ETMarkets Morning Podcast: Fear, uncertainty, doubts haunt crypto industry

Dalal Street flooded with hot money, raising taper risk
Investors rush to grab BPCL stock ahead of dividend announcement
Crypto investors nervous; industry asks them not to sell in panic
Financial planners see prospects in yellow metal, recommend sovereign gold bonds

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 a solid start. Nifty futures traded with a gain of 55 points on Singapore Exchange, signalling a positive start ahead. Stocks in other Asian markets climbed early Friday, taking cues from Wall Street, where tech stocks led a rebound overnight. Dow rose half a per cent; S&P500 1%, and the Nasdaq 1.77%.

In currencies, the dollar held a decline on course to end the week with a deep cut.
Crude oil trimmed a drop but remained around the lowest in nearly a month.
Gold is around the highest price in more than four months, gaining traction as inflation hedge.

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

Hot money dominated the flow of overseas funds to India last fiscal raising the risk of heightened volatility in financial markets whenever the ‘sudden stop’ comes with the Federal Reserve hints of tapering its bond purchases. The combined flow through FPI and FDI rose 80% last fiscal year, taking India’s forex reserves to a new high. RBI data show almost the entire surge in inflows was due to portfolio flows with durable FDI flows remaining flat.

Cryptocurrency markets are stabilizing after a $500 billion Bitcoin wipeout snuffed out a slew of speculative excesses that had been building for months. Signals across the virtual-currency complex show leveraged positions are getting flushed out while dip-buyers are emerging — helping fuel a return toward $40,000 for the world’s biggest token. As the dust settles following the Wednesday crash, Bybt data shows liquidations have totaled roughly $10 billion since Wednesday.

Fear, uncertainty and doubt took over Indian investors in crypto assets after Bitcoin, the world’s most valuable and best-known crypto token, posted its biggest single day fall in nearly a year on Wednesday. Domestic crypto exchanges went into a “downtime” on Wednesday, unable to handle heightened trading volumes as people lined to buy the dip and others tried to sell fearing further downside. Crypto entrepreneurs are urging investors not to panic-sell assets like Bitcoin and ether after prices crashed over 30% this week.

Investors lapped up shares of state-owned BPCL on Thursday after the company said it would decide on a final dividend on May 26. Analysts said expectations are high that the oil marketer and refiner, which is high on government’s privatisation list, could announce a large dividend as the company is sitting on cash it received from the sale of its assets.

And lastly, financial planners see prospects in gold and are advising investors to stagger their investments in gold through the six tranches of sovereign gold bonds between May and September. Gold prices have been flat over the last one year but analysts expect surge in inflation, negative real yields on bonds and a depreciating rupee due to the second wave of Covid-19 to drive up the value of the precious metal over the next year or so.

Now before I go, here is a look at some of the stocks buzzing this morning.

Mindtree said it is buying NxT Digital Business, the cloud-based IoT and AI platform of parent firm L&T, for about Rs 200 crore to help it penetrate the industrial automation sector.

Union Bank of India on Thursday completed a qualified institutional placement, raising Rs 1,447 crore.

IDBI Bank on Thursday said that it has appointed executive director P Sitaram as CFO on RBI’s directive to appoint qualified CAs for the post.

Investor Ashish Kacholia on Thursday raised his stake in Garware Hi-Tech Films, purchasing1.28 lakh shares of the company at an average price of Rs 755 per share.

The government has raised about Rs 4,000 crore from sale of 1.95% stake in Axis Bank held through Specified Undertaking of Unit Trust of India, Department of Investment and Public Asset Management Secretary Tuhin Kanta Pandey said on Thursday.

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!