SGX Nifty up 70 points; here’s what changed for market while you were sleeping

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SGX Nifty up 70 points; here's what changed for market while you were sleeping


Investors around the world are convinced that a bigger stimulus in the US is on the cards after the Democrats won control of the Senate. These hopes should spur sentiment on Dalal Street on Thursday. Here’s breaking down the pre-market actions:

STATE OF THE MARKETS

SGX Nifty signals positive start

Nifty futures on the Singapore Exchange traded 72 points, or 0.51 per cent, higher at 14,252.50, in signs that Dalal Street was headed for a positive start on Thursday.

Tech View: Nifty bulls are still strong

Nifty50 on Wednesday fell, but the daily technical chart suggested that the formation of higher highs on the index was intact for the 10th session. Analysts said the index has strong support in the 14,000-13,950 range. Unless this range is breached, Nifty outlook will remain positive, they said.

Asian markets rise in early trade

Asian stocks perked up on Thursday as investors remained confident that violence in Washington would not disrupt a legitimate transition to a new presidency or derail political support for a US economic recovery. Investors remained defiantly bullish in early Asian trade with S&P500 futures up 0.3 per cent, Japan’s Nikkei 225 rising 1.24 per cent and the S&P/ASX 200 1.25 per cent higher.

Dollar nears 3-year low on stimulus prospects

The dollar languished near its lowest level in nearly three years on Thursday after Democrats won control of the US Senate, clearing the way for a larger fiscal stimulus under President-elect Joe Biden. Analysts generally assume a Democrat-controlled Senate would be a net positive for economic growth globally. The dollar index was little changed at 89.321 in early Asian trade on Thursday, after dipping to its lowest since March 2018 at 89.206 overnight.

Oil steady after US Capitol drama

Oil prices were steady on Thursday after supporters of President Donald Trump stormed the US Capitol, with investors focusing on the likelihood of tighter supplies after Saudi Arabia unilaterally agreed to cut output. Brent crude was up 8 cents at $54.38 a barrel, after gaining 1.3 per cent overnight. US West Texas Intermediate (WTI) gained 11 cents to $50.74, having slipped earlier in the Asian session. The contract rose 1.4 per cent on Wednesday.

US stocks settled higher

Stocks rose on Wall Street Wednesday on expectations that Washington will deliver more stimulus for the economy, though some of the gains faded by late afternoon as political unrest gripped the nation’s capital. On Wednesday, the S&P500 rose 21.28 points, or 0.6 per cent, to 3,748.14. The Dow Jones gained 437.80 points, or 1.4 per cent, to 30,829.40. The Nasdaq Composite index fell 78.17 points, or 0.6 per cent, to 12,740.79.

FIIs sell Rs 484 cr worth of stocks

Net-net, foreign portfolio investors (FPIs) were sellers of domestic stocks to the tune of Rs 483.64 crore, data available with NSE suggested. DIIs were net sellers to the tune of Rs 380.41 crore, data suggests.

MONEY MARKETS

Rupee: The rupee appreciated by 6 paise to close at 73.11 against the US dollar on Wednesday, supported by sustained foreign fund inflows and weaker American currency against key rivals.

10-year bonds: India 10-year bond yield fell 5.89 per cent to 5.85 after trading in 5.86-5.91 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

  • US Total Vehicle Sales Dec (05:30 am)
  • Australia Balance of Trade Nov (06:00 am)
  • China Foreign Exchange Reserves Dec (01:30 pm)
  • Euro Area Construction PMI Dec (02:00 pm)
  • ECB Economic Bulletin (02:30 pm)
  • UK Construction PMI Dec (03:00 pm)
  • Euro Area Consumer Confidence Final Dec (03:30 pm)
  • Euro Area Core Inflation Rate YoY Flash Dec (03:30 pm)
  • US Challenger Job Cuts Dec (06:00 pm)
  • US Balance of Trade Nov (07:00 pm)
  • US Jobless Claims 4-week Average 26/Dec (07:00 pm)
  • US Initial Jobless Claims 02/Jan (07:00 pm)

MACROS

Fed to keep buying bonds… US Fed officials unanimously backed holding the pace of asset purchases steady when they met last month, with some open to “future adjustments” if needed. “All participants judged that it would be appropriate to continue those purchases at least at the current pace, and nearly all favored maintaining the current composition of purchases,” according to minutes of their Dec. 15-16 meeting published on Wednesday. “A couple of participants indicated that they were open to weighting purchases of Treasury securities toward longer maturities.”

