Market

SGX Nifty down 240 points; here’s what changed for market while you were sleeping

Domestic equity indices look set to see a gap-down start, tracking weakness across Asian markets amid concerns over rising cases of Covid’s Delta variant. All eyes will be on the listing of GR Infra and Clean Science. Investors may also react to HDFC Bank’s Q1 results and await quarterly earnings from HCL Tech and ACC, scheduled for today. Here’s breaking down the pre-market actions:

STATE OF THE MARKETS

SGX Nifty signals a negative start

Nifty futures on Singapore Exchange traded 238 points, or 1.49 per cent, lower at 15,698.50, signaling that Dalal Street was headed for a negative start on Monday.

  • Tech View: Nifty50 on Friday hit an all-time high of 15,962 but settled flat. Analysts took heart in the fact that the index managed to stay above the 15,900 level.
  • India VIX: The fear gauge eased 5 per cent to breach 12 mark to 11.70 level on Friday over its close at 12.27 on Thursday.

Asian stocks bleed in early trade
Asian shares slipped on Monday as investor risk appetite was soured by fears of rising inflation and a relentless surge in coronavirus cases. MSCI’s broadest index of Asia-Pacific shares outside Japan was down by 1.13 per cent.

  • Japan’s Nikkei tanked 1.37%
  • Korea’s Kospi declined 0.97%
  • Australia’s ASX 200 fell 1.13%
  • China’s Shanghai Composite shed 0.5%
  • Hong Kong’s Hang Seng plunged 2.08%

US stocks settled lower on Friday

Wall Street ended lower on Friday, weighed down by declines in Amazon, Apple and other heavyweight technology stocks, while investors worried about a rise in coronavirus cases tied to the highly contagious Delta variant.

  • Dow Jones shed 0.86% to 34,687.85
  • S&P 500 tanked 0.80% to 4,327.16
  • Nasdaq declined 0.80% to 14,472.24

Dollar firm as Delta virus threat looms

The dollar sat near its highest levels in months on Monday as the spread of the Delta coronavirus variant made investors nervous about the global recovery and sent money into safety.

  • Dollar index steady at 92.72
  • Euro at $1.1801 agaist dollar
  • Pound slipped to $1.3755
  • Yen gained at 109.90 per dollar
  • Yuan at 6.4833 against the greenback

Crude oil prices drop in early trade

Oil prices fell more than 1 per cent on Monday, hit by an agreement over the weekend within the OPEC+ group of producers to boost output after an earlier pact fell apart due to objections from the United Arab Emirates (UAE). Brent crude was down $1, or 1.4 per cent, at $72.59 a barrel, after falling nearly 3 per cent last week. US oil was down 94 cents, or 1.3 per cent, at $70.87 a barrel, having declined almost 4 per cent last week.

FPIs sell shares worth Rs 265 crore

Net-net, foreign portfolio investors (FPIs) turned sellers of domestic stocks to the tune of Rs 466.3 crore, data available with NSE suggested. DIIs, turned buyers to the tune of Rs 666.07 crore, data suggests. FPIs have pulled out Rs 4,515 crore from the equities segment in the first half of July.

Q1 earnings today

HCL Technologies, HDFC Life Insurance, ACC, Nippon Life India Asset Management, Indian Bank, Alok Industries, City Union Bank, Supreme Petrochem, Mastek, PSP Projects, GTPL Hathway and Swaraj Engines are among the company that will announce quarterly earnings today.

GR Infra, Clean Science to make market debuts

Udaipur based GR Infraprojects and Pune based Clean Science and Technology will make their debut on Dalal Street today. Both IPOs were open for subscription during July 7-9. Grey market trends are hinting towards a strong listing for both the stocks.

MONEY MARKETS


Rupee: The rupee saw a marginal 3 paise loss to settle at 74.57 against the US dollar on Friday as consistent demand for the greenback from importers exerted pressure on the domestic currency.

10-year bonds: India 10-year bond yield jumped 0.21 per cent to 6.13 after trading in 6.11 – 6.15 range.

Call rate: The overnight call money rate weighted average stood at 3.19 per cent, according to RBI data. It moved in a range of 1.90-3.40 per cent.

The DAY PLANNER

  • Q1 Earnings: HCL Tech | ACC | HDFC Life | Mastek | Indian Bank
  • Euro Area Construction Output YoY May (02:30 pm)
  • UK BoE Haskel Speech (03:30 pm)
  • US NAHB Housing Market Index July (07:30 pm)

MACROS


Opec+ output hike may cool oil price

The OPEC+ grouping agreeing to add more barrels to the market will ease pump prices and inflation in the country, both of which have risen to record levels and drawn Opposition flak. So politically, the deal will help the government blunt some of the criticism in Parliament, which begins its monsoon session on Monday, once fuel prices start declining. Lower oil prices will also give the government financial breathing space.

Govt, PFRDA weigh reforms

The government and the Pension Fund Regulatory & Development Authority (PFRDA) are discussing amendments to the law to ensure the regulation of a large number of superannuation funds that currently escape the required scrutiny. Although there are no official estimates, around 400-500 are seen to be “unregulated” superannuation funds, with 50-60 being large players. There are at least three regulators for the pension business, with PFRDA handling the National Pension System (NPS), while the insurance regulator deals with annuities sold by life insurers.

ED stand hits at core of crypto world
The stand taken by the Enforcement Directorate (ED) on cryptocurrencies can unsettle crypto trading and all bourses in India. The agency, in its recent notice to WazirX, has asked the country’s largest crypto exchange to explain why ‘withdrawal from crypto wallets’ is not a violation of the Foreign Exchange Management Act (FEMA), a person familiar with the issue told ET. The ED notice puts a question mark on the very essence of cryptos and fundamental structure of the underlying digital ledger, blockchain, that allow holders of cryptos to freely transfer coins from their wallets to another wallet and to anyone, anywhere in the world.

Rupee forwards premium shoots up

Forwards premium, a gauge for hedging demand, shot up as much as 35 basis points in the offshore derivatives market in the past six weeks when global investors began to pour money in local companies’ share sales. Elevated premiums pave the way for arbitrage opportunities with local premiums showing little signs of rising. Some banks have already started tapping such arbitrage opportunities where they are seen buying dollars in the onshore forwards and selling it in the offshore derivative market, known as non-deliverable forwards (NDF).

FIIs turn bullish on IT stocks
Institutional investors are raising wagers on IT counters, thanks to a strong deal pipeline and expectation of several companies beating revenue guidance in the first quarter of fiscal 2022. The sectoral weight of domestic funds rose to a multi-month high of 11.7% in June 2021, according to data compiled by Motilal Oswal Financial Services. Local funds raised allocation to IT stocks by 70 basis points in June on a month-on-month basis, the highest across sectors.

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