Dalal Street looked headed for a negative start and stock-specific action is likely to dominate Thursday’s proceedings amid quarterly earnings and expiry of weekly option contracts.
Here’s breaking down the pre-market actions.
SGX Nifty signals negative start
Nifty futures on the Singapore Exchange traded 62 points, or 0.68 per cent lower at 9,024 in signs that Dalal Street was headed for a negative start on Wednesday.
Nifty breaks 9,050 resistance
Analysts said the 9,100-9,158 range could pose some resistance, while support is seen near the 9,000 level. A strong recovery without a follow through to the Nifty breakdown registered on May 18 is hinting that the index might be in the process of chalking out a new trading range, they said.
Asian markets inch higher
Elsewhere in Asia, Hong Kong’s Hang Seng added 0.53 per cent, or 128.96 points, to 24,528.91. China’s benchmark Shanghai Composite edged up 0.24 per cent, or 6.98 points, to 2,890.72. Japan’s Nikkei 225 was up 0.53 per cent or 109.39 points at 20,704.54.
Oil prices climb on ease in supply glut
Oil prices edged higher after data showed US crude inventories fell again, easing concern about a supply glut, though lingering fears over the global economic fallout from the COVID-19 pandemic capped gains. Brent crude futures for July delivery were trading up 17 cents, or 0.5%, at $35.92 per barrel.
US stocks ended higher overnight
US stocks rose in overnight trade, bolstered by solid gains in energy sector. The Dow Jones Industrial Average index rose 369.04 points, or 1.52 per cent, to 24,575.90. The S&P500 index added 48.67 points, or 1.67 per cent, to 2,971.61. The Nasdaq Composite index gained 190.67 points, or 2.08 per cent, to 9,375.78.
Q4 earnings today
Bajaj Finserv, Bajaj Holdings, Colgate-Palmolive India, Hawkins, Hindustan Zinc, Jubilant Industries, Quick Heal Technologies, Tata Metaliks, VST Industries and 3i Infotech are scheduled to announce their march quarter results on Thursday.
Japan factory PMI drops in May
The decline in Japan’s factory activity accelerated in May as output and orders slumped. The au Jibun Bank Flash Japan Manufacturing Purchasing Managers’ Index (PMI) slipped to a seasonally adjusted 38.4 from a final 41.9 in April, its lowest since March 2009.
DIIs buy Rs 2,373 cr worth of stocks
Net-net, foreign portfolio investors (FPIs) were sellers of domestic stocks to the tune of Rs 1466.52 crore on Wednesday, data available with NSE suggested. DIIs were net buyers to the tune of Rs 2,373 crore, data suggests.
MONEY MARKETS
Rupee: The rupee depreciated by 14 paise to close at 75.80 against the US dollar on Wednesday as headwinds due to US-China trade tiff and worries over the second wave of coronavirus infection weighed on investor sentiment.
10-year bonds: India 10-year bond yield rose 0.10 per cent to 6.04 after trading in 6.02-6.04 range.
Call rates: The overnight call money rate weighted average stood at 3.92 per cent, according to RBI data. It moved in a range of 2.30-4.55 per cent.
HAPPENING TODAY
- Q4 Earnings: Bajaj Finserv I Birla Corp I Colgata-Palmolive I Hindustan Zinc I Tata Metalics
- Japan April Balance of Trade (05.20 am)
- UK Markit Flash PMI for May (02.00 pm)
- US May Initial Jobless Claims (0.600 pm)
- US May Flash Manufacturing PMI (07.15 pm)
- US April Existing Home Sales (07.30 pm)
MACROS
Flights set to resume from Monday… Domestic flights will finally start taking to the skies from Monday (May 25) in a gradual manner, two months after being stopped as part of the national lockdown imposed to check the spread of the novel coronavirus. Bookings will start from Thursday. However, international flights will stay grounded for now. Airports will aim for contactless entry of flyers. The ministry is also looking at fare-capping by putting upper and lower limits that airlines can charge for different routes.
Now KKR eyes Jio platform stake… KKR and Co is in active discussions to invest in Reliance Industries’ Jio Platforms, seeking to join peers and technology-focused investors like Silver Lake, Vista Partners and General Atlantic and back the telecom technology-commerce triple play that Mukesh Ambani is aiming for. KKR has been carrying out diligence for a while now and is expected to be nearing a deal that might see it deploying between $750 million and $1 billion, similar to previous rounds.
NBFC scheme finalised… The government has finalised a special liquidity scheme for NBFCs and widened the scope of its existing guarantee to public sector banks that finance them. Under the Rs 30,000-crore special liquidity scheme, a large PSU bank will float a special purpose vehicle, or SPV, which will issue bonds guaranteed by the government, to be purchased by RBI. The SPV will use the funds so raised to manage a stressed asset fund to purchase bonds issued by NBFCs that will mature within three months.
Banks want IBC cases fast-tracked… Leading banks have reached out to the Ministry of Corporate Affairs to fast-track 40 high-value insolvency cases that have been resolved and are awaiting approval from the bankruptcy courts. With prospects of almost zero recovery over the next few months, banks are worried that buyers may call off deals or reduce valuations significantly if the final approvals are delayed due to stalled economic activity.
Sebi okays listing of MF schemes… Markets regulator Sebi has allowed listing of units of mutual fund schemes that are being closed down. The decision is seen as a move by the regulator to help the over three lakh unit holders of Franklin Templeton MF’s six schemes by giving them the option to exit earlier than the full closure. However, such exits are likely to be at a huge discount to their actual value, industry players said.
India Inc told to disclose Covid hit…. Sebi has asked listed companies to disclose the expected impact of the lockdown on account of Covid-19 on their revenues and profits, in line with international practices. The move is aimed at helping investors assess the extent of damage caused by the disruption on the business. Rules mandate companies to disclose material events which have a bearing on their performance or operations in case of such disruptions.
Ola lets go one-fourth of work force…. Ride-hailing service Ola has asked over a quarter of its workforce in India to leave the company in a bid to combat the economic disruption wrought by Covid-19. Ola has seen revenue drop by 95% in the past two months, founder and CEO Bhavish Aggarwal wrote in an email to employees on Wednesday, resulting in the decision to lay off employees in order to reduce costs amidst the pandemic.
For Auto Inc, the worst yet to come… The lockdown’s far reaching blow to the auto sector has been so drastic that the industry body SIAM estimates that the auto industry would lose Rs 2,300 crore turnover every day due to the lockdown. The lobby body has projected that the country will witness a massive drop in auto sales, which could be as high as 35% for some segments. This, it says, is over and above the 18% de-growth of FY20.
India Inc’s FDI dips 62% in April… India’s overseas direct investment (ODI) in April dipped 62 per cent to $976.14 million, data from the Reserve Bank showed. The fall in ODI can mainly be attributed to the coronavirus pandemic, which led to a global lockdown and halt in most of the business activities. Domestic firms had invested nearly $2.56 billion in joint ventures/wholly-owned subsidiaries during April 2019, according to the RBI data on Outward Foreign Direct Investment.
