SGX Nifty up 120 points; here’s what changed for market while you were sleeping

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SGX Nifty up 120 points; here's what changed for market while you were sleeping


The $2 trillion infrastructure spending plan unveiled by the US President Joe Biden pushed US stocks to record highs on Wednesday and triggered strong buying in Asian markets on Thursday. These developments are likely to give domestic stocks a firm start too.

Here’s breaking down the pre-market actions.

STATE OF THE MARKETS

SGX Nifty signals positive start
Nifty futures on the Singapore Exchange traded 118.50 points, or 0.80 per cent, higher at 14,864.50 in signs that Dalal Street was headed for a positive start on Thursday.

Tech View: Nifty has support at 14,620
If the index trades below 14,670 level on Thursday, it would make an attempt to bridge the bullish gap present in the 14,617-14,572 zone, which was formed on March 30. Usually, such gaps act as support points on the downside and, hence, some buying should be expected if the index approaches the said zone, said analysts.

Asian markets rise in early trade

Asian stocks were set to edge higher early on Thursday after big tech rallied on Wall Street and as President Joe Biden announced a multi-trillion-dollar infrastructure investment plan. Australian S&P/ASX 200 index rose 0.3 per cent in early trading, while Hong Kong’s Hang Seng index rose 0.54 per cent.Japan’s Nikkei225 index advanced 1.20 per cent.


US stocks settled higher

The S&P500 index rose 14.34 points to 3,972.89. It was the index’s first gain since it set a record high at the end of last week. A late-afternoon fade pulled the Dow Jones Industrial Average 85.41 points lower, or a drop of 0.3 per cent, to 32,981.55. The tech-heavy Nasdaq composite climbed 201.48 points, or 1.5 per cent, to 13,246.87.

DIIs buy Rs 2082 crore worth stocks
Net-net, foreign portfolio investors (FPIs) were sellers of domestic stocks to the tune of Rs 1,685.91 crore, data available with NSE suggested. DIIs were net buyers to the tune of Rs 2081.52 crore, data suggests.

MONEY MARKETS

Rupee: The rupee closed higher by 26 paise at 73.12 (provisional) against the US dollar on Wednesday and ended the fiscal on a strong note with a gain of over 3 per cent despite coronavirus-induced disruptions on the economic front.

10-year bonds: India 10-year bond yield rose 0.55 per cent to 6.17 after trading in 6.14-6.18 range.

Call rates: The overnight call money rate weighted average stood at 3.22 per cent, according to RBI data. It moved in a range of 1.90-3.50 per cent.

MACROS

MPC inflation target stays unchanged… The government has opted to keep the inflation target under the monetary policy framework unchanged at 4% for the next five years, indicating stability in the regime. “Inflation target for April 1, 2021 to March 31, 2026 under the RBI Act 1924 has been kept at the same level as it was for the previous five years. There is no change,” economic affairs secretary Tarun Bajaj told reporters. The framework allows RBI to target inflation in the band of 2% to 6%.

QIPs beat IPOs in equity raising… Equity fundraising through qualified institutional placements (QIP) has outpaced the proceeds from initial public offers (IPO) for the second fiscal year in a row. Indian companies raised ₹78,731 crore via QIP in FY21, the highest amount ever raised in a year, compared with ₹31,511 crore raised from the IPO route, according to Prime Database. Over the past two years, the pace of fundraising through QIPs has increased significantly. This is reflected in the ratio of the equity proceeds from QIPs and IPOs, which jumped to 2.5 during the period compared with the five-year average of 1.4

Dividend policy must for top 500 listed firms… In a year when several large and small companies have altered their dividend policies, market regulator Sebi’s new rule extending the requirement of formulation of dividend distribution policy by the existing top 500 listed entities to the top 1,000 listed entities (based on market cap) has proved to be a timely move. Accumulated surpluses, excess liquidity with companies and limited opportunities to invest in the short-to-medium term are prompting companies to reward their shareholders handsomely.

JPMorgan warns fresh lockdown possible… Indian authorities may be forced to impose lockdowns if the number of coronavirus cases continues to rise sharply, said JP Morgan. India is currently seeing a record daily surge in coronavirus cases amid the second wave of the pandemic that has plagued the world for over a year now. “The authorities have imposed some local restrictions to contain the proliferation of Covid-19, but they seem to be reluctant to impose hard lockdowns due to the economic costs,” JPMorgan said in a note.

