Amid sharp cuts in consensus Nifty earnings, the rally in domestic stocks seems to be losing its steam. Technical charts are hinting at consolidation ahead and fundamentals offer no reason for the market to rally the way it has done, as demand revival will only be gradual.
Here’s breaking down the pre-market actions.
STATE OF THE MARKETS
SGX Nifty signals positive start
Nifty futures on the Singapore Exchange traded 26.25 points, or 0.26 per cent higher at 10,208.20 in signs that Dalal Street was headed for a positive start on Tuesday.
Tech view: Nifty forms Bearish Belt Hold
Nifty50 saw strong selling pressure above the 10,300 level on Monday, as it cut most of its gap-up gains to end marginally higher. The index formed a ‘Bearish Belt Hold’ candle on the daily chart, as selling pressure set in from the word go. This does not bode well for the market. Analysts said the recent rally might be losing its steam.
Asian shares mixed in early trade
Hong Kong’s Hang Seng index added 0.52 per cent, or 129.24 points, to 24,906.01. China’s benchmark Shanghai Composite index rose 0.06 per cent, or 1.76 points, to 2,939.54. Japan’s benchmark Nikkei 225 index was down 0.21 per cent or 49.71 points at 23,128.39 in early trade.
Oil prices rise on demand recovery
Oil prices climbed on Tuesday, paring losses from the previous session, as markets broadly rose on growing confidence in a global recovery with pandemic lockdowns easing. US WTI crude futures rose 1.3%, or 50 cents, to $38.69 a barrel at 0134 GMT, after dropping by $1.36 on Monday. Brent crude futures rose 1.4%, or 56 cents, to $41.36 a barrel. The benchmark contract fell $1.50 on Monday, snapping a seven-day streak of gains.
US stocks settled higher
US stocks ended higher, building on prior week’s solid gains. On Monday, the Dow Jones Industrial Average jumped 461.46 points, or 1.70 per cent, to 27,572.44. The S&P 500 increased 38.46 points, or 1.20 per cent, to 3,232.39. The Nasdaq Composite Index was up 110.66 points, or 1.13 per cent, to 9,924.74.
Q4 results today
Hero MotoCorp, Graphite India, Bombay Dyeing, MRPL, Teamlease, PSP Project and Gujarat Pipavav are slated to announce their March quarter results on Tuesday.
DIIs sell Rs 1,238 cr worth of stocks
Net-net, foreign portfolio investors (FPIs) were buyers of domestic stocks to the tune of Rs 813.27 crore, data available with NSE suggested. DIIs were net sellers to the tune of Rs 1,238.23 crore, data suggests.
Rupee: The Indian rupee on Monday settled with a marginal 3 paise rise at 75.55 against the US dollar as sustained foreign fund inflows offset impact of rising crude oil prices on investor sentiment.
10-year bonds: India 10-year bond yield fell 0.24 per cent to 5.80 after trading in 5.80-5.85 range.
Call rates: The overnight call money rate weighted average stood at 3.75 per cent, according to RBI data. It moved in a range of 2.15-4.15 per cent. (Not updated)
The DAY PLANNER
Hero MotoCorp I MRPL I Teamlease I Bombay Dyeing | eClerx |
Euro Area Employment Change for Q1 (02.30 pm)
Euro Area Q1 Third GDP Growth Estimate (02.30 pm)
Euro Area EcoFin Meeting
NBFC borrowing costs drop… Borrowing costs for NBFCs declined last month, after the most aggressive economic policies in a decade helped avert a further worsening in the sector during the pandemic. Premiums that investors seek to buy AAA-ranked five-year bonds of non-bank financial lenders over government securities declined in May after gaining for three consecutive months. A custom index of total outstanding debt at 50 financiers stayed at the same level as the previous month.
Bank FD rates drop near savings rate… It no longer pays to keep your money locked up in a bank. FD rates have plummeted in recent months, with short-term rates now hovering very close to or below savings account rates. Surplus liquidity and sluggish credit growth have forced banks to cut rates on both short-term and long-term deposits, and made savers move to riskier instruments such as debt market mutual funds or even equity assets. State Bank of India (SBI) now offers 2.9% for deposits of between seven days and 45 days, slightly better than the 2.7% offered on savings bank accounts.
Retails bargain for mall rental waiver… Large shopping malls, which have been feeling the pinch of a long lockdown, received another blow on Monday as several top retailers and restaurants refrained from opening outlets due to a deadlock over new rental agreements. While some big mall owners, such as DLF, Nexus, Phoenix and Select City, have offered to waive 50% rent during the lockdown period, most of these determined retailers have demanded a full waiver. They also want further restructuring of rent through revenue share and a reduction in minimum guarantee for six-to-nine months.
WB expects Indian economy to contract 3.2%…The World Bank expects India’s economy to contract 3.2% in this financial year, a sharp downgrade from its April projection of 1.5-2.8% growth, citing the stringent lockdown and spillovers from weaker global economic performance. The lockdown would severely curtail activity despite fiscal and monetary stimulus, it said in a report on Monday.
IndusInd promoters to raise stake… Promoters of IndusInd Bank, the Hinduja brothers, will raise their stake in the private-sector lender within the regulatory limit of 15% through open market purchases — a move that helped the stock emerge as the biggest gainer on the 30-share Sensex on Monday. IndusInd International Holding, the promoting entity of the bank, currently holds 14.68%. The stock surged 7% to end at Rs 451.65 on Monday.
Bharat Bond ETF NFO coming… Bharat Bond ETF, India’s first bond exchange-traded fund, will launch a new fund offer in July to raise Rs 14,000 crore in two new series. The proceeds will be used as additional funding for central public sector undertakings and other government organisations to meet borrowing requirements.
Govt goes for cost cutting…The government is likely to impose curbs on import-intensive capital spending by ministries and departments among further measures to divert resources to where they are needed and keep unnecessary expenditure in check in FY21 as it deals with the fallout of the coronavirus pandemic. A top government official said spending deemed unnecessary or which can be delayed is likely to face curbs to meet resource needs elsewhere.
ED told to confiscate Nirav Modi assets… A special court on Monday partly allowed a plea by the ED to confiscate properties owned by diamantaire Nirav Modi in the multi-crore PNB scam. It was the first such order passed under the Fugitive Economic Offenders Act. Special judge V C Barde exempted from confiscation properties that are secured to PNB and a consortium of banks either through mortgage, hypothecation or guarantee. The court said the assets shall be attached by the ED within a month.
Labour woes dog realty, construction…. Construction and real estate are staring at a worker shortage of 52%, followed by manufacturing at 44% and healthcare and pharmaceuticals at 42%, according to a survey based on initial hiring discussions, enquiries and mandates. Companies across industries are facing a huge shortage of blue-collar workers as they gradually resume operations after the lockdown, and many are lining up incentives to woo workers from near and far.
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