Domestic stocks are likely to open on a cautious note, ahead of the two-day US Fed meeting starting later in the day. There could be some concerns over inflation that breached RBI’s comfort zone of 6 per cent in May. The dollar hit a nearly one-month high, while Asian stock markets are trading largely mixed. Here’s breaking down the pre-market actions:
STATE OF THE MARKETS
SGX Nifty signals a flat start
Nifty futures on Singapore Exchange traded 3 points, or 0.02 per cent, lower at 15,833, signaling that Dalal Street was headed for a flat start on Tuesday.
- Tech View: The index on Monday formed a small bearish candle with a long lower wick, suggesting that the intraday fall got bought into.
- India VIX: The fear gauge jumped 3.95 per cent to 14.72 level on Monday over its previous close at 14.10 on Friday.
Asian markets mixed in early trade
Asian markets were largely mixed on Tuesday morning even as the US stocks hit record highs in overnight trade. All eyes were on the US Fed’s two-day policy meeting starting later in the day.
- Japan’s Nikkei climbed 0.78%
- Korea’s Kospi edges 0.08% higher
- Australia’s ASX 200 added 1%
- Hong Kong’s Hang Seng fell 1.16%
- China’s Shanghai Composite shed 1.1%
US shares ended mostly higher
Technology companies helped lift stocks higher on Wall Street, nudging the S&P500 index to its third straight all-time high, even as other parts of the market faltered.
- S&P500 index rose 0.8% to 4,255.15
- Dow Jones fell 0.02% to 34,393.75
- Nasdaq added 0.7% to 14,174.14
Dollar near one-month high
The dollar hovered below a one-month high compared with major peers on Tuesday ahead of a much-anticipated Federal Reserve meeting that could signal a change in the outlook for US monetary policy.
- Dollar index flat at 90.517
- Euro little changed at $1.21185
- Pound strengthens to $1.41
- Yen flat at110.075 per dollar
- Yuan at 6.41 against the greenback
Q4 earnings today
Jubilant FoodWorks, Power Finance Corporation, Whirlpool of India, LIC Housing, Easy Trip Planners and Lemon Tree among companies that will announce their March quarter earnings today.
FPIs sell shares worth Rs 504 cr
Net-net, foreign portfolio investors (FPIs) were net sellers of domestic stocks to the tune of Rs 503.51 crore, data available with NSE suggested. DIIs were net buyers to the tune of Rs 544.26 crore, data suggests.
Rupee: The Indian rupee ended 22 paise lower at 73.29 against the US dollar on Monday, sliding for the fifth straight session amid rising crude oil prices.
10-year bonds: India 10-year bond yield fell 0.03 per cent to 6.00 after trading in 6.00 – 6.01 range.
DATA/EVENTS TO WATCH
- India Balance of Trade Final May (05:50 pm)
- India Exports/Imports Final May (05:50 pm)
- Australia RBA Meeting Minutes (07:00 am)
- UK Employment Change March (11:30 am)
- UK Average Earnings incl. Bonus April (11:30 am)
- UK Unemployment Rate April (11:30 am)
- Euro Area Balance of Trade April (02:30 pm)
- BoE Gov Bailey Speech (05:45 pm)
- US Retail Sales MoM May (06:00 pm)
- US Core PPI MoM May (06:00 pm)
- US Industrial Production YoY May (06:45 pm)
- US NAHB Housing Market Index June (07:30 pm)
Retail inflation hits 6-month high
Retail inflation jumped to a six-month high in May on the back of pricey food and fuel, while wholesale inflation during the month hit a fresh high of 12.9%, signalling the strengthening of price pressures in an economy battling to get growth back against the backdrop of a second Covid-19 surge. Data released by the National Statistical Office on Monday showed inflation as measured by the consumer price index rose to 6.3% in May, higher than the 4.2% recorded in April.
SPAC by Indians raises $170 in US IPO
Private equity veteran Rohan Ajila and Manipal Technologies chairman Gautham Pai’s consumer sector focused SPAC has raised $170 million in an IPO in the US. This probably marks the first fund raise by an India-related SPAC. The SPAC, called Global Consumer Acquisition Corp, is listed on Nasdaq. SPACs, also known as blank-cheque companies, are shell companies that launch IPOs with a promise to invest in or acquire a company within a set timeline – normally 18 to 24 months.
MS says corporate sentiment optimistic
Corporate sentiment is cautiously optimistic for the period going ahead with the caveat of a potential third wave of the Covid-19 pandemic, said Morgan Stanley. The brokerage in a note on Monday said that the impact of the second wave of the Covid-19 pandemic on business has been less than the first wave that was seen in 2020. Demand has remained relatively intact in some sectors, said the international brokerage firm.
Sebi readies rules to allow listing of SPACs
Capital market regulator Sebi plans to build a dedicated framework on Special Purpose Acquisition Companies to allow such ‘non-operational’ entities to also raise funds in initial share sales and list locally. At present, Sebi allows listing of only ‘operating’ companies. To allow SPACs in India, Sebi has to either introduce a separate law or amend current regulations to allow listing of ‘non-operating’ or ‘investment’ companies, industry officials aware of the development told ET.
MF SIP flows hit record
The assets under management of funds linked to the systematic investment plans reached a record Rs 4.7 lakh crore at the end of May 2021 following a consistent inflow and capital appreciation amid a sustained stock market rally. The SIP equity funds have delivered 26-56% returns over the past year resulting in an expansion of 1.7 times in their aggregate AUM during the period
Banks, borrowers in tug of war over SC order
Banks and borrowers are getting into a tug of war over personal guarantees after the Supreme Court allowed invocation of personal guarantees against defaulting promoters. While lenders are asking promoters to furnish a negative lien letter on assets owned by them, promoters are pushing back as their personal assets are sure to go under the hammer in the event of a default, despite the limited liability nature of the companies.
DHFL panel to decide on fund for small investors
The NCLT, which approved Piramal Group’s resolution plan for DHFL last week, has placed several conditions in its order as it now emerges. The order has given the committee of creditors of DHFL two weeks to consider a redistribution of funds that they will receive from the Piramal Group to small investors. The court has also appointed Ashok Kacker, former executive director of Sebi and ex-director of Indiabulls Asset Management, as an observer-cum-permanent invitee in a seven-member group that will have management and control of DHFL until the implementation date.