Govt cuts small savings rates & then rolls back… The Centre has quickly rolled back a decision to cut interest rates on small savings schemes. A day after announcing the decision to slash rates on instrument such as post office deposits and PPF by up to 110 basis points, dealing a fresh blow to savers seeking safety, the Finance Ministry said interest rates of small savings schemes of GoI shall continue to be at the rates that existed in the last quarter of 2020-2021. The new rates would have brought down the rate of interest on PPF to its lowest since 1974 at 6.4%.

Govt to borrow Rs 7.2 lakh cr in H1… After borrowing at lowest cost since 2004-05, the Centre is hoping to raise funds at “reasonable” rates during the new fiscal year as it announced plans to complete 60% of the proposed market borrowings by September. The government and rbi, which finalised the borrowing calendar, have planned to borrow Rs 7.2 lakh crore during the first half, which is little more than 60% of the gross market borrowings of over Rs 12 lakh crore.

Core infra sector contracted in Feb… The key infrastructure sector contracted at its fastest pace in six months in February, dragged down by a decline in all the eight crucial segments triggering fresh worries over the health of the industrial sector. Data released by the Department for Promotion of Industry and Internal Trade (DPIIT) on Wednesday showed the eight core sectors — spanning coal, steel, cement, refinery products, crude

, natural gas, fertilisers and electricity — contracted by 4.6% in February after rising 0.9% in the previous month and sharply below the 6.4% growth in February 2020.

US Prez Joe Biden unveils $2 trillion package… US President Joe Biden has unveiled a $2 trillion package to upgrade and overhaul American physical infrastructure. Biden’s proposals include raising the corporate tax rate to 28 per cent from 21 per cent and efforts to force MNCs to pay significantly more in tax to the US on profits they earn and book overseas. His proposals also included an investment of $621 billion into transportation infrastructures.

March auto sales data likely today… A low base of last year will distort monthly auto sales figures for March on a year-on-year basis. On a month-on month basis, wholesales growth is expected to remain strong while retail volumes are also expected to be better than February’s, as per channel checks, said analysts, who believe investors must track risks of rising Covid cases, semiconductor shortages and high fuel prices.

India’s growth forecast raised… The World Bank raised its forecast of India’s growth in 2021-22 substantially to 10.1% from the 5.4% it had projected in January. In a report titled ‘South Asia Vaccinates’, it said improvements came on the back of the country’s vaccination drive, which is likely to spur activity in contact-intensive sectors, and that the infrastructure push in the Union Budget is expected to aid growth momentum and revive domestic demand.

Current account ends Q4 in deficit… India’s current account ended in a deficit during the December quarter — the first time in FY21 — with the unlocking of the economy leading to a demand revival even as crude and commodity prices firmed up. Besides, foreign investors too repatriated higher profits from their investments in India. The current account deficit — excess imports of goods and services — recorded a deficit of $1.7 billion or 0.2% of GDP in the third quarter after a surplus of $15.1 billion or 2.4% of GDP in the second quarter and $19.0 billion or 3.7% of GDP in the first quarter, preliminary data from RBI showed.

Big surge in Mumbai property registrations… Registration of property transactions in Mumbai, the country’s biggest and costliest realty market, continued to grow at a rapid pace for the seventh successive month in March, driven by recordlow home loan rates, discounts and reduction in stamp duty charges. The state government, however, has not extended its limited-period stamp duty reduction that was applicable until March-end. It has also decided not to increase the ready reckoner rates used for calculation of the stamp duty charges for any property deals.

RBI consulted bank treasury heads on taming rupee … RBI consulted top bank treasury heads recently to seek their inputs with the central bank’s intervention in the forward market having failed to check the rupee’s rise, multiple sources familiar with the matter told ET. banks suggested that the central bank intervene in the spot market instead but do so in conjunction with liquidity draining measures such as Special Deposit Schemes (SDS), Market Stabilisation Bonds (MSS) or even RBI-issued bonds, although the latter will require a legislative change.

Govt infuses Rs 14,500 cr in 4 PSBs… The government has infused Rs14,500 crore into four weak public sector banks by issuing them recapitalisation bonds for a matching amount. The investment will improve the capital adequacy of these banks and enable three of them to exit the lending restrictions they face from RBI. The four banks that have subscribed to the special government bonds in return for equity are Central Bank of India (Rs 4,800 crore), Indian Overseas Bank (Rs 4,100 crore), Bank of India (Rs 3,000 crore, which is not limited by the RBI) and Uco Bank (Rs 2,600 crore).



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