SGX Nifty up 50 points; here’s what changed for market while you were sleeping

Here’s breaking down the pre-market actions:

STATE OF THE MARKETS

SGX Nifty signals a positive start
Nifty futures on Singapore Exchange traded 49 points, or 0.31 per cent, higher at 15,758, signaling that Dalal Street was headed for a positive start on Monday.

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Tech View: Nifty50 on Friday formed a small bearish candle on the daily chart. The candle had a long lower wick, similar to the ones seen in the last couple of sessions, suggesting buying at lower levels.

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India VIX: The fear gauge jumped 1 per cent to 15.94 level on Friday over its close at 15.74 on Thursday.

Asian markets gave up early gains

Asian shares opened positive but gave up their gains. The stocks were up as May US payrolls report showed the recovery on track, but not so hot that it might bring forward a policy tapering from the Federal Reserve. MSCI’s broadest index of Asia-Pacific shares outside Japan was down by 0.29 per cent.

• Japan’s Nikkei gained 0.23%
• Korea’s Kospi declined 0.13%
• Australia’s ASX 200 slipped 0.15%
• China’s Shanghai Composite fell 0.20%
• Hong Kong’s Hang Seng shed 0.63%

US shares ended higher on Friday

US stocks climbed on Friday, led by technology shares, after the tepid US monthly jobs report relieved investor concerns the Federal Reserve might rein in monetary stimulus soon.

• Dow Jones gained 0.52% to 34,756.39
• S&P500 climbed 0.88% to 4,229.89
• Nasdaq soared 1.47% to 13,814.49

Dollar comes under pressure

The dollar began the week under gentle pressure, after a second consecutive the month of softer-than-expected US jobs data reversed its recent attempts at a rally, as focus, shifted to inflation figures and a European Central Bank meeting.

• The dollar index was steady at 90.107
• Euro gained 0.5% to $1.2165
• Pound inched up $1.4167
• Yen gained to 109.61 per dollar
• Yuan at 6.3880 against the greenback.

Crude oil nears at $72 a barrel

Oil prices steadied after Brent topped $72 a barrel for the first time since 2019 last week as OPEC+ supply discipline and recovering demand countered concerns about a patchy global COVID-19 vaccination rollout. Brent was up 6 cents at $71.92 a barrel, while US crude added 9 cents to $69.71 per barrel.

Q4 earnings today

MRF, The New India Assurance Company, Union Bank of India, Central Bank of India, Mrs Bectors Food Speciality, SMC Gloabal Securities, Fairchem Organics, Seamec and Yuken India are among companies that will announce their March quarter results today.

FPIs buy shares worth Rs 1,500 crore

Net-net, foreign portfolio investors (FPIs) turned buyers of domestic stocks to the tune of Rs 1,499.37 crore, data available with NSE suggested. DIIs, turned sellers to the tune of Rs 1175.01 crore, data suggests. FPI made a comeback in June and invested nearly Rs 8,000 crore during May 31-June 4.

MONEY MARKETS

Rupee: The rupee fell 8 paise to close at 72.99 against the dollar on Friday, with forex market participants weighing RBI policy measures aimed at mitigating the COVID-19 impact on the economy.

10-year bond: India 10-year bond yield jumped 0.52 per cent to 6.03 after trading in 5.99 – 6.03 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.

DATA/EVENTS PLANNER

• China Balance of Trade May (08:30 am)
• Japan Coincident Index Prel April (10:30 am)
• Japan Leading Economic Index Prel April (10:30 am)
• UK Halifax House Price Index MoM May (01:00 pm)
• China Foreign Exchange Reserves May (01:30 pm)

MACROS

RBI asks PSBs to go for buy-sell swaps
RBI is said to have directed PSU banks to cut a derivative deal known as ‘buy-sell swap’ in the currency market, pulling down the forward premiums by as much as 193 basis points in four trading sessions, dealers said. The fall in premiums to enter forward contracts to exchange currencies will help companies with overseas liabilities to cover their currency risk at a lower cost. This should also boost hedging activities by foreign portfolio investors.

Covid cases falling faster in North
As the second wave of Covid continues to recede in all states of the country, a curious north-south divide has emerged in the falling trends. In most states of northern India, cases have been declining in double quick time, literally, compared with Maharashtra and southern states. Since hitting its peak on May 9, the 7-day rolling average of daily cases in Haryana has declined at a rate of 8.9% each day (till June 3), the sharpest among 18 major states.

Resolutions pick up, but recoveries take time
The insolvency process has resulted in the resolution of 363 cases where financial creditors have outstanding claims of Rs 5.3 lakh crore. However, for banks, the resolution is not the end of the road since orders of the National Company Law Tribunal (NCLT) continue to be challenged by other creditors and debtors as the bankruptcy code gets tested in higher courts.

Bank lending may stay low
Bank lending rates are likely to stay low for a few more quarters, as deposit growth continued to outpace loan growth and corporate demand for funds remained subdued. Addition to deposits at Rs 13.4 lakh crore over 12 months to May 21 was more than double the increase of Rs 6.1 lakh crore in loans outstanding, show Reserve Bank of India data. While loan demand may be muted, banks are also unwilling to cater to lower-rated borrowers to avoid future bad loans.

Central Bank, IOB up for privatisation
The Centre may sell its stake in Central Bank of India and Indian Overseas Bank as part of its mega privatisation initiative unveiled in the Budget. While the two banks have been recommended for disinvestment by NITI Aayog, Bank of India may be a potential candidate for sale, sources told TOI. Sources in DIPAM said it will discuss the legislative changes needed.