NEW DELHI: Domestic stocks showed promise this morning as they sought to catch up with Monday’s gains in global markets and solid trading early today. But technical charts indicated indecisiveness among market participants and it remains to be seen if the market can hold on to the intra-day gains till the end.
Here’s breaking down the pre-market actions.
SGX Nifty signals positive start
Nifty futures on the Singapore Exchange traded 93 points, or 1.03 per cent higher at 9,134 in signs that Dalal Street was headed for a positive start on Tuesday.
Tech view: Nifty forms indecisive Doji
Nifty50 snapped a three-day winning streak on Friday and formed an indecisive Doji on the daily chart. On weekly charts, the index formed a Hammer candle, indicating an intra-week recovery. The bias still remains negative, said analysts. The index may face immediate resistance in the 9,150-9,200 zone, they said.
Asian shares rise up to 1%
Japan’s Nikkei 225 index was up 0.86 per cent at 20,919.56 in early trade. Hong Kong’s Hang Seng index gained 1.07 per cent to 23,198.34. China’s benchmark Shanghai Composite index added 0.35 per cent to 2,827.90.
Oil prices steady in early trade
Oil prices, which have been driven higher for the past four weeks, were steady on Monday, with holidays in Singapore, London and New York dampening trade, as rising concerns over demand recovery offset supply cuts. Brent had eased by 5 cents, or 0.14 per cent to $35.08 a barrel.
US markets shut overnight
US markets were closed on Monday for Memorial Day. On Friday, the Dow Jones index fell 0.04 per cent to 24,465.16. The S&P500 index rose 0.24 per cent to 2,955.45. The Nasdaq Composite index added 0.43 per cent to 9,324.59.
Q4 results today
8K Miles, Blue Dart, Coromandel International, Deepak Nitrite, Jaiprakash Power, Wonderla Holidays, VIP Industries, Torrent Pharmaceuticals, SH Kelkar and Max Financial are slated to announce their March quarter earnings on Tuesday.
FIIs sell Rs 1,354 cr worth of stocks
Net-net, foreign portfolio investors (FPIs) were sellers of domestic stocks to the tune of Rs Rs 1,354 crore on Friday, data available with NSE suggested. DIIs were net sellers to the tune of Rs 344 crore, data suggests.
MONEY MARKETS
Rupee: The Indian rupee slipped 34 paise to close at 75.95 against the US dollar on Friday as Reserve Bank’s fresh measures to alleviate economic distress failed to strike a chord with investors.
10-year bonds: India 10-year bond yield fell 1.21 per cent to 5.96 after trading in 5.87-5.99 range.
Call rates: The overnight call money rate weighted average stood at 3.94 per cent, according to RBI data. It moved in a range of 2.00-4.55 per cent.
HAPPENING TODAY
- Q4 Earnings: Blue Dart | Torrent Pharma I Max Financials I Coromandel I JP Power
- Japan March All Industry Activity Index (10.00 am)
- ECB Financial Stability Review (06.30 pm)
- US March House Price Index (06.30 pm)
- US April New Home Sales (07.30 pm)
MACROS
India faces recession in Q3… The Indian economy is likely to slip into recession in the third quarter of this fiscal as loss in income and jobs and cautiousness among consumers will delay recovery in consumer demand even after the pandemic, says a report. According to Dun & Bradstreet’s latest Economic Observer, the country’s economic recovery will depend on the efficacy and duration of implementation of the government’s stimulus package. However, “in the absence of cash-in-hand benefits under the government’s stimulus package, demand for goods and services is expected to remain depressed.”
Foreign funds flee Indian bonds… Foreign funds have slashed their holdings of India’s government bonds to the lowest in three years at Rs 76,700 crore amid dwindling returns, just as the nation embarks on a mammoth borrowing plan. Steep hedging costs have also diminished payoffs in one of Asia’s highest-yielding markets even as the rupee’s plunge by about 6% in 2020 further reduced the appeal of Indian debt. They have also reduced holdings of govt bonds to three-year low at about Rs 1.1 lakh cror,eor less than 2% of India’s total outstanding debt.
