A rebound in US stocks following a three-day rout and easing of US bond yields and inflationary concerns may give domestic stocks a positive start on Friday. Upbeat sentiment in other Asian markets, and back home, data showing an improvement in factory output and fall in retail inflation may help stocks log gains.
Here’s breaking down the pre-market actions:
STATE OF THE MARKETS
SGX Nifty signals a positive start
Nifty futures on the Singapore Exchange traded 172.5 points, or 1.19 per cent, higher at 14,680, signaling that Dalal Street was headed for a positive start on Friday.
Tech view: Nifty resistance at 15,000-15,050
Nifty on Wednesday fell below the 14,700 level, and in the process breached a few crucial supports, including the 50-day moving average. The index ended up forming a Bearish Belt Hold pattern, which suggested bear domination over the bulls. Analysts said the next support for the index lies in the 14,620-14,600 range. They continue to see resistance for the index in the 15,000-15,050 zone.
Asian markets trade higher
Most Asian markets were trading higher in Friday’s trade as the US benchmark yield dropped and inflationary tensions eased. Taiwan’s TWSE jumped 2.13 per cent, while Japan’s Nikkei climbed1.38 per cent. Australia’s ASX advanced 0.7 per cent and Seoul’s Kospi added 0.65 per cent. Hong Kong’s Hang Seng was up 0.37 per cent.
US stock rebound after three sessions
Wall Street put the brakes on a three-day losing streak with a broad stock market rally, powered by big technology companies and banks. The S&P500 index gained 49.46 points or 1.22 per cent to 4,112.50. The Dow Jones Industrial Average index rose 433.79 points or 1.3 per cent to 34,021.45. Tech heavy Nasdaq Composite climbed 93.31 points, or 0.72 per cent to 13,124.99.
Oil prices fall amid India Covid cases
Oil prices fell on Friday after dropping about 3 per cent a day earlier as coronavirus cases remained high in major oil consumer India and as a key fuel pipeline in the United States resumed operations after being shut due to a cyber attack. Brent crude oil futures were down 35 cents, or 0.5 per cent, at $66.70 a barrel, while West Texas Intermediate (WTI) was down 28 cents, or 0.4 per cent, at $63.54 a barrel.
Q4 earnings today
Larsen & Toubro, Dr. Reddy’s Laboratories Cipla, Balkrishna Industries, Macrotech Developers, Aditya Birla Capital, Oberoi Realty, Escorts, SKF India Cholamandalam Finance Holdings and are among companies that will announce their March quarter results today.
FPI sells stocks worth Rs 1,261 crore
Net-net, foreign portfolio investors (FPIs) turned sellers of domestic stocks to the tune of Rs 1,260.59 crore, data available with NSE suggested. DIIs, too, were net sellers to the tune of Rs 704.36 crore, data suggests.
Rupee: The rupee declined by 8 paise to close at 73.42 against the US currency on Wednesday, snapping its four-day gaining streak due to risk aversion in the global markets and surge in crude oil prices.
10-year bonds: India 10-year bond yield marginally gained 0.03 per cent to 6.01 after trading in 6.00 -6.03 range.
Call rates: The overnight call money rate weighted average stood at 3.21 per cent, according to RBI data. It moved in a range of 1.90-3.50 per cent.
DATA/EVENTS TO WATCH
- Q4 earnings: AB Capital I Cipla I L&T I DRL I Escorts I Oberoi Realty
- India WPI inflation for April (12:00 pm)
- India Forex Reserve (05:00 pm)
- India Balance of Trade April (05:00 pm)
- ECB Monetary Policy Meeting Accounts (05:00 pm)
- US Industrial Production MoM April (06:45 pm)
- US Manufacturing Production YoY April (06:45 pm)
- US Baker Hughes Oil Rig Count 14/May (10:30 pm)
India Inc hopes for rebound in Q2… April-June 2021 seems much like, or even worse than, April-June 2020. However, businesses across sectors are hopeful a waning of the second Covid-19 wave — and therefore, greater mobility, speeded up vaccination, another burst of pent-up demand — and a good monsoon will mean brisk sales over the rest of FY22. Recovery will be uneven across sectors, just as the extent of demand dip has been since the second wave hit India. For April-June, most businesses say forecasts are tough to make.
Factory output jumps… India’s factory output climbed 22.4 per cent in March, benefiting from the base effect of the lockdown-marred month a year back as well as a turnaround in the manufacturing sector, while retail inflation slipped to a three-month low of 4.29 per cent in April. The manufacturing sector — which constitutes 77.63 per cent of the index of industrial production (IIP)- grew by 25.8 per cent in March 2021, as per the data released by the National Statistical Office (NSO) on Wednesday.
India Covid curbs may ease in Aug-Sept… The current lockdown-like restrictions in Indian states are likely to get lifted by June-July which should allow for economic normalisation by August and September, said CLSA. It said restrictions will begin to be rolled back with Maharashtra in early June. Possibly, states with over 75% of India’s GDP should roll back these restrictions by July-August 2021, i.e. 4-6 weeks after the peak in the respective states
Realty package to benefit 1.16 lakh… Finance minister Nirmala Sitharaman on Thursday said the Special Window for Affordable and Mid-Income Housing Fund will benefit 1.16 lakh home loan borrowers, whose housing projects were stalled due to last-mile funding issues. Many real estate projects across the country were stalled due to fund crunch. To address this issue, the government, in November 2019, announced the Rs 25,000 crore SWAMIH fund to help complete over 1,500 stalled housing projects comprising 4.6 lakh housing units.
CPI inflation at 3-month low… Retail inflation slipped to 4.29 per cent in April, a three-month low, mainly on account of easing of prices of kitchen items like vegetables and cereals, official data showed on Wednesday. The Consumer Price Index (CPI) based retail inflation stood at 5.52 per cent in March.
Covid hit on offshoring centres… The tech centres of global banks based in Bengaluru, Chennai and Gurgaon have seen staff getting infected during the second wave, forcing them to move some work to other geographies temporarily. Most, however, say their robust business continuity plans have prevented any significant damage. Wall Street giant Morgan Stanley, which has 6,000 employees in Mumbai and Bengaluru, said a small percentage of its staff have been impacted. A British retail bank, which has about 13,000 employees across Gurgaon, Chennai and Bengaluru, had 10-12% staff down at different stages. Goldman Sachs’s Bengaluru centre has 6,000 employees across businesses and some of the staff were affected.
Staff crunch hits NCLT work… The bankruptcy resolution process of several companies, already delayed due to Covid-19, is set to be affected further in the next few months with the number of NCLT falling to almost half its sanctioned strength. NCLT benches across the country are currently working with just 38 members out of a sanctioned strength of 63. This is set to come down to 32 with half a dozen judges retiring in the next four to six weeks, causing further delays in resolutions.
You may need to declare crypto assets… Cryptocurrency players have requested the government to treat cryptocurrency as a digital asset and direct individual holders to declare their crypto holdings while filing income tax returns to assuage concerns around the traceability of virtual currencies such as bitcoins. They have urged the government to make specific provisions in the I-T Act that would lead individual crypto holders of more than Rs 50 lakh to declare their assets once a year.