SGX Nifty down 110 points; here’s what changed for market while you were sleeping

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SGX Nifty down 110 points; here's what changed for market while you were sleeping


An overnight selloff in US stocks sent Asian markets tumbling this morning. For domestic stocks, volatility could just rise amid the expiry of January series F&O contracts. Here’s breaking down the pre-market actions.

STATE OF THE MARKETS

SGX Nifty signals gap-down start

Nifty futures on the Singapore Exchange traded 112 points, or 0.80 per cent, lower at 13,914, in signs that Dalal Street was headed for a gap-down start on Thursday.

Tech View: Nifty forms Bearish Belt Hold candle

Nifty50 slipped below the 14,000 mark, as it formed a ‘Bearish Belt Hold’ candle on the daily chart. Such a candle is formed when the day’s open becomes the day’s high point and the index sees selling through the rest of the session, reflecting bear domination. Analysts said the index tested its 34-day EMA during the session and hit an intraday low of 13,929. This level can now prove to be a crucial support for Nifty, followed by the 13,765 mark, they said.

Asian markets tank following US selloff

Asian stocks skidded on Thursday following a sharp Wall Street decline amid deepening concerns about stretched valuations in equities markets, while the dollar and bonds strengthened. In early Asian trade, Australia’s S&P/ASX 200 benchmark lost 1.99 per cent, Japan’s Nikkei fell 1.34 per cent and Hong Kong’s Hang Seng index lost 0.96 per cent. S&P futures pulled back 1 per cent.

US stocks suffer worst one-day loss in 3 months

US stocks suffered their worst one-day loss in three months on Wednesday, with the three major equity indexes tumbling more than 2 per cent each, amid fears the market had been overbought after a rally with few breaks since late October. The Dow Jones Industrial Average, the broadest gauge of the New York Stock Exchange, lost 634 points, or 2.1 per cent, to close the day 30,303. The S&P 500, a barometer for the top 500 US stocks, settled down 2.6 per cent at 3,751.

Q3 earnings today

Maruti Suzuki, IRCTC, Pidilite Industries, Indus Towers, InterGlobe Aviation, Lupin, Colgate Palmolive, United Breweries, Bharat Electronics, IDBI Bank, Laurus Labs, Aarti Industries, AU SFB and Shriram Transport are among companies which will announce their December quarter results on Thursday.

FIIs sell Rs 1,688 crore worth stocks

Net-net, foreign portfolio investors (FPIs) were sellers of domestic stocks to the tune of Rs 1,688.22 crore, data available with NSE suggested. DIIs were net sellers to the tune of Rs 3.38 crore, data suggests.

MONEY MARKETS

Rupee: The rupee edged higher by 2 paise to settle at 72.92 against the US dollar on Wednesday, ahead of the outcome of the US central bank’s meeting.

10-year bonds: India 10-year bond yield stood flat at 5.95 after trading in 5.94-5.96 range.

EVENTS/DATA TO WATCH

  • Q3 earnings: Maruti I RBL Bank I IndiGo I IRCTC I Lupin I IDBI
  • UK Car Production YoY Dec (02:30 pm)
  • Euro Area Economic Sentiment Jan (03:30 pm)
  • Euro Area Consumer Confidence Final Jan (03:30 pm)
  • US GDP Growth Rate QoQ Adv Q4 (07:00 pm)
  • US Jobless Claims 4-week Average Jan/23 (07:00 pm)
  • US Continuing Jobless Claims 16/Jan (07:00 pm)
  • US New Home Sales MoM Dec (08:30 pm)

MACROS

US Fed leaves interest rate unchanged
Chair Jerome Powell said Wednesday that the Federal Reserve will keep pursuing its low-interest rate policies until an economic recovery is well underway, acknowledging that the economy has faltered in recent months. The Fed said in a statement after its latest policy meeting that hiring and economic growth had slowed, particularly in industries affected by the raging pandemic, notably restaurants, bars, hotels and others involving face-to-face public contact.

RBI recommends Crisil grades for banks

The central bank said Wednesday that commercial lenders can use Crisil grades in determining the capital requirement benchmark after the rating company, also engaged in other advisories, formed a dedicated subsidiary to assess creditworthiness. “Banks may, therefore, use the ratings of the CRISIL Ratings Limited for the purpose of risk weighting their claims for capital adequacy purposes,” the central bank said.

Realtors’ business confidence up

An upturn in both residential and commercial segments in the last few months has led to rising business confidence among developers and financiers, replacing the uncertainty that had gripped the sector post Covid-19 pandemic, according to a survey by Knight Frank, FICCI and Naredco. Many market watchers were doubtful of the momentum even after factoring the conversion of pent-up demand but the sector has made a gradual comeback aided by the government’s supportive measures, record low interest rates and resultant pick-up in end-user demand.

Govt to be less tightfisted this Budget

The government is likely to be less tightfisted with spending in the upcoming budget as it’s keen to support the economic recovery, said people with knowledge of the matter. Overall expenditure for FY22 could be bumped up by about 12-14% over the budgeted estimate for this year, with substantial increases for health, defence and infrastructure. The fiscal consolidation roadmap may be stretched out and made flexible to give the government room to spend more.

Pension, insurance money may flow to startups

The government has started deliberations on easing regulations to allow pension and insurance funds to flow to startups, giving them access to stable, long-term domestic capital. Indian startups rely excessively on foreign risk capital in the absence of local funding. More than 85% of investment in Indian startups comes from overseas. Domestic pension and insurance funds have a cumulative corpus of over ₹1.5 lakh crore.

India may return to pre-Covid growth only in 2025… IMF’s chief economist Gita Gopinath says the Indian economy may not be back to pre-Covid growth levels before 2025 and the pace of recovery will depend on reforms in the upcoming budget. “If the question is when will India return back to the pre-pandemic projected level? Based on our numbers out into 2025, it doesn’t still get there. There is a big distance but that’s not just India, there are many countries in that bucket that aren’t closing the gap,” she said.

Rule eased for dependents of H-1B visa holders… US President Joe Biden has permitted dependents of H-1B visa holders to continue working in the country. The measure had been brought in during the Barack Obama presidency in 2015. The previous Donald Trump administration had proposed to revoke it as part of his anti-immigration policy. The latest move is expected to provide relief to more than 100,000 Indian nationals who had moved to the US along with their spouses for work.

India’s FDI flows hit record… India received $58.37 billion in foreign direct investment during the April-November period of 2020—a record-high for the first eight months of a financial year — the commerce and industry ministry said in a statement on Wednesday. FDI for the period, which include equity, reinvested earnings and other capital, was 22% higher than $47.67 billion received in the first eight months of 2019-20. FDI equity flow in the first eight months was at a record $43.85 billion–37% higher than $32.11 billion inflows in the year-ago period.





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