A spike in Covid-19 cases, concerns over economic activities due to further extension of lockdown and weak global setup may cap upside for domestic stocks on Wednesday. Stocks-specific action is likely, amid a host of quarterly earnings scheduled for the day.
Here’s breaking down the pre-market actions.
SGX Nifty signals positive start
Nifty futures on the Singapore Exchange traded 24.25 points, or 0.27 per cent higher at 8,915.30 in signs that Dalal Street was headed for a positive start on Wednesday.
Nifty support at 8,800 level
Analysts expect selling to emerge on any fall below the 8,800-8,850 range. They see upside for Nifty50 capped at 9,050 level in the near term.
Asian markets edge higher
Elsewhere in Asia, stocks remained under pressure, tracking declines on Wall Street. Hong Kong’s Hang Seng edged up 0.31 per cent, or 74.77 points, to 24,462.90. China’s benchmark Shanghai Composite dipped 0.07 per cent, or 2.11 points, to 2,896.47. Nikkei 225 was up 0.27 per cent, or 54.65 points, at 20,488.10 in early trade.
Oil prices fall in early trade
Oil prices dipped as concerns over the lasting economic fallout from the coronavirus pandemic outweighed signs of improving demand and production cuts by major oil producers. Brent crude futures for July delivery were trading down 11 cents, or 0.3 per cent, at $34.54 per barrel.
US stocks ended lower overnight
On Tuesday, the Dow Jones Industrial Average index fell 390.51 points, or 1.59 per cent, to 24,206.86. The S&P500 declined 30.97 points, or 1.05 per cent, to 2,922.94. The Nasdaq Composite index shed 49.72 points, or 0.54 pe rcent, to 9,185.10,
Q4 earnings today
Bajaj Auto, Dr Reddy’s Labs, Ultratech Cement, JSW Energy, Jubilant Foodworks, Ajanta Pharma, Kalpataru Power, Matromony.com and JK Lakshmi Cement are some of the companies which will disclose their March quarter results today.
RIL rights issue opens today
Reliance Industries’ Rs 53,125 crore rights issue will open for subscription today and close on June 3.
This is the first rights issue by RIL in nearly three decades. The rights issue is priced at Rs 1,257 per share with a share ratio of 1:15.
DIIs buy Rs 1,660 cr worth of stocks
Net-net, foreign portfolio investors (FPIs) were sellers of domestic stocks to the tune of Rs 1,328 crore on Tuesday, data available with NSE suggested. DIIs were net buyers to the tune of Rs 1,660 crore, data suggests.
MONEY MARKETS
Rupee: The rupee appreciated by 25 paise to settle at 75.66 against the US dollar on Tuesday as reports of initial success in COVID-19 vaccine trials boosted investor sentiment world over.
10-year bonds: India 10-year bond yield fell 0.25 per cent to 6.03 after trading in 6.02-6.06 range.
Call rates: The overnight call money rate weighted average stood at 3.84 per cent, according to RBI data. It moved in a range of 2.30-4.50 per cent.
HAPPENING TODAY
- Q4 Earnings: Bajaj Auto I Chennai Petro I Dr Reddy’s I JSW Energy I Jubilant Foodworks I Ultratech Cement
- UK April Infation Rate (11.30 am)
- EIA May Crude Oil Stock Change (08.00 pm)
- Euro Area May Consumer Confidence (07.30 pm)
MACROS
FM says 2013 lessons guided stimulus… Finance Minister Nirmala Sitharaman says the government kept the lessons of the 2008-13 period in mind when designing its Rs 20 lakh crore stimulus package, and asserts that announced since last week cannot be boxed into “supply side measures” as they put money in the hands of people who will spend and create demand. On future stimulus measures, she said “As we go forward we have to keep assessing.” On further stimulus, the FM said “As we go forward, we have to keep assessing more stimulus”.
India Inc fundraise on a high… India Inc may be heading for one of its best ever fundraising years in FY21 as companies rush to take advantage of low rates and shore up their capital after the devastating impact of Covid-19 related disruptions. Filings so far in April and May show that companies have announced plans to raise Rs 1.5 lakh crore in debt and equity which include Reliance Industries’ Rs 53,000 crore rights issue.
Wealthy sends record money abroad…Indian remittances overseas surged to a record in March as many wealthy Indians might have shifted a part of their savings to safe haven assets and to purchase popular technology company stocks, taking advantage of the sudden collapse in valuations. Indians sent a record $18.75 billion in FY’20 under the liberalised remittance scheme, whose scope was widened in 2015 to facilitate investments in overseas markets, send money for maintenance of close relatives abroad and other purposes.
Ecommerce sees demand surge… With the government allowing online sale of non-essentials in red zones, consumers flocked to e-commerce platforms, resulting in a spike in sales coming from pent-up demand. E-tailers like Amazon and Flipkart have seen a “significant” spike in sales in categories like work-from-home equipment, smartphones along with kitchen and home appliances. Vertical online platform furniture retailer Pepperfry has also seen demand double over the last couple of weeks as it starts delivering study chairs and desks.
India Inc seeks to avoid Q2 earnings… Companies have approached Sebi to allow listed firms to either postpone their financial results for the June quarter or merge them with the September numbers amid growing concern that wide losses and decline in sales between April and June could unsettle investors and put off banks. Some leading industry bodies have also urged Sebi to consider relaxing rules on pricing of preferential equity offer and open offer to enable capital infusion and simplify the process for delisting.
Govt pushes NBFC Covid relief…. The government is in talks with RBI on how best to ensure that the Rs 30,000 crore relief package for NBFCs is targeted at those that need it most, particularly since lower-rated paper of investment grade will be the focus. This assumes importance after RBI’s Rs 2.5 lakh crore Targeted Long Term Repo Operation saw banks subscribing mostly to bonds issued by top-rated companies
NPA provision rules may be eased… The one-year suspension for filing new cases under the Insolvency and Bankruptcy Code and a default holiday for loans taken to deal with Covid-19 is likely to force RBI to soften its restructuring and provisioning norms to deal with stressed assets. Bankers said the blanket ban on new IBC entries leaves restructuring of loans as the only plausible route to cure default, but stringent RBI norms will have to be amended.
Jobless rate steady… India’s unemployment rate was at 24% for the week ended May 17, the same as the previous week, independent think tank CMIE said. With the gradual opening up of industries, there has, however, been an increase in labour participation rate. “Halfway into May, the unemployment rate appears to be around the same level as in April, mostly higher by a whisker,” it said.
More trains set to resume service... Indian Railways is set to operate 200 non-air-conditioned trains every day starting June 1. They will run on a timetable and passengers can book tickets online, the railway ministry said in a statement. Booking will commence in a few days and schedule and the routes will be announced soon, the ministry said. No tickets will be sold at railway stations, it added.
Moody’s finds stimulus too less… Moody’ s Investors Service on Tuesday said the measures announced by the government for financial institutions as part of Rs 20 lakh crore-economic package will help ease their asset risk, but will not fully offset the negative impact from the COVID-19 outbreak. The government last week announced a support package of Rs 3.70 lakh crore for micro, small and medium enterprises (MSME) sector, Rs 75,000 crore for financial companies (NBFCs) and Rs 90,000 crore for power distribution companies.
