STATE OF THE MARKETS
SGX Nifty signals gap-down start
Nifty futures on the Singapore Exchange traded 107.50 points, or 0.76 per cent, lower at 14,069.50, in signs that Dalal Street was headed for a negative start on Tuesday.
Tech View: Nifty forms Hanging Man
Nifty50 on Monday extended the gains, but negated a higher low that it was making for eight sessions. The index formed a ‘Hanging Man’ candle on the daily chart, that usually suggests exhaustion of the ongoing momentum. Analysts said the price chart is looking extremely bullish and one should not expect weakness in Nifty50 unless it breaches the critical short-term support at 13,950 level on a closing basis.
Asian shares edge lower
Asian shares edged lower on Tuesday amid uncertainty about Senate runoffs in Georgia, which could have a big impact on incoming US President Joe Biden’s economic policies. MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.12 per cent, pulling back from a record high hit in the previous session. Australian stocks fell 0.16 per cent. Japanese shares lost 0.47 per cent after a media report that the government will curb business hours in Tokyo and surrounding cities from Thursday.
Oil falls on delays in output cut decision
Oil futures extended declines in Asian trading after major producers delayed a decision on whether to increase output. US crude futures fell 0.46 per cent to $47.40 a barrel. Major oil producers will meet later on Tuesday to decide on output levels for February after talks broke down the previous day.
US stocks settled lower
Stocks fell broadly on Wall Street Monday as the market kicked off the first day of trading in 2021 by pulling back from its recent record highs. On Monday, the S&P500 index fell 55.42 points, or 1.5 per cent, to 3,700.65. The Dow Jones Industrial Average gave up 382.59 points, or 1.3 per cent, to 30,223.89. The Nasdaq Composite index lost 189.84 points, or 1.5 per cent, to 12,698.45
FIIs buy Rs 1,843 cr worth of stocks
Net-net, foreign portfolio investors (FPIs) were buyers of domestic stocks to the tune of Rs 1,843.22 crore, data available with NSE suggested. DIIs were net sellers to the tune of Rs 715.21 crore, data suggests.
Rupee: The rupee appreciated by 9 paise to close at a four-month high of 73.02 against the US dollar on Monday, supported by sustained foreign fund inflows and weakness of the American currency overseas.
10-year bonds: India 10-year bond yield declined 0.68 per cent to 5.85 after trading in 5.85-5.90 range.
The DAY PLANNER
- US Total Vehicle Sales Dec (05:30 am)
- Euro Area Loans to Households YoY Nov (02:30 pm)
- Euro Area Loans to Companies YoY Nov (02:30 pm)
- Euro Area M3 Money Supply YoY Nov (02:30 pm)
- UK New Car Sales YoY Dec (02:30 pm)
- US ISM New York Index Dec (08:15 pm)
- US ISM Manufacturing New Orders Dec (08:30 pm)
Vaccine makers at war… Bharat Biotech CEO Krishna Ella lashed out at critics of the Indian drug regulator’s emergency approval for the company’s Covid-19 vaccine, saying it was being held up to higher standards than others such as the AstraZenaca-Oxford University one being made by Serum Institute of India (SII). He said at a virtual press conference on Monday that the approval was granted based on adequate safety data.
Spectrum sale process set to start… The telecom department, will this week, issue the notice inviting applications, the auction document containing all rules and licence conditions, kicking off the formal process in the lead to the next spectrum sale slated for March. The auctions in 700 MHz, 800 MHz, 900 MHz, 1800 MHz, 2100 MHz, 2300 MHz and 2500 MHz bands are expected to see maximum participation from Reliance Jio Infocomm (Jio), while rivals Bharti Airtel and Vodafone Idea (Vi) may choose to largely fall back upon their spectrum backups, say experts.
HNIs fret over MNC dividends… High net worth investors with a strong risk appetite and lots of patience could consider the NFO of ICICI Prudential Business Cycles Fund. Investment advisers said such investors could allocate as much as 5-10% of their equity portfolio to the fund. Those investors with a lower tolerance for risks should stay away because of its relatively concentrated portfolio and aggressive bets that could take longer-than-expected to fructify or even backfire.
No dent to consumer spending… Covid-19 didn’t dent big-ticket consumer spending in 2020, as initially feared by companies. Latest data from top firms and trackers show the market for smartphones and consumer electronics was flat or grew 1% compared with 2019, suggesting a complete recovery from the pandemic’s impact. For passenger vehicles, the market bounced back to 15% growth in H2.
Manufacturing sector gains speed… The health of the India’s manufacturing sector continued to strengthen at the end of 2020 with manufacturers stepping up production in December even though employment decreased and the degree of optimism weakened, a private survey showed on Monday. The IHS Markit India Manufacturing Purchasing Managers’ Index was at 56.4 in December, a tick higher than November’s reading of 56.3 and above the critical 50 threshold, that differentiates expansion from contraction, for the fifth straight month.
Economic upcycle in full swing… In an encouraging start to the New Year, financial services major Nomura on Monday said its weekly tracker that measures economic normalisation in India, has touched a new high starting January reflecting a further moderation in new cases and also indicated an economic upcycle in 2021. Led by an improvement in mobility indices, in sync with the holiday season, the Nomura India Business Resumption Index picked up to 94.5 for the week ending 3 January from an average of 91.7 December.
Rate-cut transmission very slow… Rate-cut transmission for the end user has trailed the pace at which India’s central bank reduced the cost of funds, and the country’s deposit mobilisation structure is largely considered responsible for the relatively slower percolation effect. RBI slashed rates 115 basis points (one bps is 0.01%) since March, but the weighted average lending rates have fallen 40 bps and 50 bps, respectively, on outstanding and fresh loans between April and November.
RIL says no plan for contract farming… RIL said it has no plans to enter contract farming and has nothing to do with the three agricultural laws that have sparked the farmers’ protest. It wouldn’t benefit in any way from the legislation, the company said in a statement on Monday, accusing rivals and others of a “malicious and motivated campaign.” Reliance Jio Infocomm, RIL’s telecom unit, moved the Punjab and Haryana High Court, seeking urgent action to stop destruction of its towers and infrastructure.