Discretionary facing brisk downgrades… Ratings of consumer discretionary companies are looking increasingly dismal, with revenues for many in industries such as jewellery or automotive ancillaries set to slide by as much as 30% in FY21. And that bleak outlook is affecting their credit worthiness in the eyes of independent evaluators – credit rating firms. Of the negative 27 rating actions that India Ratings undertook between mid-April and mid-May, 53% concerned industries in the consumer discretionary segment – gems, jewellery and auto-parts makers. Eight ratings were downgraded, while 19 were either assigned a ‘negative outlook’ or placed under ‘negative’ rating watch.
Minimum wages may not rise… The government could defer mandatory increase in minimum wages for a year in a move that could result in an annual saving of Rs 7,500 crore for the private sector as well as central and state governments. The move is expected to impact more than 150 million workers. As per government estimates, 30% of the country’s total workforce is covered under the Minimum Wage Act.
India now among 10 worst-hit Covid nations… India on Monday posted its biggest single-day jump in cases of Covid-19, overtaking Iran to become one of the 10 worst-hit nations, even as the government allowed domestic air travel to restart. India reported another 6,977 cases, taking its total to 138,845, according to government data, despite the world’s longest lockdown imposed in March by Prime Minister Narendra Modi. Total deaths have passed 4,000. The rise in new cases came as some businesses and travel reopened under a new phase of the national coronavirus lockdown.
Direct tax collection rises 39%…Gross direct tax collections recorded a 13 per cent fall up to May 23 this year, compared to the same period last year, reports Business Standard. This came on the back of economic disruption caused by the outbreak. However, a sharp decline in disbursement of refunds by the tax department has bumped up net collections, which rose 39 per cent during the period.
Singapore cuts 2020 GDP outlook for third time… Singapore downgraded its 2020 gross domestic product forecast for the third time on Tuesday, the trade ministry said, as the bellwether economy braces for the deepest recession in its history. The city-state lowered its GDP forecast to a contraction range of -7 per cent to -4 per cent from the prior range of -1 per cent to -4 per cent. Singapore’s economy fell 0.7 per cent year-on-year in the first quarter, the ministry of trade and industry said, and 4.7 per cent on a quarter-on-quarter basis, a less severe decline than advance estimates.
Airtel holding firm to sell shares… Bharti Telecom, the holding company of Bharti Airtel, will sell up to 2.75% stake in the telco to raise around $1 billion (nearly Rs 7,600 crore) through a block deal on Tuesday to become a zero-debt firm and be ready to infuse more funds in the listed entity if required. The buyers are likely to include global investors such as Fidelity, Segantii Capital and Norges Bank as well as local funds such as HDFC Mutual Fund, SBI Mutual Fund and Birla Mutual Fund, said a person familiar with the matter
Airlines take to skies amid chaos… India’s airlines flew only 532 flights and 39,231 passengers on Monday, which is over half of 830 flights approved by the government last week and a fifth of about 2,500 daily flights before the shutdown in March. Indigo alone operated about 240 flights on Monday. The day was also marked by uncertainty and chaos at airports as airlines, acting on last-minute instructions from the government, cancelled nearly half the flights that were supposed to depart leaving many irate passengers in the lurch.
India to store oil in US reserves?… India is looking at storing some low priced US oil in facilities there as its local storage is full, oil minister Dharmendra Pradhan told a news channel. The plan could be similar to a move by Australia, which last month said it would build up an emergency oil stockpile initially by buying crude to store in the US Strategic Petroleum Reserve to take advantage of low oil prices. Pradhan said India had already filled its 5.33 million tonnes of strategic storage and parked about 8.5-9 million tonnes of oil on ships in different parts of the world, primarily in the Gulf.
