S and P 500 – Sensex, Nifty off day’s high; metals top drags
Global stocks are starting the new month near record highs, underpinned by the economic recovery from the pandemic and ample liquidity from sustained stimulus. Still, concerns linger that rising price pressures could prompt central banks to withdraw support earlier than anticipated.
Defence equipment manufacturers’ shares surge
Shares of Defence equipment manufacturers surged on Tuesday after government decision to include more than 100 items to be manufactured from local companies. Shares of Hindustan Aeronautics gained 5%, Larsen & Toubro traders 0.7% higher, Bharat Electronics up 1.3%, Astra Microwave Products 1.3%.
Mishra Dhatu, Mazagon Dock Shipbuilders, BEML and Garden Reach Shipbuilders soared between 1-5%.
Sebi kicks in higher peak margin on day trade from today
The new norm of trade peak margin of 75% by Securities and Exchange Board of India (Sebi) has kicked in today amidst brokerage firms’ plea to roll-back the regulation. This is the third phase of implementing higher margin on day trading.
The higher limit, imposed by Sebi inorder to curb speculative trading, is anticipated to impact intraday volumes of trade.
The third phase which kick-started today has raised the peak margin trading limit to 75% and will be ultimately increased to 100% by September. The market regulator’s new mandate to margin trading was brought into effect last year in a phased manner. From March 1, 2021, Sebi hiked the upfront margin requirement to 50% from 25%.
ICICI Bank, Infosys top drags
Wadhwan moves SC against NCLAT stay against his offer
Dewan Housing Finance Ltd’s erstwhile promoter Kapil Wadhavan has appealed in the Supreme Court against the stay order passed by the National Company Law Appellate Tribunal (NCLAT), according to two bankers aware of the matter.
The appeal was filed on Monday evening against the NCLAT’s decision to stay National Company Law Tribunal (NCLT) order directing lenders of DHFL to consider the offer by Wadhawan.
Last week the committee of creditors led by Union Bank, and the Reserve Bank of India appointed administrator filed separate applications challenging the Mumbai bench of the NCLT that asked them to evaluate the offer by Wadhawan in the next 10 days. In its appeal, the administrator has termed the NCLT order as “illegal and in breach of settled provision of law”. The insolvency law prohibits the promoter or management of any bankrupt company from attempting to re-acquire it.
India tops list of 30 countries for ransomware attacks
India was amongst the countries most affected by ransomware attacks, a new report by security firm Sophos revealed. The report also found that the average total cost of recovery from a ransomware attack has more than doubled in a year, increasing from $761,106 in 2020 to $1.85 million in 2021 globally.
ONGC, Bajaj Auto drive gains
Mr. Amarjeet Maurya – AVP – Mid Caps, Angel Broking Ltd suggests buy on Bajaj Auto
“In the month of May, Bajaj Auto Ltd reported auto sales number ~114% y-o-y growth to 2,71,862 units which came in-line with our estimates. The company has reported domestic growth ~52% (60,830 units). On the export front, the company reported strong growth of ~142% (2,11,032). Considering strong growth in domestic and export business, we are positive on stock with a buy rating.”
IHS Markit India May manufacturing PMI at 50.8 vs 55.5 in April: Reuters
India’s factory activity growth slowed significantly in May as an escalation in coronavirus cases whacked new orders and output while scarcity of raw materials drove up input costs, a private sector survey showed on Tuesday.
Although daily infection rates have started falling in the past few days there are concerns about underreporting of cases due to a dearth of testing in rural areas.
India has already reported around 28 million coronavirus cases and over 300,000 deaths, leading many states to impose restrictions affecting economic activity.
The Nikkei Manufacturing Purchasing Managers’ Index , compiled by IHS Markit, fell to 50.8 in May from 55.5 in April, its lowest since July 2020. That was only just above the 50-mark separating growth from contraction.
Market view: Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments
The markets are in fine form – we should be headed to 15900-16000 as the next plausible target. If it is not a one way move and the market corrects in between, it should be well utilized to accumulate long positions for higher targets. A strong support base is now formed at 15300 and as long as we keep closing above this level, the overall trend of the market is bullish.
Barring auto, media, all Nifty sectoral indices in the red
Sensex at this hour
PNB Housing Finance extends gains from Monday
A consortium of investors, led by American private equity giant The Carlyle Group and former HDFC Bank Ltd chief executive Aditya Puri, will invest ₹4,000 crore in PNB Housing Finance Ltd, the mortgage lender said on Monday.
The capital infusion will make Carlyle the largest shareholder in PNB Housing.
Carlyle will invest as much as ₹3,185 crore through affiliate Pluto Investments via a preferential allotment of shares and warrants at ₹390 apiece. Existing shareholders, including a fund managed by Ares SSG, will invest ₹400 crore, and private equity firm General Atlantic will invest ₹390 crore.
Indian rupee opens at 72.53 per dollar vs Monday’s close of 72.62/dollar
Petrol, diesel prices hiked again today. Check rates in your city
The prices of petrol and diesel were hiked again in Delhi on Tuesday by 26 paise and 25 paise respectively, according to the Indian Oil Corporation, the country’s largest fuel retailer. Fuel prices were hiked by 16 times in May.
