STATE OF THE MARKETS
SGX Nifty signals flat start
Nifty futures on the Singapore Exchange traded 13 points, or 0.09 per cent, higher at 14,063, in signs that Dalal Street was headed for a flat to positive start on Thursday.
Tech View: Nifty forms Dragonfly Doji
Despite trading in a positive zone, the indecisive price actions on Nifty50 are being accompanied by narrow trading range and overbought readings on the momentum oscillators. While the technical indicators are yet to generate sell signals, analysts warned that a similar situation with a narrow range and overbought levels had resulted in a sudden single day flash crash on December 21. They advised traders to exercise utmost caution.
Oil falls 0.4%, sets for 20% drop in 2020
Global crude oil markets have lost about a fifth of their value in 2020 as strict coronavirus lockdowns paralyzed much of the global economy, but prices have rebounded strongly from their lows as governments rolled out more stimulus. On Thursday, the last trading day of 2020, Brent was trading down 18 cents, or 0.4 per cent, at $51.45 a barrel and US WTI lost 0.1 per cent, or 5 cents, to $48.35 a barrel.
Asian shares hover near record high
Asian shares are set to end a tumultuous 2020 by hovering near record highs on Thursday, buoyed by hopes that COVID-19 vaccine rollouts will help the world beat the pandemic. E-Mini S&P futures rose 0.11 per cent to 3,728.5, while MSCI’s gauge of Asia-Pacific shares excluding Japan was little changed at 661.76, a hair’s breath from its record high of 661.80. Australian shares lost 0.23 per cent while the Japanese stock market is shut on Thursday.
Dow edges to record as US stock rally resumes
Wall Street stocks resumed their holiday season rally Wednesday, shrugging off the dimming chances of more US stimulus being enacted while another coronavirus vaccine advanced. The Dow Jones Industrial Average finished up 0.2 percent at 30,409.56, narrowly overtaking an all-time high registered on Monday. The broad-based S&P 500 added 0.1 percent at 3,732.04, while the tech-rich Nasdaq Composite Index gained 0.2 percent to 12,870.00.
Margin rule impact miniscule
The new margin rule introduced by the market regulator from December 1 has had little impact on trading volumes on both cash and derivatives segments this month, contrary to concerns that it could hurt trading activity. Average daily volume in derivatives segment in December was at a record high of Rs 32.15 lakh crore. In the cash segment, it was just 3% lower than in November at Rs 68,000 crore a day. The volumes show liquidity is not a major issue for the Indian retail investor. Volumes are unlikely to go down drastically because of a sharp market rally, increase in client margin through pledge of shares and a gradual streamlining of the process.
Pharma, IT funds on top for 2020
Mutual fund schemes investing in pharma and healthcare, technology and international stocks were the top performers in 2020 — a year that tested investors’ nerves with the stock market swinging from extreme pessimism to record highs within nine months. Data from ETIG showed as many as 18 funds from these categories returned more than 50% during the year with five of them giving over 70%. The Nifty has gained almost 15% so far this year.
FIIs buy Rs 1,825 cr worth of stocks
Net-net, foreign portfolio investors (FPIs) were buyers of domestic stocks to the tune of Rs 1,824.52 crore, data available with NSE suggested. DIIs were net sellers to the tune of Rs 587.43 crore, data suggests.
Rupee: Rising for the fifth straight session, the rupee on Wednesday appreciated by 11 paise to close at more than two-month high of 73.31 against the US dollar on the back of foreign fund inflows and a weak greenback in the global markets.
10-year bonds: India 10-year bond yield fell 0.73 per cent to 5.93 after trading in 5.89-5.93 range.
Call rates: The overnight call money rate weighted average stood at 3.15 per cent, according to RBI data. It moved in a range of 1.9-3.5 per cent.
DATA/EVENTS TO WATCH
- India Infrastructure Output YoY Nov (05:00 pm)
- India Government Budget Deficit Nov (05:00 pm)
- India External Debt Q3 (05:00 pm)
- China NBS Manufacturing PMI Dec (06:30 am)
- China Non-Manufacturing PMI Dec (06.30 am)
- US Jobless Claims 4-Week Average 26/Dec (07:00 pm)
- US Initial Jobless Claims 26/Dec (07:00 pm)
- US Continuing Jobless Claims 19/Dec (07:00 pm)
Headway in talks with farmers… While the Centre and farmers’ unions made some headway on Wednesday over concerns on the air pollution ordinance and the draft electricity bill, the deadlock on the three farm laws and MSP remained. Protesting farmers are demanding the laws be repealed and MSP get legal backing. These issues are likely to be taken up in the next round of talks, on January 4.
Panel seeks more info on Covid vaccines… The Subject Expert Committee of the Indian drug regulator has sought additional information from Serum Institute of India (SII) and Bharat Biotech while not clearing their Covid-19 vaccine market approval applications on Wednesday. The next meeting of the panel will be held on Friday. “The additional data and information presented by SII and Bharat Biotech Pvt Ltd was perused and analysed by the SEC. The analysis of the additional data and information is going on,” the health ministry said in a statement.
Britain okays Oxford vaccine… Britain on Wednesday became the first nation to approve the coronavirus vaccine developed by AstraZeneca and the University of Oxford, as Germany logged its highest daily death toll with the pandemic surging worldwide. Oxford and AstraZeneca’s Covid-19 vaccine can be 80% effective when there are three months between shots, an official involved in approving the vaccine in Britain said, but there is insufficient evidence to back a regime involving a half dose.
India Inc wants single I-T structure… Industry has sought reintroduction of the single structure of income-tax instead of the current one that gives two options to taxpayers, saying that it had made compliance on withholding tax a complex process for employers, leading to higher cost and tax leakages. This was among several recommendations made by the Confederation of Indian Industry (CII) to the finance ministry ahead of the union budget announcement.
Current account surplus at $15.5b in Q2… India’s current account surplus moderated to $15.5 billion or 2.4 per cent of the GDP in the July-September quarter of the current fiscal, the RBI said on Wednesday. The same was at $19.2 billion or 3.8 per cent of the GDP in the preceding three-month period on account of a rise in the merchandise trade deficit, the RBI said.
Private lenders lag PSU banks in deposits… Deposits for public sector banks grew at a higher pace than usual despite their lower deposit rates and amid stress on a few private banks. Term deposit growth of public sector banks quadrupled but it decelerated sharply for private banks, RBI said. For the banking sector as a whole, term deposits – contributing almost 60% of total deposits – moderated, reflecting the easing of interest rates and the lure of returns on competing asset classes.
8.5% interest on PF for FY20… The finance ministry has accepted the labour ministry’s proposal for crediting 8.5% interest on provident fund deposits for 2019-20, a move that will benefit nearly 60 million subscribers of the Employees Provident Fund Organisation (EPFO). A senior government official told ET that the interest rate will soon be notified by the labour ministry. EPFO’s Central Board of Trustees, the apex decision-making body under the labour minister, had in March this year approved 8.5% interest rate on EPF for 2019-20.