ETMarkets Morning Podcast: Big plunge in lira leaves markets nervous

>> Proprietary traders up bearish bets on D-Street
>> Powell reiterates Fed’s all-in approach
>> Indian bonds start quoting negative yield
AND
>> A plunge in Turkish lira leaves markets nervous

Hi there. Welcome to ETMarkets Morning, the show about money, business and markets. I am Sandeep Singh.

Let’s start with a quick glance on the state of the markets.

Dalal Street looked headed for some further selloff on Monday as other Asian markets treaded water and Nifty futures traded flat on the Singapore Exchange. The most buzzing news was a 15% plunge in the Turkish lira in early trade after President Recep Tayyip Erdogan removed the central bank governor following a sharper-than-expected hike in interest rates. Among other currencies, the dollar advanced against most Group-of-10 currencies. Crude oil price fell after its worst week since October. And in bullion, gold fell nearly 1% to trade at $1,733.91 an ounce in international markets.

That said, here’s what else is making news.

US central bank Chairman Jerome Powell has reiterated his commitment to an “all-in” approach to the US economic recovery. In a Wall Street Journal editorial, he said “the US recovery is far from complete and the Fed will continue to provide the economy with the support that it needs for as long as it takes. “I truly believe that we will emerge from this crisis stronger and better, as we have done so often before,” he wrote.

But markets are still wondering how is the US central bank going to live with higher inflation. Some official data this week are widely expected to confirm that inflation is trending higher.

Dalal Street is seeing red, literally! Proprietary traders, who outplayed FIIs and HNIs last week, by making most of the 6% Nifty fall, raised their bearish bets on the futures of Nifty and Bank Nifty, even as the indices recovered sharply from the lows in the closing hours of trade on Friday, raising a red flag to the bulls. Categorised as “pro” by NSE, they comprise brokers who run their own trading books as distinct from those who trade on behalf of the clients.

Technical analysts expect Nifty to largely move in the 14,450-14,950 range this week after posting its first weekly loss in three weeks. They expect selling to resume once Nifty hits the 15,200 mark. The index fell 1.9% last week, underperforming all regional peers except the Philippines. Volatility is expected to be high amid a surge in Covid cases.

In good news, foreign portfolio investors have pumped in a record $36 billion into equities so far this financial year up to March 10, which is the highest since FY13, latest data from RBI showed. Net foreign direct investment inflows jumped to $44 billion till end January, up from $36.3 billion a year ago, driven by the massive inflows in November and December, with the last month of the year getting a record $6.3 billion.

The IT industry seems to be having its day in the sun. With the large consulting and IT services firm Accenture reporting strong deal bookings. Accenture last week reported significant growth in outsourcing and consulting deals, with total new bookings worth $16 billion in the quarter to February. Analysts say this could mean a strong deal pipeline for those Indian IT services companies which have built capabilities in digital technology-led services.

LASTLY…

A negative yield was quoted for the first time ever on India’s sovereign bond trading platform on Friday, triggering intense speculation about the motive. The 6.17% bond maturing in 2021 was offered at a negative yield of around 1.5%, traders who saw the quote on the Clearing Corporation of India’s Negotiated Dealing System — Order Matching platform said. They asked not to be identified as they are not authorised to speak to the media. While there’s a total $13.30 trillion of negative-yielding assets in the world, the phenomenon had been unheard of in an emerging market like India where the benchmark 10-year note trades at above 6%.

NOW Before I go, here is a look at some of the stocks buzzing this morning…

Future Group on Saturday approached the Delhi high court to challenge an earlier order, which upheld the Singapore-based emergency arbitrator’s order to put on hold its Rs 24,713 crore asset sale to RIL.

Vodafone Idea (Vi) is said to have assured bondholders that all repayments and interest payments that fall due later this year will be made promptly and that may have helped the company’s bonds overcome a dry secondary market spell.

Casual dining restaurant chain Barbeque Nation Hospitality’s IPO opens on Wednesday with an issue price of Rs 498-500 per share. It closes on Friday.

Voltas is expecting strong double-digit growth in sales of air conditioners this year on account of “buoyant summer” and hybrid working model adopted by people in the backdrop of the Covid pandemic, a top company official has said.

PSU steel maker RINL will start commercial production of forged wheels at its Rae Bareli unit in Uttar Pradesh this month, a company official has said.

Do also check out over two dozen stock recommendations for today’s trade from top analysts on ETMarkets.com.

That’s it for now. Stay put with us for all the market news through the day. Happy investing!