Global markets are all up this morning, tracking overnight gains on Wall Street. But Nifty futures in Singapore are trading lower, hinting at a muted start for domestic indices. Here’s breaking down the pre-market actions.
STATE OF THE MARKETS
SGX Nifty signals negative start
Nifty futures on the Singapore Exchange traded 46 points, or 0.45 per cent lower at 10,229, in signs that Dalal Street was headed for a negative start on Wednesday.
Tech view: Nifty forms bearish candle
Nifty50 on Tuesday erased morning gains to close flat. The index formed a small bearish candle on the daily chart after forming indecisive Doji candles for two consecutive sessions. Analysts said the index is losing strength and the bias has turned negative.
Asian stocks edge higher
Japan’s Nikkei225 index rose 0.27 per cent, or 60.34 points, to 22,348.48 in early trade. China’s benchmark Shanghai Composite index added 0.22 per cent, or 6.51 points, to 2,991.18. Hong Kong market was closed for a public holiday.
US stocks settled higher
The S&P500 index, the broadest of the three major indices, finished at 3,100.29, up 1.5 per cent for the day and around 20 per cent for the quarter, the biggest gain since 1998. The Dow Jones Industrial Average gained 0.9 per cent to 25,812.88, while the tech-rich Nasdaq Composite Index jumped 1.9 per cent to 10,058.77.
Oil prices rise on fall in US inventory
Oil prices rose on Wednesday after an industry report showed crude inventories in the United States fell much more than expected, suggesting demand is improving even as the coronavirus outbreak spreads around the world. Brent crude rose 33 cents, or 0.8 per cent, to $41.60 a barrelafter declining more than 1 per cent on Tuesday.
DIIs buy Rs 2,051 cr worth of stocks
Net-net, foreign portfolio investors (FPIs) were sellers of domestic stocks to the tune of Rs 2,000.08 crore, data available with NSE suggested. DIIs were net buyers to the tune of Rs 2,051.31 crore, data suggests.
Voda Idea reports mega Q4 lossVodafone Idea posted Rs 11,643.5 crore loss for March quarter, its seventh successive three-month period in the red, hurt by loss of subscribers, high finance costs and a one-time charge related mainly to its statutory dues. The telco warned of continued threat to its viability unless the Supreme Court allows it to pay the thousands of crores in adjusted gross revenue to the government in instalments, besides being able to renegotiate repayment terms with its lenders.
MONEY MARKETS
Rupee: The rupee appreciated by 7 paise to 75.51 against the US dollar on softening crude oil prices and early gains in domestic equity market
10-year bonds: India 10-year bond yield fell 0.25 per cent to 5.88 after trading in 5.87-5.92 range.
Call rates: The overnight call money rate weighted average stood at 3.55 per cent, according to RBI data. It moved in a range of 1.80-4.05 per cent.
DATA/EVENTS TO WATCHIndia June Auto Sales Numbers
Japan Jibun Bank Manufacturing PMI Final June (06.00 am)
India June Markit Manufacturing PMI (10.30 am)
China Caixin Manufacturing PMI June (07.15 am)
Japan June Consumer Confidence (10.30 am)
UK Nationwide Housing Price June (11.30 am)
UK Markit/CIPS Manufacturing PMI Final June (02.00 pm)
US FOMC Minutes (11.30 pm)
MACROS
Current account surplus after 13 years… Data released by RBI shows the country recorded a current account surplus of $600 million (0.1% of GDP) for the January-March 2020 quarter against a $4.5 billion deficit a year ago. The last time the current account was in surplus was over a decade ago in March 2007. The surplus was generated because of the trade deficit shrinking to $35 billion and a sharp rise in net invisible receipts at $35.6 billion compared with the year-ago period.
Fiscal deficit at 58.6% at end-May… The fiscal deficit during the first two months of the current financial year widened to Rs 4.66 lakh crore or 58.6 per cent of the budget estimates mainly on account of poor tax collection due to the lockdown to check the spread of coronavirus.The fiscal deficit during the corresponding period of last year was be 52 per cent of the budget estimates.
Core sector shrinks in May… India’s infrastructure sector contracted at a slower pace in May compared with April, data released on Tuesday showed, helped by the relaxation in lockdown restrictions and good growth in fertiliser production ahead of the sowing season. The index of eight core industries dropped 23.4% in May from a year earlier; in April, the fall was 37%. Output contracted 30% in the first two months of the current financial year.
Banks set aside Rs 13K cr towards Covid hit… Indian banks have set aside Rs 13,653.2 crore for provisions towards moratorium and deferments related to Covid-19 in March quarter. This raised the total loan loss provision for Q4 by 22.7% to Rs 73,712 crore, which was 15.8% lower than the year-ago period. Covid provisioning was 18.5% of total loan loss provisioning for the quarter and in the absence of it, the loan loss for Q4 would have been Rs 60,058.8 crore.
Diesel cars going out of choice… Diesel is increasingly going out of the choice list of the passenger vehicle buyer in India, as the fuel’s price differential with petrol is disappearing. As much as 58% of new passenger vehicle sales in FY12 were diesel-powered cars, utility vehicles and vans. The share has come down to 28% in the fiscal year ended in March 2020, and just 17% in the final quarter. This trend is expected to accelerate.
MNCs dole out dividends with both hands… The big dividend rush by MNCs is on. Taking advantage of the absence of dividend distribution tax (DDT), many multinational companies have been doling out large dividends over the past two months. Pharma major Pfizer paid a special dividend of Rs 320 per share, or 3,200%, last month compared to Rs 22.50 last year. Sanofi India paid Rs 106 and a one-time special dividend of Rs 243 recently. Sanofi’s total dividend this year was Rs 349 per share against last year’s Rs 66.
Bonanza for SBI, other Yes Bank investors… SBI and other lenders that had purchased 10 billion equity shares of YES Bank at Rs 10 per share under the reconstruction scheme approved by RBI will not have to pay tax on the price differential between what was paid by them and the fair market value. In a notification issued on Tuesday, the Central Board of Direct Taxes has provided for an exemption from deemed tax to the equity share purchase transaction.
Premji Invest, SBI eye Future Generali… Wipro’s billionaire founder Azim Premji’s investment firm Premji Invest and SBI General Insurance are exploring a joint bid to acquire Future Generali. Future Group is keen to sell its stake in the insurance venture and Italy’s Generali Group is said to be considering an exit from India. Premji Invest has a 16% stake in SBI General Insurance, which was acquired last year when Insurance Australia Group (IAG) offloaded a 26% holding in the insurer. Warburg Pincus picked up the remaining stake.
Sharp drop in personal loans… Bank loans to individuals under the personal segment shrunk by Rs 74,790 crore in April and May driven by a sharp drop in credit card outstanding and a decline in loans against fixed deposits. Bank advances to the services sector and industry also recorded a sharp drop. A decline in bank credit to businesses in the first quarter is not unusual as companies repay some of the high borrowings they undertake at the end of the previous financial year. The overall drop in non-food credit in April-May at Rs 1.82 lakh crore is identical to the drop seen in the previous year

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