Nifty today: SGX Nifty down 5 points; here’s what changed for market while you were sleeping
Here’s the breaking down of the pre-market actions:
STATE OF THE MARKETS
SGX Nifty signals tepid start
Nifty futures on the Singapore Exchange traded 4 points, or 0.03 per cent, lower at 15,415 in signs that Dalal Street was headed for a tepid start on Friday.
Tech View: Nifty sets sight at 15,220
Nifty50 took out its immediate resistance at 15,100 level on Wednesday, but formed a small bearish candle with a long lower wick, suggesting intraday selling got bought into. Analysts said the index seems to have won a mini-battle, but is still indecisive and needs to take out the 15,220 level for the positive momentum to sustain.
Asian markets rise in early trade
Asian stocks rose on Friday, following firm overnight leads from Wall Street and Europe as a further retreat in bond yields eased concerns about rampant inflation, restoring appetite for battered tech stocks. Japan’s Nikkei 225 added 0.61 per cent, Hong Kong’s Hang Seng index rose 0.15 per cent and Korea’s Kospi added 1.40 per cent.
slips but stays near $70 a barrel
Brent crude prices eased on Friday but hovered near $70 a barrel as production cuts by major oil producers constrained supply, with optimism about a recovery in demand for the resource in the second half of the year also lending support. Brent crude futures for May slipped 17 cents, or 0.2 per cent, to $69.46 a barrel.
US stocks settled at record high levels
The S&P 500 and the Dow closed at all-time highs on Thursday as worries about rising inflation subsided, while a bigger-than-expected fall in weekly jobless claims. The Dow Jones Industrial Average rose 188.57 points, or 0.58 per cent, to 32,485.59, the S&P500 index gained 40.53 points, or 1.04 per cent, to 3,939.34 and the Nasdaq Composite added 329.84 points, or 2.52 per cent, to 13,398.67.
Anupam Rasayan IPO to kick off today
Anupam Rasayan’s Rs 760 crore IPO will open for subscription on Friday. The issue by the specialty chemicals company comprises entirely fresh issuance of shares, and is being sold in the Rs 553-555 price band. At the upper limit of the price band, the scrip is asking a PE of 95.2 times trailing 12-month basis, on restated EPS of Rs 5.80. This is significantly higher than the peer average of 33 times. Some analysts said the asking valuations exceed growth prospects.
DIIs buy Rs 448 crore worth stocks
Net-net, foreign portfolio investors (FPIs) were buyers of domestic stocks to the tune of Rs 15.69 crore, data available with NSE suggested. DIIs were net buyers to the tune of Rs 447.67 crore, data suggests.
MONEY MARKETS
Rupee: The Indian rupee recovered from the day’s lows to end higher by a marginal 2 paise at 72.91 against the American currency on Wednesday, tracking positive investor sentiment globally in the wake of easing bond yields.
10-year bonds: India 10-year bond yield rose 0.66 per cent to 6.24 after trading in 6.20-6.27 range.
Call rates: The overnight call money rate weighted average stood at 3.17 per cent, according to RBI data. It moved in a range of 1.90-3.50 per cent.
MACROS
ECB signals faster money-printing to keep lid on yields
The European Central Bank said Thursday it would significantly ramp up the pace of its pandemic emergency bond buys, in a bid to soothe market jitters about a rise in government borrowing costs. The move is aimed at preventing an “undesirable” early end to cheap money when the eurozone economy still needs ample support to recover from the pandemic, ECB chief Christine Lagarde said.
Moody’s says vaccines no silver bullet… Covid-19 vaccines are unlikely to be a silver bullet for the global economy as uncertainty over virus mutations prevail and the slow progress of vaccination drives in certain regions could give rise to pockets of localised outbreaks, according to Moody’s Investors Service. Gross domestic product growth will depend on how countries manage the virus through vaccination programmes and other measures, but the longer-term economic impact will depend on how many jobs are lost before activity can resume across sectors, Moody’s said.
Tax man goes after benami deals… As various government departments start sharing data with each other, the income tax department has started going after benami properties, or real estate assets bought under pseudo or fake names. In what seems to be a trigger following a data-analytics-based investigation, the tax department has started issuing notices to owners of many such “benami” properties.
Borrowing cost for IPO shoots up… Investors’ cost of borrowing to punt on IPOs is set to spike as the rush of issues next week could push up demand for funding. Five IPOs including Anupam Rasayan, Laxmi Organic, Craftsman Automation, Kalyan Jewellers and Suryoday Small Finance Bank, which will raise a total of Rs 4,500 crore, will open for subscription in the next one week. Brokers say the increase in funding costs has resulted in grey market premiums for these upcoming issues shrinking. Brokers say the interest rate to borrow for investing in these IPOs could go up at least by 200 basis points from the current 7-8% levels.
Debt fund investors stare at losses… Investors in debt mutual funds holding perpetual bonds are staring at losses with the new valuation norm for the instrument expected to spark a sharp selloff on Friday. Money managers said accelerated redemptions in debt schemes could trigger a crisis as mutual funds will be forced to dump such securities, causing yields to spike and making it costlier for banks to borrow funds from the market. Experienced investors could jump into the fray to lap up beaten down bonds amid the chaos, they said. Sebi on Wednesday asked mutual funds to value perpetual bonds as 100-year instruments from April.
MFs trim holdings in blue chips… Mutual funds continued to trim their holdings in various blue-chip stocks in February as continued redemption pressures prompted money managers to offload liquid stocks. Edelweiss Alternative Research said in a note that mutual funds sold Rs 2,800 crore worth of shares of Bharti Airtel, Rs 1,700 crore worth of HDFC Bank, Rs 1,500 crore worth of RIL and offloaded Rs 1,400 crore worth of HDFC shares. They bought shares of NTPC and IndusInd Bank to the tune of Rs 700 crore each; while in L&T, they were buyers worth Rs 650 crore during the month.
SPACs coming to India soon…. Two government regulators — Sebi and its counterpart for Gujarat’s GIFT City, the International Financial Services Centres Authority (IFSCA) — are on track to facilitate launching of Special Purpose Acquisition Companies (SPACs) in India. SPACs are formed with a definite purpose of acquiring one or more companies but, at the time of formation, the entities do not disclose the name(s) of the target. SPAC-like structures have been in existence for years now, floated mainly by private equity players. But of late, they have gained popularity in the developed markets. These structures are also called ‘blank cheque companies’ since investors, other than those setting these up, usually do not know for which acquisition target or the assets of a company they are putting in money till those are bid for by the SPAC.
Cement prices firm up…. The Centre’s infrastructure push, a pick-up in real estate demand and industry consolidation have helped drive up pan-India cement prices by around 4% in the first week of March. Prices climbed around 18% in the south and11% in the west. “Companies are more concerned about incremental volumes. So, the announcement of large price hikes in the coming days could be just to push more volume at existing rates,” said Binod Modi, research analyst, Reliance Securities. Demand remained firm as continued traction in infrastructure building, affordable housing and rural consumption drove volumes, Modi added.
Digital currencies are here to stay… Digital currencies and tokenisation of assets are a reality and may be a dominant factor in the future, but that doesn’t necessarily mean that Bitcoin could replace fiat currency as a medium of exchange, said Piyush Gupta, CEO of DBS. “We launched the first bank-sponsored digital exchange in December, which lets you tokenise assets and securities,” said Gupta. “By our action we are creating capabilities for crypto, digital currencies and tokenisation for the future. But Bitcoin as a replacement for money is still challenging. Money is a medium of exchange, a unit of account and store of value,’’ he said.
