Domestic stocks are showing signs of fatigue after the recent rally. Globally, US stocks ended higher overnight, but Asian markets are largely flat this morning, hinting at a muted start for the domestic bourses.
Here’s breaking down the pre-market actions.
STATE OF THE MARKETS
SGX Nifty signals positive start
Nifty futures on the Singapore Exchange traded 37.5 points, or 0.35 per cent higher at 10,721, in signs that Dalal Street was headed for a positive start on Thursday.
Tech View: Bears make a comeback
Nifty50 on Wednesday snapped a five-day winning streak and formed a bearish candle on the daily chart. It had been losing momentum for some time now, as the narrow trading ranges of the past few sessions suggested. The trend emerged as the index fast approached its 200-day simple moving average, whose value was placed at 10,887 on Tuesday. Analysts largely see support for the index in the 10,620-650 range and the immediate hurdle at 10,750 level.
Asian shares edge higher in early trade
Japan’s Nikkei 225 index edged up 0.30 per cent or 66.48 points to 22,505.13 in early trade. Hong Kong’s Hang Seng index rose 0.85 per cent, or 221.95 points, to 26,351.13. CHina;s benchmark Shanghai Composite index ticked 0.04 points up to 3403.48, while the Shenzhen Composite Index on China’s second exchange inched down 0.17 points to 2,198.45.
Wall Street rally back on track
The Dow Jones Industrial Average rose 177.10 points, or 0.7 per cent, to 26,067.28, and the Nasdaq composite gained 148.61, or 1.4 per cent, to 10,492.50 to set another record. The S&P 500, which more index funds benchmark themselves against, rose 24.62 to 3,169.94 and is back within 6.4 per cent of its record.
Oil prices flat as virus cases rise
Oil prices barely moved in early trade on Thursday as positive momentum from signs of a recovery in US gasoline demand was tempered by concerns about renewed lockdowns with coronavirus infections surging in the United States. US WTI crude futures were unchanged at $40.90 a barrel, after rising 0.7 per cent on Wednesday. Brent crude futures inched up 3 cents to $43.32, after gaining 0.5 per cent on Wednesday.
FPIs sell Rs 995 cr worth of stocks
Net-net, foreign portfolio investors (FPIs) were sellers of domestic stocks to the tune of Rs 994.87 crore, data available with NSE suggested. DIIs were net buyers to the tune of Rs 853.41 crore, data suggests.
Retail participation in equities at 15-year high
Retail participation in Indian equities has surged to a 15-year high in July as investors shifted from unattractive bank and corporate fixed deposits to take advantage of the market’s sharp recovery from the March lows. After hitting a 10-year high of 68% in June, retail participation has risen to 72% of the total cash market turnover so far in July. These levels were last seen in 2005, the mid-point of the 2003-07 bull market.
Rupee: The rupee skidded 9 paise to close at 75.02 against the US dollar on Wednesday amid rising crude oil prices and a firm greenback.
10-year bonds: India 10-year bond yield fell 0.24 per cent to 5.77 after trading in 5.76-5.88 range.
Call rates: The overnight call money rate weighted average stood at 3.47 per cent, according to RBI data. It moved in a range of 1.80-4.10 per cent.
DATA/EVENTS TO WATCH
- Q1 Earnings: TCS
- Japan Stocks Investment by Foreigners as of July 4 (05.20 am)
- China June Inflation Rate (07.00 am)
- Australia May Home Sales (07.00 am)
- US July 4 Initial Jobless Claims (06.00 pm)
- Eurogroup Meeting
Overseas flight plan in the works… India is likely to have “special arrangement aerial connectivity” with the US, France and Germany within a week. The airlines of all these countries will be allowed to operate flights and ferry passengers to and from India. These airlines would be eligible under home ministry rules, said people in the know. Talks with the US, France and Germany are at a very advanced stage and the announcement could be made within a week. India is also in discussions with the United Arab Emirates to facilitate travel from here.