Services activity slowest in 3 months… India’s services activity slowed to a three-month low in December and staff hiring came to a halt on liquidity concerns, labour shortages and subdued demand as business optimism faded, a private survey showed on Wednesday. The IHS Markit India Services Business Activity Index dropped to 52.3 in December from 53.7 in November.

Petrol price near all-time high… Petrol prices in India have inched closer to their all-time high following an increase of 26 paise announced on Wednesday, amid a jump in crude oil prices. Petrol in Delhi costs Rs 83.97, marginally below the all-time high of Rs 84 in October 2018. Diesel price has been hiked by 25 paise to Rs 74.12

WTO red-flags India’s export curbs… The World Trade Organisation said on Wednesday that India’s export restrictions and bans seem to contradict its goal to increase its share of global exports to 3.5% from 2% in 2015. The South Asian nation continued to use trade policy to meet other objectives, changing policies constantly and diminishing the predictability of the regime, the global body said in the seventh Trade Policy Review of India.

India Inc ready with big hiring plans… New Year. New Hiring plans across India Inc. With vaccine rollout imminent, companies across sectors and regions intend to create jobs briskly, two surveys on hiring intents shared exclusively with ET show. And tier 2, 3 cities will be whitecollar job market hotspots. According to a Teamlease survey, for January-March, 27% of companies show hiring intent, up from 21% in October-December, and an average 18% in the two quarters of April-September. The survey covered 815 small, medium and large companies across 21 sectors

Democrats closer to control Congress… Democrats won one US Senate race in Georgia and led in another, moving closer to a surprise sweep in a former Republican stronghold that would give them control of Congress and the power to advance President-elect Joe Biden’s policy goals. A final outcome is not expected until later on Wednesday.

India unveils fresh spectrum sale… India’s first spectrum auction in over four years will kick off from March 1, setting the stage for Reliance Jio, Bharti Airtel and Vodafone Idea (Vi) to bid for airwaves worth Rs 3.92 lakh crore at base price. Industry analysts see a muted response, given the straitened condition of the telecom sector, and expect the government to generate only Rs 40,000-50,000 crore from the sale. Successful bidders will have to pay 25-50% of the amount upfront, depending on the band.

Top borrowers line up bond sales… At least four local borrowers — Power Finance Corp, Rural Electrification Corp (REC), Shriram Transport Finance and SBI — are seeking to collectively raise up to $2.5 billion in overseas bond sales after Exim Bank’s spectacular debut for the year earlier this week. Both Shriram and SBI launched their issues on Wednesday. The proceeds could be used to expand credit.

Road cleared for more bourses... Sebi on Wednesday proposed a new framework for ownership of market infrastructure institutions to facilitate new entrants to set up stock exchanges and depositories. In a discussion paper, the regulator has suggested a liberalised framework in the landscape of market infrastructure institutions by allowing higher shareholding at the inception stage and prescribing a dilution in the ownership over a period of time. New norms pertaining to tenure of MD and CEO of MIIs — stock exchanges, depositories and clearing corporations — have also been proposed

Bad bank idea back on table… Ahead of the budget, the government is again considering the idea of bad banks amid concerns that nonperforming loans may spike as Covid-19 assistance to businesses comes to an end. The finance ministry has reached out to banks and other stakeholders to seek their views on the likely framework, people aware of deliberations told ET. A bad bank is an entity that purchases nonperforming assets (NPAs) from banks at market price, clearing the balance sheet of lenders and improving their fundraising capabilities.





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