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What changed for D-Street while you were sleeping

Net-net, foreign portfolio investors (FPIs) were buyers of domestic stocks to the tune of Rs 279.53 crore on Wednesday, data available with NSE suggested.

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Last Updated: Jan 16, 2020, 08.10 AM IST
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The cost of hedged trades will soon dip in the Indian stock derivatives market.
NEW DELHI: The signing of trade deal between US and China has lifted an 18-month-old overhang. However, Singapore trade indicates a flat to negative start for Indian equities.

Here’s breaking down the pre-market actions.

TRADE SETUP

Singapore trading sets stage for flat start
Nifty futures on the Singapore Exchange traded 7 points, or 0.06 per cent, down at 12,265, indicating a negative start for Dalal Street.

Tech view: Nifty forms Dragonfly Doji
Nifty snapped a four-day winning streak on Wednesday and slipped below the 12,350 level. During the session, it saw a smart recovery after briefly falling below its immediate support at 12,280. In the process, the index formed a Dragonfly Doji on the daily chart. Mazhar Mohammad of Chartviewindia.in advised traders to remain 'neutral' on the index.

Asian stocks gain in early trade
World stocks inched to a record high on Thursday after the United States and China signed a deal to defuse their 18-month trade war. MSCI's broadest index of world stocks firmed 0.04 per cent in early trade after closing at record level on Wednesday while its index on Asia-Pacific shares outside Japan rose 0.10 per cent. Japan's Nikkei rose 0.14 per cent while Australian shares were 0.6 per cent higher.

US markets at record high
The Dow ended above 29,000 for the first time on Wednesday and the S&P 500 also closed at a record high. The Dow Jones Industrial Average rose 0.31 per cent to 29,030.22 points, ending above 29,000 for the first time. The S&P 500 gained 0.19 per cent to 3,289.3, its highest ever close. The Nasdaq Composite added 0.08 per cent to 9,258.70, just short of its record high close set on Monday.

Oil prices rise
Oil prices rose on Thursday, propelled higher by the long-anticipated signing of an initial trade deal between Washington and Beijing that sets the stage for a potentially huge increase in energy supplies from the United States to China. Brent was 33 cents, or 0.5 per cent, higher at $64.33 a barrel by 0118 GMT, while U.S. crude was up by 28 cents, or 0.5 per cent, at $58.09 a barrel.

DIIs sell Rs 648 crore worth stocks
Net-net, foreign portfolio investors (FPIs) were buyers of domestic stocks to the tune of Rs 279.53 crore on Wednesday, data available with NSE suggested. DIIs were net sellers to the tune of Rs 648.34 crore, data suggests.

MONEY MARKETS

Rupee: The Indian rupee on Wednesday appreciated by 5 paise to close at 70.81 against the US dollar as easing crude oil prices and weaker greenback lifted sentiment in the domestic forex market..

10-year bonds: India 10-year bond yield was down 0.61 per cent to 6.63 after trading in 6.63-6.67 range.

The DAY PLANNER

  • Q3 Earnings: 5Paisa | Aditya Birla Money | Karnataka Bank | South Indian Bank | Rallis
  • US Fed Beige Book
  • China Dec Home Loan Growth
  • US Jan Initial Jobless Claim
  • ECB Lagarde Speech
  • ECB Monetary Policy Meeting Accounts

MACROS

Fiscal deficit may hit 4%
A sharp shortfall in overall revenues is likely to widen the country’s fiscal deficit in the current fiscal year, former finance secretary Subhash Chandra Garg has said in a blog post. He said only 20% of the disinvestment target of Rs 1.05 lakh crore has been achieved and expressed doubts whether the government will be able to go ahead with the strategic selloff in three large state-run firms such as BPCL, Concor and Shipping Corporation of India this year. The headline fiscal deficit number, therefore, is likely to be between 3.7% to 4% of GDP, he said.

US-China trade deal fails to excite
The US and China signed an initial trade deal on Wednesday that will roll back some tariffs and boost Chinese purchases of US products, defusing an 18-month row between the world’s two largest economies, but leaving a number of sore spots unresolved. There was skepticism the US-China trade relationship was now firmly on the mend. The deal fails to address structural economic issues that led to the trade conflict, does not fully eliminate the tariffs that have slowed the global economy, and sets hard-to-achieve purchase targets, analysts said.

Govt mulling LTCG relief in Budget
The government has approached tax advisers and experts on the possible implications of removing the tax on LTCG introduced amid much criticism in the FY19 Budget. Tax advisers say the government officials are considering options to attract more foreign long-term investment and one proposal is to do away with LTCG tax on listed equities. The government may also tweak the definition of ‘long term’ from a year to two years. Currently, 10% tax is levied on LTCG.

Equity hedged trade cost may drop
The cost of hedged trades will soon dip in the Indian stock derivatives market. Traders using a combination of equity futures and options to create strategies that would result in limited losses could see margins for such bets decline significantly with Sebi expected to cut margin requirements for ‘hedged positions’. This could lead to the cost of such trades coming down by 60-70%. The Options segment contributed 92% to the average daily turnover of Rs 16 lakh crore in the equity derivatives segment in January.

Govt may incentivize phone makers
The government could unveil a Rs 36,000 crore fund to provide production-linked incentives (PLI) to smartphone makers to wean high-end electronic manufacturing away from China and Vietnam to India in the upcoming budget, three top government officials said.
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