Rs 80,000 cr bank fund raising on… ICICI Bank’s board on Wednesday approved a proposal to raise Rs 15,000 crore through issue of fresh equity. This has taken the tally of completed and proposed equity issuances by banks this year to nearly Rs 80,000 crore. Banks are taking advantage of the buoyancy in the capital market, making it the largest fund-raise from the markets in any year. The bulk of the capital is being raised by private banks who have already crystallised their plans, while public sector lenders like SBI and PNB have also said that they will tap the market.
Flows to mutual fund slip below Rs 8,000 cr… SIPs Small investors have started feeling the pinch of declining cash flows due to Covid-related issues like salary cuts, job losses, furloughs and delay in credits of wages. This is showing up in their shrinking contributions to systematic investment plans (SIPs) in mutual fund (MF) schemes. Consider this: Since December 2018, investors were contributing Rs 8,000-crore plus every month. But in June this year, total monthly mutual fund SIP flows fell below that mark for the first time in 18 months to Rs 7,927 crore, Amfi data showed.
Railways plans major upgrade… Indian Railways has chalked out a massive upgradation plan that includes seeking redevelopment bids for 150 stations as it hopes to end FY21 with a surplus as the freight business looks up. It is looking to have 151 high-speed private trains operational by 2023, said VK Yadav, Chairman, Railway Board.
E-com to display country of origin… The government has asked ecommerce platforms such as Amazon and Flipkart to display the country of origin on new products listed by sellers on their sites by August 1 and legacy items by October 1 without stipulating a deadline. The companies sought more time to implement the changes, which are part of the government’s plan to curb imports, at an online meeting with officials on Wednesday.
Zoom weighs legal suit against JioMeet… Zoom Video Communications India head Sameer Raje said he was “shocked” at the resemblance that recently launched JioMeet has with the Zoom app. He said there have been a “lot of discussions internally” about pursuing a legal route. Zoom is also trying to clarify the misinformation that it is a Chinese firm
HNIs regain confidence in NBFCs… Wealthy investors and family offices appear to have regained confidence in NBFCs, which were finding it tough to raise money last year. Sales of market-linked debentures — securities where payouts are determined at the time of maturity — have gone up to pre-pandemic levels with the likes of Edelweiss, Anand Rathi, Centrum, and Mahindra Finance raising more than Rs 2,000 core in the April-June quarter from yield-hungry investors.
MFI, NBFC collections pick up fast… Collection efficiency for most non-bank lenders, small finance banks and microfinance institutions (MFIs) has improved in June to 50-60% of the levels seen before the lockdown, from as low as 20% in April. Collections were the highest in asset-backed securities and non-MFI loans at nearly 70%, followed by mortgage-backed loans at 60% and small-ticket borrowing at about 50%. Magma Housing Finance said it witnessed strong resurgence in June collections, which more than doubled from May.
India Inc set to post worst Q1 sales… India Inc’s biggest companies are set to post their worst sales performance in nine quarters in April-June 2020, but profit fall will be cushioned by a better-than-expected show by banks and consumer firms. An analysis of the Nifty50 companies showed aggregate revenue for the sample will fall 23.2% year-onyear. Net profit is expected to drop only 6.9% with about two-thirds of the companies expected to report a fall.
PSU insurers’ merger plan shelved… The government has called off the merger of the three public sector non-life insurers — National Insurance, Oriental Insurance and United India Insurance — and has announced an additional capital infusion of Rs 9,950 crore. The Union Cabinet on Wednesday approved a Rs 12,450-crore equity infusion into the non-life companies, which includes the Rs 2,500 crore already invested in FY20.
Big Covid hit on health insurers… India’s health insurance sector is feeling the financial brunt of the coronavirus pandemic, with claimed amounts more than tripling to Rs 562 crore in less than a month, led by Maharashtra and Delhi. The number of claims also tripled to 35,000 on July 3 from about 11,000 reported on June 8, according to data from the General Insurance Council.
Top varsities oppose US fiat on students… MIT and Harvard University have filed a joint lawsuit against the US government’s decision to deport foreign students if they do not attend in-person courses despite the raging Covid pandemic. In a plea before a Massachusetts court seeking declaratory and injunctive relief, MIT and Harvard said the Immigration and Customs Enforcement announcement would disrupt international students’ life and jeopardised their academic pursuits. They said for many students, returning home at this point could be “impossible, impracticable, expensive and dangerous.”