Market

SGX Nifty down 65 points; here’s what changed for market while you were sleeping

Domestic stocks may see a weak start to Wednesday’s trade, tracking muted closing for US stocks overnight. Technical charts for key indices are hinting at weakness ahead. Cues from other Asian markets are not supportive either. The dollar index edged a bit higher, while oil steadied after Tuesday’s fall. Here’s breaking down the pre-market actions:

STATE OF THE MARKETS

SGX Nifty signals a negative start

Nifty futures on Singapore Exchange traded 65 points, or 0.41 per cent, lower at 15,776, signaling that Dalal Street was headed for a muted start on Wednesday.

  • Tech View: Nifty50 on Tuesday formed what resembled a Gravestone Doji candle on the daily chart, sending out signals of weakness.
  • India VIX: The fear gauge jumped 2 per cent to 12.28 level on Tuesday over its close at 12.07 on Monday.

Asian markets fall in early trade

Asian share market opened lower on Wednesday after the US Dow index dropped with a higher yen weighing on the market. However, Australian shares rose. MSCI’s broadest index of Asia-Pacific shares outside Japan was down by 0.51 per cent.

  • Japan’s Nikkei declined 0.84%
  • Korea’s Kospi fell 0.67%
  • Australia’s ASX 200 rose 0.55%
  • China’s Shanghai Composite shed 0.20%
  • Hong Kong’s Hang Seng tanked 0.85%

US stocks ended mostly lower

A post-holiday pall fell on US stocks on Tuesday even as the Nasdaq eked out a new record close amid slightly underwhelming data and the failure of OPEC+ talks. The Dow and S&P500 index fell on Tuesday, with financials and other groups closely tied to economic growth leading declines.

  • Dow Jones shed 0.60% to 34,577.37
  • S&P 500 fell 0.20% to 4,343.54
  • Nasdaq climbed 0.17% to 14,663.64

Dollar edges higher, euro at 3-month low

The euro staggered near a three-month low against the dollar on Wednesday after disappointing German data raised doubts about the strength of the economic recovery, while the dollar awaited the Federal Reserve’s minutes from its last policy meeting.

  • Dollar index advanced to 92.550
  • Euro slipped to $1.1820
  • Pound fell to $1.38005
  • Yen rose to 110.645 per dollar
  • Yuan gains mildly to 6.4767 against the greenback

Crude prices steady after fall

Oil prices steadied on Wednesday after a steep drop in the previous session, following the cancellation of talks among OPEC+ producers that raised the prospect that the world’s major crude exporters will turn on the taps to gain market share. Brent crude was up 3 cents at $74.56 a barrel, after slumping more than 3 per cent on Tuesday. US oil was up 7 cents at $73.44 a barrel, having declined by more than 2 per cent in the previous session.

FPIs sell shares worth Rs 543 crore

Net-net, foreign portfolio investors (FPIs) turned sellers of domestic stocks to the tune of Rs 543.3 crore, data available with NSE suggested. DIIs, turned buyers to the tune of Rs 645.59 crore, data suggests.

Manual order caused spike in Nifty futures

NSE on Tuesday said a spike in Nifty futures was due to a manual order placed by a trading member at a significantly higher price than the prevailing price in the market. Due to the spike, the Nifty futures touched a high of 16,546.5. The exchange has sought explanation from the trading member on why the order was placed at a price higher than the prevailing price, which could have misled the market.

MONEY MARKETS

Rupee: The domestic currency weakened by 24 paise to close at 74.55 against the US dollar on Tuesday as firmer American currency and rising crude oil prices weighed on investor sentiment.

10-year bond: India 10-year bond yield jumped 1.43 per cent to 6.17 after trading in 6.13 – 6.19 range.

Call rates: The overnight call money rate weighted average stood at 3.15 per cent, according to RBI data. It moved in a range of 1.90-3.40 per cent.

DATA/EVENTS TO WATCH

  • India Modi Cabinet expansion (evening)
  • Japan Leading Economic Index Prel May (10:30 am)
  • UK Halifax House Price Index MoM June (11:30 am)
  • UK Halifax House Price Index YoY June (11:30 am)
  • China Foreign Exchange Reserves June (01:30 pm)
  • UK Labour Productivity QoQ Final Q1 (02:00 pm)
  • US JOLTs Job Openings May (07:30 pm)
  • US FOMC Minutes (11:30 pm)

MACROS


Fuel prices set to rise further
Record-high domestic fuel prices are expected to rise further as crude oil shot past $77 a barrel on Tuesday after OPEC+, the producers’ cartel, failed to reach an agreement over increasing supplies. Oil prices have gained $27 a barrel, or 54%, since the beginning of 2021 as global demand is gaining pace following wider vaccination while supply has been curbed by OPEC+, a grouping of 23 oil-producing countries led by Saudi Arabia and Russia.

GST collections drop below Rs 1 lakh cr
For the first time in eight months, GST collections slipped below Rs 1 lakh crore due to the lockdown across large parts of the country, with the mop-up adding up to Rs 92,849 crore in June. Latest data released by the finance ministry was the lowest since Rs 95,480 crore collected in last September. But, the government was optimistic that the tally will improve this month as economic activity has resumed, following the second wave of coronavirus infections.

Major reshuffle in Modi Cabinet today
A major reshuffle of the Union council of ministers, which will have a significant OBC imprint, is on the cards. The exercise also aims to increase women representation, bring in state leaders with strong administrative experience, reduce the average age of the ministry and induct people with professional background. The exercise looks to strike a balance within caste and regional categories. The OBC selections are expected to ensure smaller communities are not left out with the tally of “backward” leaders expected to reach around 25—from just over a dozen at present.

Templeton debt fund investors to get funds
Investors in the six debt mutual fund schemes of Franklin Templeton MF that are under winding up will get back the fifth tranche of money in the week starting July 12. SBI MF, which has been appointed the liquidator for these schemes under winding up by the Supreme Court, will distribute another Rs 3,200 crore in the six schemes of Franklin Templeton in the coming week.

Bond yields climb on oil price worry
Bond yields climbed by up to 11 basis points Tuesday, with benchmark rates surging to their highest in more than three months, as concerns mount over rising global crude oil prices and the cascading impact of expensive transport-fuel on broader inflation. The benchmark gauge yielded 6.18%, its highest level since March 22. When bond yields rise, prices fall. The new benchmark paper, which will be introduced in a weekly auction this Friday, is likely to yield higher, raising overall funding costs, dealers said.

Consumer loans get riskier post Covid
The pandemic’s fallout on the economy has made consumer lending riskier for banks even though it has been the only sector to help lenders keep their loan books afloat through the crisis. Delinquency rates for such loans are now going up, particularly for private sector banks and NBFCs, warned the RBI’s latest financial stability report. At the same time, the second wave has also affected demand for such loans in April.

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