Hi there! Welcome to ETMarkets Morning, the show about money, business and markets. I am Saloni Goel, and here is what we have to start your day.
>> Midcaps, smallcaps poised for big rally
>> Economists say sub-3.5% RBI rate can shrink economy
>> Wealth advisers ask investors to avoid multicap funds
>> Mistrys say they have right to pledge Tata Sons shares
And there is more.
But first, a quick glance at the state of the markets...
>> Nifty futures on the Singapore Exchange traded 33 points higher at 7 am (IST) this morning, signalling a positive start ahead for Dalal Street.
>> Asian stocks drifted Tuesday as investors turned their attention to a Fed meeting for clues on monetary policy. Japan's Topix fell 1%, Australia’s S&P/ASX 200 Index was little changed as was South Korea’s Kospi and Hong Kong’s Hang Seng. Shanghai Composite Index fell 0.4%.
>> US stocks ended sharply higher on Monday as signs of progress in developing a Covid-19 vaccine and a spurt of multibillion-dollar deals lifted investor optimism. The Dow rose 327 points, or 1.18%, to 27,993, while the S&P500 gained 42.57 points, or 1.27%, and the Nasdaq 203 points, or 1.87%.
IN OIL MARKET
>> Oil prices inched lower on Tuesday as a bleaker outlook for global fuel demand prompted fresh selling. Brent fell 3 cents, or 0.1%, to $39.58 a barrel while WTI crude futures slipped 2 cents, or 0.1%, to $37.24.
IN CURRENCY MART
>> The rupee pared some of its early gains and settled 5 paise higher at 73.48 against the US dollar on Monday tracking muted domestic equities
>> The dollar traded flat. The yen appreciating 0.4 per cetn, while the offshore yuan rose 0.2%to hit its highest level against the greenback in 2020. The euro was at $1.1870. The British pound slipped 0.2%.
AND IN BULLION
>> Gold prices rose to Rs 54,540 per 10 gm, while silver trended at Rs 68,300 a kg. On MCX, October gold futures climbed 0.72 per cent to Rs 51,687 per 10 gm, while silver December futures were at Rs 68,965 a kg. In Delhi, the price of 22-carat gold remained at Rs 50,000 per 10 gm. In global markets, the yellow metal was little changed at $1,958.25 an ounce.
All in all, Dalal Street looked headed for a positive start. On Monday, Nifty saw selling pressure around recent swing high of 11,584 and gave up all the gains to end up below the 11,450 level. It engulfed Friday’s bullish candle to form a Bearish Engulfing Candle on the daily chart, signalling weakness.
LET ME NOW GIVE YOU A HEADS-UP on some of the top news we are tracking at this hour.
… Midcap and smallcap stocks may be poised for a rally if their current earnings yield — a measure of a stock’s expected returns — is to go by. An analysis showed the trailing earnings yield of 200 stocks of the NSE-500 index is more than 5%. Sanjeev Hota of Sharekhan in the past, when earnings yield has gone above 4%, we have seen a big rally in midcaps and smallcaps.
… Financial advisers are advising investors to avoid fresh investments in multi-cap schemes — a mutual fund product that bets on a mix of blue-chips, mid- and small-cap stocks after Sebi’s new rules for such schemes triggered uncertainty over the product’s future. In the absence of clarity on which multi-cap funds will continue being in the category and how the new norms would impact returns, investors should consider other equity categories such as large- and mid-cap funds or focussed funds, they said.
… SBI economists say RBI’s policy rates cannot dip below a threshold, beyond which a rate cut could be counter-productive and lead to an economic contraction rather than stimulating it. They said lowering policy rates below 3.5 per cent could be counter-productive and recommended an activist fiscal policy going forward.
….The SP Group has argued in the Supreme Court that it is well within its rights to pledge shares of Tata Sons. The Articles of Association of Tata Sons do not restrict the creation of an encumbrance but only regulate the transfer of ownership of the shares to existing or new members, it said.
LASTLY, AN UPDATE ON ALL THE STOCKS BUZZING THIS MORNING
· SBI is in the process of raising up to Rs 7,000 crore more via tier-II bonds and is currently discussing the proposal with potential investors on the pricing part.
· Aditya Birla Group’s flagship company Grasim Industries is going ahead with its Rs 3,523 crore viscose fibre business brownfield expansion in Gujarat, albeit with revised timelines
· More staff are expected to transition into leadership roles at Cognizant in the years ahead, its chief executive Brian Humphries said, a move that will cut down on hiring outside professionals.
· Ashok Leyland on Monday expanded into a resilient light commercial vehicle market with the new generation Phoenix platform, aiming to break into top 10 global commercial vehicle markets.
That’s it for now. For all the market news through the day, do track ETMarkets.com. Have a great day ahead! Bye-bye