In the national capital, a litre of petrol will cost ₹94.49 and a litre of diesel will cost ₹85.38. (Read here)
India reports 127,510 new covid-19 infections, 2,795 deaths
India reported on Tuesday its lowest daily rise in new coronavirus infections since 8 April at 127,510 cases over the past 24 hours, while deaths rose by 2,795.
The South Asian nation’s tally of infections now stands at 28.2 million, while the death toll has reached 331,895, health ministry data showed. (Reuters)
The Sensex opened at 52,067.51, up 130.07 points, or 0.25%, while the Nifty was at 15,629.65, up 46.85 points, or 0.30%. The benchmark equity indices remained strong after Monday’s record close, after the CSO revealed that GDP fell 7.3% in FY21, and that Q4 indicated recovery before tyhe onset of the second wave of covid.
Brent oil tops $70 as Opec+ flags tightening market before meet
Brent oil advanced above $70 a barrel after the OPEC+ alliance forecast a tightening global market ahead of a production policy meeting.
Futures in London rose as much as 1.3% after posting a second straight monthly gain. The oil glut built up during the pandemic has almost gone and stockpiles will slide rapidly in the second half of the year, according to an assessment of the market from an OPEC+ committee. The coalition is expected to ratify a scheduled output increase for July when it meets later Tuesday.
RBI clears air on cryptocurrency trading
The Reserve Bank of India(RBI) today clarified that banks and other entities cannot cite its 2018 order on virtual currencies as it has been set aside by the Supreme Court of India in 2020. The clarification from the central bank will come as a sign of relief for all investors and crypto exchanges in India who invested in virtual currencies. (Read here)
Adar Poonawalla appointed as chairman of Magma Fincorp
Mumbai-based non-banking finance company Magma Fincorp Limited on Monday announced the appointment of Adar Poonawalla as the chairman of the company. Poonawalla is also the chief executive officer of Serum Institute of India, the maker of Oxford University-AstraZeneca Covishield vaccine in India. (Read here)
Investors richer by ₹3.81 trillion as indices reach all-time high
Driven by a robust show by benchmark indices, investor wealth on Monday rose by ₹3.81 trillion as the Nifty rallied 147 points to close at an all-time high.
The benchmark index of the BSE, Sensex zoomed 514.56 points or 1.00% to close at 51937.44. The broader index, Nifty gained 147.15 points or 0.95% to close at a record high of 15,582.80. During the day, it advanced 170.70 points to 15606.35 its lifetime peak. (Read here)
Markets are likely to extend rally on Tuesday while SGX Nifty trends suggest a steady opening of Indian benchmark indices. On Monday, the Nifty was at 15,582.80, up 147.15 points or 0.95%. The BSE Sensex closed at 51,937.44, up 514.56 points or 1%. (Read here)
Stocks to Watch
ABFRL, Britannia, Cipla, Divi’s Labs, PNB Housing Finance, among other stocks, could be in the news today. (Read here)
Indian economy picked up in Q4 before covid struck again
The Indian economy sequentially recovered in the March quarter at a faster pace than anticipated, indicating that economic activity was gathering momentum before the second wave snuffed out hopes of a quick recovery.
Data released by the Central Statistics Office on Monday showed gross domestic product (GDP) grew 1.6% in the March quarter compared with 0.5% in the preceding three months. For the year ended 31 March, GDP shrank 7.3% due to the impact of the first wave of the pandemic as against 8% contraction estimated earlier.
Next big move in India yields will be higher, bond veteran says
India’s sovereign bond yields are likely to head sideways in coming months before starting to spike higher toward year-end, according to a 25-year bond-market veteran. Signs of quicker inflation and concern the Reserve Bank of India will pull back on policy support should eventually put yields on a rising path, said Radhavi Deshpande, chief investment officer at Kotak Mahindra Life Insurance Co. in Mumbai. Consumer prices will start to rise as the virus wave subsides, and that will also convince policy makers to ease back on stimulus, she said. “We expect the benchmark 10-year yield to head toward 6.50% as inflation worries and policy normalization concerns begin to resurface along with reducing support from the RBI as we approach the year end,” she said in an interview. Yields may stretch toward the high, last seen in April 2020, by March, she added. (Bloomberg)
Asian stocks steady at open
Asian stocks were steady early Tuesday as traders await gauges of manufacturing activity and key American jobs data later in the week to help assess the economic outlook.
Shares fluctuated in Japan, South Korea and Australia. S&P 500 and Nasdaq 100 futures edged lower following a U.S. holiday. The offshore yuan trimmed a retreat sparked by China forcing banks to keep more foreign currencies in reserve for the first time in over a decade, its most substantial move yet to rein in a surging currency.
S&P 500 futures slipped 0.1% as of 9:14 a.m. in Tokyo. The gauge was little changed Friday.
Nasdaq 100 futures shed 0.1%. The index rose 0.2% Friday.
Japan’s Topix index fell 0.1%
Australia’s S&P/ASX 200 Index dropped 0.4%
South Korea’s Kospi index retreated 0.1%
SGX Nifty was up +0.53%
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S and P 500 – Sensex, Nifty off day’s high; metals top drags
Tags: S and P 500, S&P 500