A strong surge in Covid cases past the 4 lakh daily mark after a drop for three straight days and persistent foreign outflows are not a positive sign for Dalal Street. But RBI’s reassurance on policy support and a positive start to Asian markets may lift sentiment. Technical charts suggest choppy trading ahead.
Here’s breaking down the pre-market actions:
STATE OF THE MARKETS
SGX Nifty signals positive start
Nifty futures on the Singapore Exchange traded 31 points higher at 14,724.50 in signs that Dalal Street was headed for a positive start on Thursday.
Tech View: Nifty charts suggest choppy trade ahead
Nifty50 on Wednesday formed an Inside Bar pattern and also what looked like a Harami Cross on the daily candle, indicating a tug of war between the bulls and the bears. Nifty50 can remain choppy inside the 14,461-14723 range. A close above 14,723 level can be considered as the initial sign of strength, which can expand the bounce towards 14,900 level.
Asian markets rise in early trade
China’s Shanghai Composite index rose 0.26 per cent to 3,455.65. South Korea’s Kospi added 0.66 per cent to 3,168.85 while Hong Kong’s Hang Seng jumped 1.04 per cent to 28,720.37. Taiwan’s TWSE index advanced 1.24 per cent to 17,052.29. Data released overnight showed the US services sector added hundreds of thousands of jobs last month. prices fall as US gasoline stocks rise
Oil prices declined on Thursday as gasoline inventories in the United States, the world’s largest oil consumer, rose for a fifth consecutive week although a draw in crude stockpiles helped to underpin prices. Brent crude oil futures fell by 16 cents, or 0.2 per cent, to $68.80 barrel, and US WTI crude futures dropped by 20 cents, or 0.3 per cent, to $65.43 a barrel.
Dow ends at record high, Nasdaq falls
The Dow Jones Industrial Average index ended at a record high on Wednesday, driven higher by energy and other economically sensitive sectors, while the Nasdaq closed in red as megacap growth stocks slipped. The Dow closed at 34,230.34, up by 0.29 per cent, while the S&P500 index gained 2.93 points, or 0.07 per cent, to 4,167.59. The Nasdaq Composite ended 51.08 points, or 0.37 per cent, lower at 13,582.43.
Q4 earnings today
Adani Transmission, Tata Consumer, Hero Motocorp: Adani Transmission, Tata Consumer, Hero Motocorp, Adani Power and Coforge are among companies that will announce their March quarter results today. IIFL Finance, Sundaram Fasteners, Procter & Gamble Health, CreditAccess Grameen, Bombay Burmah Trading Company, Hikal, Blue Star, Raymond and Praj Industries will also announce their quarterly results today.
FPIs sell Rs 1,111 crore worth stocks
Net-net, foreign portfolio investors (FPIs) were sellers of domestic stocks to the tune of Rs 1110.5 crore, data available with NSE suggested. DIIs, too, were net sellers to the tune of Rs 240.61 crore, data suggests.
Rupee: The rupee snapped its two-day winning streak and closed 6 paise lower at 73.91 against the US currency on Wednesday due to forex outflows and a stronger dollar in overseas markets.
10-year bonds: India 10-year bond yield fell 0.62 per cent to 5.98 after trading in 6.00-5.97 range.
Call rates: The overnight call money rate weighted average stood at 3.19 per cent, according to RBI data. It moved in a range of 1.90-3.50 per cent.
The DAY PLANNER
Q4 Earnings: Adani Power I Adani Green I Blue Star I Century Textiles I Hero MotoCorp I Hikal I ICRA I IIFL I Tata Consumers
BoJ Monetary Policy Meeting Minutes (05:20 am)
Euro Area Construction PMI April (01:00 pm)
UK Markit/CIPS UK Services PMI Final April (02:00 pm)
UK Markit/CIPS Composite PMI Final April (02:00 pm)
UK BoE Interest Rate Decision (04:30 pm)
UK BoE Quantitative Easing (04:30 pm)
UK MPC Meeting Minutes (04:30 pm)
US Jobless Claims 4-week Average May /01 (06:00 pm)
US Initial Jobless Claims 01/May (06:00 pm)
S&P warns Covid may derail India growth… The second Covid-19 wave may derail India’s budding recovery, global rating agency S&P said on Wednesday, warning that the surge may peak only by late June and could knock off up to 2.8 percentage points from GDP growth in FY22. In its latest update, S&P Global Ratings has provided two downside scenarios for the economy — severe and moderate.
Services activity slowed in April… India’s services activity slowed to a three-month low in April amid an intense second wave of the Covid-19 pandemic even as sentiment towards growth prospects faded, a private survey showed Wednesday. The India Services Business Activity index declined to 54 in April from 54.6 in March. A reading above 50 indicates expansion while a sub-50 figure shows contraction.
Big Covid hit on FMCG sales … Sales of daily groceries, essentials, electronics and automobiles declined sharply in April compared with last month, indicating faltering demand amid surging Covid infection cases and ensuing restrictions. The FMCG market shrank 16%, according to Bizom, which transacts with 7.5 million retail stores. Sales of refrigerators, air-conditioners, televisions and washing machines fell about 65%, as per estimates by the Consumer Electronics and Appliances Manufacturers Association.
5G auctions put off till Q1CY22… India’s 5G auctions are likely to be pushed to the first quarter of 2022 at the earliest, with the Department of Telecommunications currently preoccupied with ensuring network stability in the midst of the pandemic and critical decisions awaited on spectrum availability and pricing. “It is unlikely that auctions will happen this year and will get postponed,” a senior government official said.
Bond yields drop on buyback plan… Government bond yields dropped below the psychologically important 6% level on Wednesday after the central bank announced a Rs 35,000 crore bond buyback programme on Wednesday as part of its latest pandemic relief package. Bond dealers, however, are cautious on the sustainability of the rally given the huge borrowing programme of the Centre and the states. The benchmark yield on 10-year government bonds, which had closed the previous session at 6.02%, ended at 5.97%
KYC rules eased for banks… RBI on Wednesday relaxed KYC (know-your-customer) norms to enable the process to be completed remotely and prevent banks from freezing accounts in which such data has not been updated. “In respect of customer accounts where periodic updation of KYC is due and pending as on date, no restrictions on operations shall be imposed till December 31, 2021, for this reason alone, unless warranted under instructions of any regulator/ enforcement agency/ court of law,” the central bank said in a circular
Loan recast offer to individuals, SMEs… RBI on Wednesday extended relief to individuals and small businesses who have loans up to Rs 25 crore by allowing them to seek a loan restructuring if they are affected by the second wave of the coronavirus that is sweeping the country. Announcing a series of measures to ensure financial stability, the central bank also loosened its purse strings to fund the war against the pandemic by providing a Rs 50,000 crore liquidity window to ramp up healthcare infrastructure. This has been topped with incentives for lenders who build a Covid-19 loan book.