SGX Nifty down 10 points; here's what changed for market while you were sleeping

NEW DELHI: After Monday’s massive selloff, India’s benchmark equity indices could take a breather on Tuesday and open flat. Rising Covid cases still remain a worry, which is likely to keep indices under pressure. Here's breaking down the pre-market actions.

STATE OF THE MARKETS
SGX Nifty signals flat start
Nifty futures on the Singapore Exchange traded 8.60 points, or 0.06 per cent, lower at 14,698.00 in signs that Dalal Street was headed for a flat start with a negative bias on Tuesday.

Tech View: 14,450 to act as trend decider
Dalal Street traders were extremely bearish on the Nifty 50 index that formed a long bearish candle for the day. For the last 20 days, 14,450 has been an important point on daily charts. Even today, breaking all the important supports, the market went back to 14,450 levels and came back. The level is likely to continue acting as a trend decider, said analysts.

Asian markets rise in early trade
Asian equities are poised to rise on Tuesday after the S&P 500 and Dow indexes set records as a streak of strong U.S. economic data fueled optimism even as a smaller-than-expected climb in 10-year Treasury notes eased inflation concerns. Australian S&P/ASX 200 futures rose 0.34 per cent in early trading, while Hong Kong's Hang Seng index futures rose 0.40 per cent. .

Treasury yields edge lower
US Treasury yields edged lower on Monday, as investors paused recent selling of government bonds and took profit from short positions, though the uptrend in rates remained intact following Friday's blockbuster jobs report.

US stocks settled higher
On Wall Street, Dow Jones Industrial Average rose 1.13 per cent to a record high of 33,527.19, the S&P 500 gained 1.44 per cent to a record 4,077.91 and the Nasdaq Composite added 1.67 per cent, to 13,705.59.

Crude oil pare losses
Oil prices rose early on Tuesday as a drop in the U.S. dollar made crude a more attractive buy, paring losses of more than 4 per cent incurred overnight on the prospect of producers returning more than 2 million barrels per day of supply to the market by July. Brent crude futures jumped 83 cents, or 1.3 per cent, to $62.98 a barrel at 0012 GMT, after falling 4.2 per cent on Monday.

FIIs sell Rs 932 crore worth of stocks
Net-net, FPIs were sellers of domestic stocks to the tune of Rs 931.66 crore on Monday, data available with NSE suggested. DIIs were net buyers to the tune of Rs 75.48 crore, data suggests.

MONEY MARKETS
Rupee: The rupee declined by 18 paise to close at 73.30 against the US currency on Monday on strong dollar in global markets and risk aversion in the domestic market amid concerns over rising coronavirus cases.

10-year bonds: India 10-year bond yields were flat at 6.123 after trading in 6.123 - 6.202 range.

EVENTS/DATA TO WATCH

• China Caixin Services PMI MAR (07:15 am)
• RBA Interest Rate Decision (10:00 am)
• UK New Car Sales YoY Mar (01:30 pm)
• Euro Area Unemployment Rate Feb (02:30 pm)
• US JOLTs Job Openings Feb (07:30 pm)
• US Consumer Inflation Expectations Mar (08:30 pm)
• US IMF/World Bank Spring Meetings

MACROS
Covid fatalities on the rise… The first few weeks of the Covid pandemic’s second wave in India did not see a corresponding rise in fatalities. But that has changed in the last four weeks. Since March 8, Covid-related deaths have risen at the same pace as the spike in infections, with the seven-day average of daily cases and fatalities both surging nearly 345% during this period. Daily deaths (seven-day average) have risen from 96 on March 8 to 425 on April 4, which translates to an increase of nearly 4.5 times, exactly mirroring the rise in cases during this period.

Factory activity slowest in 7 months… Manufacturing activity in India grew at its slowest pace in seven months, restricted by the pandemic with production, new orders and input buying expanding at softer rates and employment declining amid waning business confidence, a private survey showed Monday. The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index fell to a 7-month low of 55.4 in March from 57.5 in February. Strengthening demand and receipt of orders in bulk underpinned a further rise in overall sales, making manufacturing upturn for the eighth straight month.

PSU banks pass on entire policy rate cut… Public sector banks have passed on almost the entire policy rate cut on fresh loans since the beginning of the pandemic. The weighted average lending rate for fresh rupee loans has dipped 114 basis points, or 1.14 percentage points when the policy repo rate has fallen 115 basis points. Private sector banks, on the other hand, have passed on just a third of the policy rate cuts.

Overseas Indians try to skirt new tax… Many wealthy Indians with businesses and jobs abroad are trying to get around the country’s new tax rule that targets the global income of its citizens. These individuals are booking a slice of their income in jurisdictions like Singapore and Hong Kong to pay a small tax there in the hope that they would escape the glare of the Income Tax (I-T) department in India. Whether their aggressive strategy pays off would depend on how sternly tax officials interpret the law.

Banks may see big spike in bad loans… Bad loans of Indian banks could rise significantly in the current fiscal year as the government and the RBI roll back regulatory and fiscal support measures, according to rating firm ICRA. Banks could see gross bad loans rise to 9.7% of advances in FY21 and 10.2% by the end of FY22, ICRA said in a report. “While the headline asset quality and restructuring numbers are encouraging, these don’t reflect the underlying stress on the asset quality of banks,” said Anil Gupta, sector head-financial sector ratings at ICRA.

85% insolvency cases dragging… Over 85% of the ongoing corporate insolvency cases have dragged beyond 270 days, which was the upper limit for finalisation of the process. Latest data released by the Insolvency & Bankruptcy Board of India (IBBI) on Monday showed that up to December, 1,481 of the 1,717 pending cases had extended beyond 270 days. The four-year-old Insolvency & Bankruptcy Code — which is credited with changing the debt repayment culture — had provided for resolution within 180 days, with a possible extension of another 90 days. But, adjournments and multiple legal challenges in cases have meant that they usually go past the prescribed timelines.

NBFCs want essential services tag… Non-bank lenders and housing finance companies have approached the Maharashtra government and sought permission to function their offices and branches with at least 30% staff strength. NBFCs have requested they should be treated on par with banks and included in the essential services category. The state government, which announced a month-long shutdown on Sunday, has exempted banks, stock exchanges, asset management companies and insurance firms from closure of offices.

FDI equity inflows up 28%... FDI equity inflows into the country during April-January 2020-21 grew 28% to $54.2 billion, according to the commerce and industry ministry data released on Monday. Foreign direct investment (FDI) inflows during April-January 2019-20 stood at $42.3 billion. Total FDI (which includes reinvested earnings) during the 10-month period in FY21 increased by 15% to $72.1 billion over the year-ago period.

Auto, CD sales hit… Sales of automobiles, consumer durables, smartphones and apparel – which have been recovering since the easing of the nationwide lockdown last year – will be adversely impacted with the Maharashtra government announcing a partial lockdown to check the spread of Covid-19 cases, causing disruption in sales around Gudi Padwa, a spring-time festival that marks the traditional new year for Maharashtrians.