Stock Market News Briefing: ETMarkets Morning Podcast: FPIs turn cautious on D-St & other market-moving news

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.

>> Price rise brings out Demonetisation gold
>> FPIs turn cautious, go net-short on Index futures
>> Fed says interest rates to stay low at least till 2023
AND
>> Passive investors go gung-ho, lift ETFs asset to Rs 1 lakh cr

And there is more.
But first, a quick glance at the state of the markets…

>> Nifty futures on the Singapore Exchange traded 83 points lower at 7 am (IST) this morning, signalling a weak start ahead for Dalal Street.

ELSEWHERE,

>> Asian stocks fell with US and European futures on Thursday after Fed Chair Jerome Powell highlighted uncertainty about the economic rebound. Shares in Japan, Hong Kong and South Korea dipped, with stocks in the region on course to end a five-day positive run. Hong Kong’s Hang Seng fell 0.2%, Shanghai Composite 0.2% and Kospi 0.4% and Australia’s S&P/ASX 200 Index 0.7%.

>> US shares rose with the Fed’s statement, which came after a two-day policy meeting, but then reversed gains after Fed Chairman Jerome Powell said the economic recovery is ongoing but the pace is expected to slow. The S&P 500 fell 0.46% and the Nasdaq 1.25%, with technology shares leading the decline.

IN OIL MARKET

>> Crude oil prices remained around $40 a barrel in New York in the wake of government data showing shrinking US crude stockpiles. WTI crude added 0.1 per cent to $40.20 a barrel after jumping 4.9%.

IN CURRENCY MART
>> The rupee strengthened by12 paise to settle at 73.52 against the US dollar on Wednesday supported by positive domestic equities and weak American currency.

>> The dollar advanced against its major peers. The euro slipped 0.3 per cent, the yen 0.1 per cent and the offshore yuan 0.2%

IN BULLION

>> Gold prices fell to Rs 54,980 per 10 gm on Thursday, while silver trended at Rs 69,000 a kg. In New Delhi, the price of 22-carat gold remained at Rs 50,400. On MCX, October gold futures climbed 0.11 per cent to Rs 51,824 per 10 gm, while silver December futures traded at Rs 68,781 a kg. In international market, the yellow metal slid 0.1 per cent to $1,957.62 an ounce.

All in all, Dalal Street looked headed for a weak start. On Wednesday, Nifty50 rose for the second straight session and formed a bullish candle on the daily chart. Analysts said it has the potential to move towards its August high of 11,794 in the coming sessions.

LET ME NOW GIVE YOU A HEADS-UP on some of the top news we are tracking at this hour.

… The gold that had changed hands four years ago, in a flurry of panic deals on the night of Demonetisation, is now finding its way back into the market. As the price of the yellow metal surged amid a hunt for a safe-haven asset and the uncertainty caused by the Covid-19 pandemic, people who had bought gold to launder unaccounted cash on November 8, 2016, are offloading it in the market

… A sleepy Caribbean island country is emerging as a preferred gateway for various foreign investors to route their investments into India. With the Sebi tweaking rules for overseas funds with opaque structures in 2019 and foreigners finding little incentive to invest in the country’s stocks through tax-friendly jurisdictions, Cayman Islands are gaining popularity for relatively lower operational costs. The country does not have a tax treaty with India. Currently, there are 329 FPIs investing in India through the Cayman Islands against less than 100 until a few years ago.

… The Federal Reserve left interest rates near zero and signalled it would hold them there through at least 2023 to help the US economy recover from the coronavirus pandemic. The Federal Open Market Committee “expects to maintain an accommodative stance of monetary policy” until it achieves inflation averaging 2% over time and longer-term inflation expectations remain well anchored at 2%, the central bank said.

… India’s mounting Covid cases and simmering border tensions with China haven’t dissuaded foreign inflows into the cash market. But as an early sign of caution, FIIs have turned net short index futures — Nifty and Bank Nifty — for the first time since July 16. On Wednesday, FIIs net shorted index futures by a cumulative 1,309 contracts, NSE data showed, to hedge their cash positions.

… Exchange-traded funds, which aren’t actively managed, mimic the index and have far less intervention from a money manager. Yet, the industry has expanded about 30 times in the past five years, albeit on a negligible starting base. Assets under management of the ETFs tracking the Nifty 50 now account for about Rs 1 lakh crore, about half the corpus for the ETF industry.

… RBI governor Shaktikanta Das warned that India’s economic recovery will be gradual and argued strongly in favour of protecting the interest of depositors amid a contentious Supreme Court hearing on waiver of interest during the loan-moratorium period. India’s lead economic indicators, which had shown an uptick in June and July, appear to be levelling off, Das said at an event organised by Ficci on Wednesday.

LASTLY, AN UPDATE ON ALL THE STOCKS BUZZING THIS MORNING

NBFC Clix Capital expects to complete its due diligence of LVB in two to four weeks, following which it will formally apply to RBI for approval, Chairman Pramod Bhasin told ET.

Tata Projects is set to win the contract to build India’s new Parliament building as a part of the government’s Central Vista redevelopment plans, beating Larsen & Toubro.

Happiest Minds is set to make its debut on the bourses on Thursday. The issue, which was sold between September 7 and September 9 in the price band of Rs 165-166, was subscribed 151 times.

Bandhan Bank has recreated a broader vertical called ’emerging entrepreneurs business’, which includes its microbanking division, micro home loan and micro enterprise loans.

Marico has extended its edible oil brand Saffola into Ayurveda by launching immunity boosting products – kadha and milk mix – to cash on the increased awareness and interest in such products

That’s it for now. For all the market news through the day, do track ETMarkets.com. Have a great day ahead! Bye-bye

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