Domestic stocks looked set for a major gap-down start to the week, following Jim Bullard’s hawkish comments that suggested the first Fed interest rate hike could come as early as 2022 end. Asian markets cracked up to 3 per cent today, tracking Wall Street losses on Friday. The dollar continued to strengthen, raising fears of EM outflows. Here’s breaking down the pre-market actions:
STATE OF THE MARKETS
SGX Nifty signals a gap-down start
Nifty futures on Singapore Exchange traded 175.5 points, or 1.11 per cent, lower at 15,574.50, signaling that Dalal Street was headed for a gap-down start on Monday.
- Tech View: Nifty50 on Friday declined for the third straight session. It formed a ‘Hammer ‘candle on the daily chart and an indecisive ‘Doji’ on the weekly scale.
- India VIX: The fear gauge jumped 3 per cent to 14.80 level on Friday over its close at 15.29 on Thursday.
Asian markets plunge in early trade
Asian markets tumbled at open, tracking Friday’s losses on Wall Street, as investors digested Federal Reserve messaging on more restrictive monetary policy. MSCI’s broadest index of Asia-Pacific shares outside Japan was up by 1.03 per cent.
- Japan’s Nikkei plunged 3.33%
- Korea’s Kospi tanked 0.86%
- Australia’s ASX 200 shed 1.86%
- China’s Shanghai Composite fell 0.28%
- Hong Kong’s Hang Seng declined 1.32%
US shares settled lower on Friday
US stocks ended sharply lower on Friday, with the Dow and S&P500 index posting their worst weekly performances in months, after comments from Federal Reserve official James Bullard that the US central bank might raise interest rates sooner than previously expected spooked investors.
- Dow Jones tanked 1.58% to 33,290.08
- S&P 500 declined 1.31% to 4,166.45
- Nasdaq shed 0.92% to 14,030.38
Dollar nears multi-month high
The dollar held near multi-month peaks against other major currencies on Monday, after the US Federal Reserve surprised markets last week by signalling it would raise interest rates and end emergency bond-buying sooner than expected.
- Dollar Index zoomed to 92.232
- Euro lowered to $1.1872
- Pound fell of $1.3809
- Yen ticked up to 110.185 per dollar
- Yuan depreciates to 6.449 against the greenback
Crude oil prices edge higher
Oil prices nudged up on Monday, underpinned by strong demand during the summer driving season and a pause in talks to revive the Iran nuclear deal that could indicate a delay in resumption of supplies from the OPEC producer. Brent crude futures for August gained 30 cents, or 0.4 per cent, to $73.81 a barrel, while US West Texas Intermediate (WTI) crude for July was at $71.96 a barrel, up 32 cents, or 0.5 per cent.
Q4 earnings today
Info Edge (India), Oil India, Bharat Dynamics, TCNS Clothing, Jaiprakash Associates,VST Tillers Tractors, MM Holdings, Pokarna, HBL Power Systems, SP Apparels, Rico Auto Industries, Pearl Global Industries and Rana Sugars are among the companies that will announce their March quarter results today.
FPIs buy shares worth Rs 2,680 cr
Net-net, foreign portfolio investors (FPIs) turned buyers of domestic stocks to the tune of Rs 2,680.57 crore, data available with NSE suggested. DIIs, turned buyers to the tune of Rs 446.2 crore, data suggests. FPIs have pumped in Rs 13,667 crore into domestic equities so far in June.
Rupee: The rupee on Friday broke its eight-session losing streak to end 22 paise higher at 73.86 against the US dollar, taking cues from stronger Asian currencies and lower crude oil prices.
10-year bonds: India 10-year bond yield eased 0.22 per cent to 6.01 after trading in 6.00 – 6.06 range.
Call rate: The overnight call money rate weighted average stood at 3.15 per cent, according to RBI data. It moved in a range of 1.90-3.45 per cent.
DATA/EVENTS TO WATCH
- Q4 Earning: OIL | InfoEdge | JP Associates | Aban Offshore
- China Loan Prime Rate 1 Year (07:00 am)
- China Loan Prime Rate 5 Year June (07:00 am)
- US Chicago Fed National Activity Index May (06:00 pm)
- ECB President Lagarde Speech (07:45 pm)
- US 3-Month Bill Auction (09:00 pm)
Spike in loan-loss provisions at 28 banks
The loan loss provisioning for a sample of 28 banks shot up by 20.5% year-on-year in the March 2021 quarter to Rs 65,967 crore after falling in each of the previous four quarters. This was on expected lines as the RBI’s several schemes to defer the recognition of actual NPAs ended in December thereby prompting banks to account for slippages in the March quarter. On a sequential basis, the sample’s NPA provisioning jumped 139% in the last quarter of FY21 from Rs 27,580.7 crore in the third quarter.
Carlyle may challenge Sebi order
The Rs 4,000 crore Carlyle deal with PNB Housing Finance could be in a regulatory fix as the mortgage lender is likely to challenge a Securities & Exchange Board of India order that required an independent valuation of the business before the company sought shareholder approval for the transaction. Carlyle and Salisbury Investments, which are set to be the new promoters of the company, are also expected to support the PNB Housing plans to challenge the regulatory order.
DHFL money for funds, small investors
Lenders To DHFL will vote on a proposal to distribute up to Rs 1,853 crore more to smaller investors and retirement funds in the bankrupt housing finance company this week. This complies with the NCLT’s order that asked lenders to consider giving a higher amount to smaller investors. Between what was approved by the committee of creditors earlier and the proposed distribution mechanism, lenders will have to shell out Rs 1,853 crore, which is around 5.4% of the resolution plan value.
Aramco Chairman may join RIL board
Saudi Aramco chairman and governor of the Kingdom’s wealth fund Public Investment Fund (PIF), YasirAl-Rumayyan, may be inducted on the board of Reliance Industries, a precursor to a $15-billion deal, reports said. An announcement of Al-Rumayyan’s induction on the RIL board or the board of the newly carved oil-to-chemical (O2C) unit may come as early as at RIL’s AGM on June 24. Both RIL and Saudi Aramco did not reply to emails sent for comments. An email sent to PIF too remained unanswered.