What changed for D-Street while you were sleeping

NEW DELHI: Domestic stocks are looking to build on the recovery seen on Monday after Saturday's post-Budget crash. Going by the trend Nifty futures reflected in Singapore trade, Dalal Street is likely to see a good start. Softer oil prices should help sentiments.

Here’s breaking down the pre-market actions.

TRADE SETUP

Singapore trading sets stage for positive start
Nifty futures on the Singapore Exchange traded 46.50 points, or 0.40 per cent, higher at 11,754, indicating a positive start for Dalal Street.

Tech view: Nifty resistance at 11,750
Nifty50 recovered from Saturday's selloff on Monday and closed above 11,700. The index formed a small bullish candle on the daily chart. But analysts were not convinced about the rebound. They see immediate resistance for the index at 11,750 level and advised a ‘sell on rise’ strategy.

Asian stocks steady in early trade
A fragile calm gripped Asian shares on Tuesday as investors waited anxiously to see if Beijing could stem the rout in Chinese assets, while oil hit 13-month lows as the coronavirus throttled demand in the world's biggest importer of fuel. Early Tuesday, MSCI's broadest index of Asia-Pacific shares outside Japan inched up 0.1 per cent, led by gains in South Korea and Australia. Japan's Nikkei pared opening losses to be off 0.2 per cent.

US markets settle higher
US stocks rallied on Monday, boosted by heavyweight technology shares and on surprise strength in U.S. manufacturing activity, following a sharp selloff last week on concerns about the economic impact from the fast-spreading coronavirus out of China. The Dow Jones Industrial Average rose 143.78 points, or 0.51 per cent, to 28,399.81, the S&P 500 gained 23.4 points, or 0.73 per cent, to 3,248.92, and the Nasdaq Composite added 122.47 points, or 1.34 per cent, to 9,273.40. Microsoft shares rose 2.4 per cent, leading a 1.3 per cent rise for the S&P 500 technology sector.

Investors rush to high dividend yield stocks
Shares of traditionally high-dividend payers rallied on Monday on expectations that these companies could announce interim dividends in March before the new Budget proposal, which makes dividend income taxable in the hands of the recipients, becomes applicable from April. Thyrocare Technologies, with a dividend payout ratio of 111%, gained 13% to Rs 603 while Castrol, with a payout ratio of 70%, rallied 6% to Rs 147. Other high-dividend paying stocks such as Asian Paints, Pidilite Industries, Hindustan Unilever, Nestle, GSK Consumer, Bajaj Auto and Britannia Industries gained between 4% and 6%, outrunning the modest 0.3% rise in the Sensex.

Crude oil futures crash
Crude oil prices hit 13-month lows, as the coronavirus throttled demand in the world’s biggest importer of fuel. Brent crude futures crashed to $54.11 a barrel, bringing losses for the year so far to 18%, while US crude sank to $49.99

FPIs sell Rs 1,200 crore worth of stocks
Net-net, foreign portfolio investors (FPIs) were sellers of domestic stocks to the tune of Rs 1,200 crore on Monday, data available with NSE suggested. DIIs were net buyers to the tune of Rs 1,286.62 crore, data suggests.

MONEY MARKETS

Rupee: The rupee pared early sharp losses to settle 6 paise down at 71.38 against the US dollar on Monday, tracking recovery in domestic equities and easing crude oil prices.

10-year bonds: India 10-year bond yield down 1.45 per cent to 6.51 after trading in 6.49-6.52 range.

HAPPENING TODAY

• Q3 Earnings: Adani Ports | Adani Green | Airtel | CSB Bank | Cipla | DLF | Divi's Lab | HPCL | V-Mart
• RBI Money Policy Review Starts
• US Jan Auto Sales Numbers
• US Dec Factory Orders
• UK Jan Construction PMI

MACROS

Manufacturing PMI shows green shoots
India’s manufacturing activity expanded at its quickest pace in nearly eight years in January on sharp rises in new business and production that gave employment a boost, a private survey showed on Monday. Jobs grew at the quickest rate in close to seven-and-a-half years. The IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) jumped to 55.3 in January from 52.7 in December. It was the highest reading since February 2012 and above the 50 mark that separates growth from contraction for the 30th straight month.

FPIs scramble to seek safety
Foreign portfolio investors from Mauritius and Cayman Islands are scrambling to protect their investments after the government changed the rules on taxation of indirect transfer of shares. They are considering to either recategorise themselves to continue under the liberalised regime or appointing a fund manager in Singapore or London so that they don’t fall foul of tax laws. In Saturday’s Budget, the government changed the rules on indirect transfer of shares, saying that only those registered under Sebi’s Category-1 scheme will be exempt from tax.

AGR dues not facted in Budget
The government has not included AGR dues payment in the Budget 2020-21, Economic Affairs Secretary Atanu Chakraborty said on Monday. It is pertinent to mention here that 15 entities owe the government about Rs 1.47 lakh crore in past dues -- Rs 92,642 crore in unpaid licence fee and another Rs 55,054 crore in outstanding spectrum usage charges.

Govt readies Rs 45,000 cr Make-in India push
The Centre is readying a Rs 45,000 crore fund in an aggressive push to ensure big firms such as Apple, Samsung, Huawei, Oppo and Vivo, besides contract manufacturers like Foxconn and Wistron, bring their global supply chains to India and make the country an electronics manufacturing hub in the next five years. Out of the Rs 45,000 crore fund, about Rs 41,000 crore would be disbursed to companies based on production-linked incentive criteria, while the remaining Rs 4,000 crore would be offered under a capital subsidy, or reimbursement, scheme.

Sebi may tighten Open Offer rule
Sebi has proposed that in case of any delay in an open offer, the acquirer will have to pay an additional 10% interest to all the shareholders over and above the offer price. The regulator on Monday said that there have been instances where open offers get delayed because of disputes among the parties, agreement on valuations, and investor complaints. There are also likely delays in commencing the tendering process, or making payments upon tendering the shares under the open offer. At present, the takeover code does not envisage delays in open offers other than on account of nonreceipt of statutory approvals.

Opec-plus eyes output cut
Opec and its allies are considering cutting oil output by a further 500,000 barrels per day (bpd) due to the impact on oil demand from the coronavirus, three Opec officials and an industry executive familiar with the discussions said. Oil has fallen $10 a barrel this year to $56. The Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, are considering holding a ministerial meeting on February 14-15, earlier than a current schedule for a meeting in March. Oil has fallen $10 a barrel this year to $56, lower than the level many OPEC countries need to balance their budgets.