SGX Nifty up 10 points; here’s what changed for market while you were sleeping

Asian shares mirrored overnight flat trading in US stocks and traded mixed in early trade on Thursday. Back home, technical charts for the key indices signalled indecisiveness among investors at higher levels, which could be a sign that potential upside in the domestic market could be limited in the near future.

Here’s breaking down the pre-market actions:

STATE OF THE MARKETS

SGX Nifty signals muted start

Nifty futures on the Singapore Exchange traded 10 points, or 0.8 per cent, higher at 13,164, in signs that Dalal Street was headed for a muted start on Thursday.

Tech View: Nifty forms ‘Dragonfly Doji’

Nifty50 tested the 13,000 level on Wednesday, before rebounding and closing in the black. The index formed a Dragonfly Doji pattern on the daily chart, suggesting a balance of power between the bulls and the bears. Analysts said the 12,800 level would remain a major support for the index in the coming days, but if it takes out the record high of 13,145 level, it would send out a signal of strength for the index.

Asian shares open on a mixed note

In Japan, the benchmark Nikkei 225 index edged down 0.18 per cent or 47.46 points to 26,753.52. Hong Kong’s Hang Seng index added 0.34 per cent, or 90.84 points, to 26,623.42. China’s Shanghai Composite fell 0.37 per cent to 3,436.52. South Korea’s Kospi was up 0.37 per cent to 2,686.

Oil prices fall in early trade

In commodities, oil prices slipped on Thursday after rising overnight on Covid-19 vaccine hopes and expectations producing countries would keep limits on their output. Brent crude was down 13 cents at $48.11 a barrel while US light crude eased 15 cents to $45.13.

US stocks settled flat

On Wednesday, the S&P 500 rose 6.56 points to 3,669.01. The index is now up about 13.6 per cent for the year. The Dow Jones Industrial Average gained 59.87 points, or 0.2 per cent, to 29,883.79. The tech-heavy Nasdaq composite, which also opened the month with a new record, slipped 5.74 points, or 0.1 per cent, to 12,349.37.

Burger King India IPO subscribed 3.13 times on Day 1

The initial public offering of Burger King India got subscribed 3.13 times on the first day of subscription on Wednesday. The IPO, which will close on Friday, received bids for 23,32,00,750 shares against 7,44,91,524 shares on offer, as per data available with the NSE.

DIIs sell Rs 1,636 cr worth of stocks

Net-net, foreign portfolio investors (FPIs) were buyers of domestic stocks to the tune of Rs 357.35 crore, data available with NSE suggested. DIIs were net sellers to the tune of Rs 1,635.97 crore, data suggests.

MONEY MARKETS

Rupee: The rupee pared its initial gains to close 13 paise lower at 73.81 against the US dollar on Wednesday.

10-year bonds: India 10-year bond yield fell 0.17 per cent to 5.92 after trading in 5.91-5.95 range.

Call rates: The overnight call money rate weighted average stood at 3.09 per cent, according to RBI data. It moved in a range of 1.90-3.40 per cent.

The DAY PLANNER

  • India Markit Services PMI Nov (10:30 am)
  • Australia Balance of Trade Oct (06:00 am)
  • Australia Home Loans MoM Oct (06:00 am)
  • Japan Jibun Bank Services PMI Final Nov (06.00 am)
  • China Caixin Services PMI Nov (07:15 am)
  • Euro Area Markit Services PMI Final Nov (02:30 pm)
  • US Initial Jobless Claims 28/Nov (07:00 pm)
  • Opec and non-Opec Ministerial Meeting
  • ECB General Council Meeting

MACROS

Banks seek more time for debt rejig… The Indian Banks’ Association has asked RBI to extend the restructuring window outlined by the KV Kamath committee by another three months to March 31, 2021, two people familiar with the development said. The window to seek restructuring is set to lapse on December 31. Banks have told the regulator that they haven’t been able to assess borrower cash flows, given the ongoing case in the Supreme Court on interest waivers during the moratorium, which ended August 31

Investors shun bonds amid LVB fiasco… The RBI move to write off tier-II bonds in the Lakshmi Vilas Bank merger with DBS Bank has led to panic among investors regarding the safety of these instruments. Brokerages ET spoke with said they have received several requests from investors wanting to exit AT1 and tier 2 exposures of smaller banks at 15-20% discount. But with RBI’s sudden move to write off these bonds, not many buyers are willing to buy into them — even at steep discounts.

IDBI moves RBI on LVB bonds… IDBI Trusteeship Services has written to the RBI, requesting the regulator to reconsider its decision to write-off tier 2 bonds worth Rs 318 crore at the erstwhile Lakshmi Vilas Bank. The trusteeship, which manages a large portion of bonds that have been subscribed by debt investors in the lender, has appealed to the RBI to compensate bond holders.

I-T lens on crypto investors… Bitcoin investors profiting from a recent surge in the prices of the cryptocurrency may have to share the rewards with an uninvited guest: the taxman. India’s tax department is closely monitoring the cryptocurrency prices and tracking investors who are exiting after bitcoins hit a three-year high of $20,000. It collated data of investors who traded through banking channels before RBI banned the cryptocurrency.

Profitability may grow in financials… Indian corporates’ financials have rebounded sharply in the past few months with unlocking leading to higher revenues and cost-cutting improving profitability said rating company ICRA, a unit of Moody’s. While the sustainability of growth would depend on demand continuing, the gains in profitability could be eroded in the coming quarters on rising input costs. Financial results of 587 companies excluding financial services, showed aggregate revenues growth of 34.9% in the second quarter from the previous one, but it was still 6.5% lower on-year.

Covid vaccine in March?… Serum Institute of India is likely to begin selling its Covid-19 vaccine in the open market from March-April next year amid substantial demand from big companies which want to buy the jabs in bulk for their employees. “The private market availability will probably be post March-April 2021, if the vaccine is found to be immunogenic and safe,” SII CEO Adar Poonawalla said. The initial supply in the open market will cater to large bulk orders. Eventually, the vaccine will be available to individuals too.

Outlook brightens for steel stocks … Indian steel mills hiked prices on December 1amid a sharp increase in prices of iron ore, a key raw material, and improved domestic demand. Hotrolled coil prices are at a two-year high and some analysts expect further price increases this month. JSW Steel and Jindal Steel & Power increased prices by Rs 2,500-2,700 per tonne and ArcelorMittal Nippon Steel raised prices by Rs 2,500-2,750 per tonne, industry officials said.

Naked warrants in QIPs soon… Sebi has proposed to allow the so-called naked warrants to institutional investors including foreign portfolio investors through the QIP route. A warrant is an option that gives an investor a right to subscribe to equity shares at a pre-determined price on or after a pre-determined time period. Unlike a normal warrant, a naked warrant is not attached to a fresh issue of stocks or bonds. In overseas markets, they are traded on the bourses.

NFO rush amid stocks rally… Record gains for the benchmark stock indices, improving returns over designated periods, and evident gaps in the existing product range are fuelling the launch of NFOs, with 11 out the 13 now open for subscription focused on — you guessed it right — Indian equities. “Due to the rise in the markets, the past returns for one- and three-year periods are looking good,” said Amol Joshi, founder, Plan Rupee.

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