RBI says the economy is holding up well against the new Covid wave, but Dalal Street has started seeing downgrading of earnings estimates for India Inc. Investors would keenly follow some top Nifty50 earnings during the day and watch the Covid tally and the rupee-dollar trend.
Here’s breaking down the pre-market actions:
STATE OF THE MARKETS
SGX Nifty signals positive start
Nifty futures on the Singapore Exchange traded 43.50 points, or 0.30 per cent, higher at 14,531 at 7.30 hours (IST) in signs that Dalal Street was headed for a positive start on Tuesday.
Tech View: Nifty50 resistance seen at 14,560
Nifty50 on Monday breached the 14,500 mark, but failed to hold above it on a closing basis. The index formed an indecisive candle on the daily chart, with a long upper wick, suggesting selling at higher levels. As long as Nifty50 stays below 14,560 level, any rise will be vulnerable to selloff, analysts said.
Asian markets fall in early trade
Asian markets were trading mostly lower in Tuesday’s trade. Korea’s Kospi edged 0.05 per cent lower while China’s Shanghai Composite index shed 0.18 per cent. Japan’s Nikkei declined 0.17 per cent to 29,087. Hong Kong’s Hang Seng dropped 0.26 per cent.
Dollar near multi-week lows
The dollar hovered near multi-week lows versus major peers on Tuesday, weighed by subdued Treasury yields, as investors consolidated positions ahead of the Federal Reserve’s policy decision this week. The dollar index, which tracks the US currency against six peers, was little changed at 90.859 early in the Asian session, after dipping to the lowest since March 3 overnight at 90.679.
US stocks settled higher
US stocks rose modestly on Monday at the start of a busy week featuring Federal Reserve and OPEC meetings and major US corporate earnings. The tech-rich Nasdaq Composite index led major indices, winning 0.9 per cent to close at 14,138.77 and overtake its previous record. The broad-based S&P500 index gained 0.2 per cent to end the day at 4,187.64, narrowly topping its all-time high, while the Dow Jones Industrial Average shed 0.2 per cent to 33,981.57.
DIIs buy Rs 1,023 crore worth stocks
Net-net, foreign portfolio investors (FPIs) were sellers of domestic stocks to the tune of Rs 1,111.89 crore, data available with NSE suggested. DIIs were net buyers to the tune of Rs 1,022.57 crore, data suggests.
Rupee: The rupee strengthened by 28 paise to close at 74.73 against the US dollar on Monday, ending its four-session losing run on the back of weakness in the greenback and positive domestic equities.
10-year bonds: India 10-year bond yield rose 0.05 per cent to 6.03 after trading in 6.02-6.04 range.
DATA/EVENTS TO WATCH
- Q4 Earnings: ABB | | | | HDFC AMC | Hind Zinc | Maruti | TVS | Housing
- China Industrial Profits (YTD) YoY March (07:00 am)
- BoJ Interest Rate Decision (08:30 am)
- BoJ Quarterly Outlook Report (08:30 am)
- US S&P/Case-Shiller Home Price MoM Feb (06:30 pm)
- US House Price Index MoM Feb (06:30 pm)
US Prez to propose a tax hike on richest… President Joe Biden will propose a tax hike on the investment gains of the wealthiest individuals to pay for his new plan to help US families, a top White House economist said Monday. Biden this week is expected to lay out his $1.8 trillion American Families Plan that would provide national child care, paid family leave and free community college, using higher taxes on the rich to offset the hefty price tag.
RBI caps bank CEO tenure… RBI on Monday said that a bank founder can remain CEO for 12 years, which can go up to 15 based on the discretion of the central bank. It also said that CEOs who have already completed the prescribed term on the date of these instructions coming into effect can complete their current term as already approved by RBI. Currently, the longest-serving chief executive of a commercial bank is Uday Kotak of Kotak Mahindra Bank who has been CEO since the bank received its licence in 2003. The RBI had approved a threeyear extension from January 1 for him to continue as CEO.
RBI says economy holding up well… RBI has said in its ‘State of the Economy’ report that the resurgence in Covid infections, if not contained in time, risks protracted restrictions and disruptions in supply chains and consequent inflationary pressures. RBI’s warning comes at a time when prospects of regional lockdowns have increased with rising cases of the disease. The central bank has said that it was important to entrench India’s inflation at 4% so that it can continue to play its stabilising role.
JPMorgan fund plan lifts Bitcoin… Bitcoin rallied back Monday as investors took advantage of the lowest levels in seven weeks to pile back in. The largest cryptocurrency rose as much as 12% to above $53,000, the biggest intraday gain since early February. The move comes as JPMorgan Chase is preparing to introduce an actively managed Bitcoin fund to some clients as soon as this summer, Coindesk reported. The rebound reverses a two-week slump that had pushed Bitcoin below its 100-day moving average.
Earnings downgrades begin for India Inc… Analysts have begun downgrading earnings estimates for India Inc amid local lockdowns and curfews due to the second wave of Covid that’s led to a demand slowdown. More than 80 companies in the NSE 500 universe have seen a downgrade in earnings per share (EPS) estimates in the last four weeks. Nifty consensus earnings have also been cut by 1.7% and 1.1% for FY22 and FY23, respectively, due to the downgrades in auto, banking and pharma stocks.
Hospitality, tourism firms in for a hit… Rating companies will likely be busy the next few months as they assess the risk of the latest round of business curbs after a series of regulatory and judicial interventions swept many weaknesses under the carpet after the first round of lockdowns last year. While no immediate rating downgrades could happen, a lot of companies in hospitality, retail, travel & tourism, commercial realty and entertainment could see sharp downgrades.
SpiceJet wants AI bidding norms eased… SpiceJet’s chairman Ajay Singh has sought a relaxation of bidding rules for national carrier Air India, including a waiver of the ‘clean-team’ protocol and an extension of deadline for submission of a financial bid, according to people in the know. Singh, who is bidding for Air India in his individual capacity, is currently prohibited from accessing the virtual data room or VDR that has been set up for bidders to carry out due diligence on the airline because he has an executive role at SpiceJet, as per informed sources.