MACROS
RBI buying govt debt?
RBI bought chunks of debt just after the government sold it, the latest data showed, further fueling talk that the central bank is supporting the nation’s fund-raising efforts. Traders have been speculating over the central bank’s role in bill auctions this month as a handful of bids lapped up sales and drove yields to the lowest in more than a decade. While RBI hasn’t taken part in any government auctions, the latest data suggest that it could be buying short-term debt in the secondary market within hours of a sale.
RIL plans first public fund raise in 29 years
RIL is planning a rights issue, its first public fund raise in 29 years. Its board will meet on April 30 to “consider a proposal to issue equity shares to existing shareholders on rights basis.” Through a stock exchange notice on Monday, RIL said its board would meet on April 30 to “consider a proposal to issue equity shares to existing shareholders on rights basis”. Earlier this month, the RIL board had approved a proposal to raise Rs 25,000 crore through NCDs
Graded exit from lockdown planned
Prime Minister Narendra Modi asked chief ministers on Monday to work towards progressively moving districts out of the Covid-19 lockdown, indicating that those currently in the red zones would continue in this mode beyond May 3. He, however, urged the CMs to “think of ways to energise the economy and reforms,” a top government official told ET, adding that the discussion on the economy was “extensive”. The PM sought to put the issue of exiting the lockdown in context at a video conference with CMs, where he emphasised that districts will have to gradually move through the colour code — red, orange and green.
Rs 50k liquidity window to aid MFs
The Reserve Bank of India (RBI) opened a Rs 50,000 crore flexible liquidity window to help mutual funds cope with redemption pressure, tempering investor anxiety. The move prevented a sharp spike in bond yields, but did not completely eliminate risk aversion. The move follows Franklin Templeton shutting schemes that invested in high-risk, high-yielding bonds after investor withdrawals surged. The central bank said it would offer the money to banks against government bonds and they would lend this exclusively to asset management companies. The window will be open until May 11.
Rs 3 lakh cr booster dose for MSMEs
India is considering a proposal to guarantee Rs 3 trillion ($39 billion) of loans to small businesses as part of a plan to restart Asia’s third-largest economy, which is reeling under the impact of a 40-day lockdown, reports Bloomberg. Under the proposal, small firms will be eligible to borrow an additional 20% of their credit limit. The extra debt will be fully backed by Prime Minister Narendra Modi’s administration. The government will set up a special fund to pay for any defaults.
Crisil downgrades India growth forecast
Domestic rating agency Crisil said on Monday nearly halved its GDP forecast for India to 1.8 per cent for 2020-21 while projecting total losses of Rs 10 lakh crore or Rs 7,000 per person due to “disastrous” lockdowns to control Covid-19 pandemic. The agency, which blamed the government response to the crisis to being measured and asked it to drastically up the support, had a GDP growth estimate of 6 per cent for FY2021, which was last revised to 3.5 per cent in late March.
Hold China accountable for spread of virus: US
China needs to be held accountable for the spread of coronavirus across the world, a top White House official said on Monday, as it accused the Communist nation of profiteering from the situation by exporting low-quality antibody test kits. Over the past few weeks, the Trump Administration has ramped up its rhetoric against China, accusing it of being non-transparent and holding it responsible for the spread of coronavirus across the world. The virus first emerged in the Chinese city of Wuhan before turning out to be a pandemic.
EPFO to disburse restored pension
The Employees’ Provident Fund Organisation (EPFO) will start giving out full pensions from May to those who had opted for commutation at the time of retirement. Commutation is an option given to pensioners to convert a part of their monthly pension into an upfront lumpsum payment at the time of retirement. The full pension is restored after some time, 15 years in this case. The government had in February notified the restoration.
US cautions India on ‘Google Tax’
India’s 6% equalisation levy on foreign online advertising platforms may impede its overseas trade and increase the risk of retaliation from countries where Indian companies are doing business, the US has cautioned. This is because its provisions do not provide credit for tax paid in other countries for the service provided in India, it said. In its latest report on trade barriers, the US also marked a slew of issues in India’s digital trade including those proposed in the draft ecommerce policy, such as data localisation requirements, restrictions on cross-border data flows, expanded grounds for forced transfer of intellectual property and proprietary source code, and preferential treatment for domestic digital products. Washington said it “strongly encourages India to reconsider this draft policy”.
