What changed for D-Street while you were sleeping

NEW DELHI: If one were to go by FPIs’ F&O positions, Nifty may have made a near-term bottom. This along with the fact that markets globally are in a recovery mode make a few market participants believe that the rebound in domestic stocks may sustain.

Here’s breaking down the pre-market actions.

TRADE SETUP

Singapore trading sets stage for weak start
Nifty futures on the Singapore Exchange traded 22 points, or 0.09 per cent, lower at 11,962.50, indicating weakness ahead on Dalal Street.

FPI F&O positions hint at Nifty rebound
The rebound in the Nifty after a sharp fall on the Budget day may sustain in the near-term going by the trend in the long-short ratio of foreign portfolio investors (FPIs). The ratio dropped to 0.3 in the current derivatives series, a rare reading in the past seven years indicating a bottom.

Nifty hurdle seen in 11,990-12,020 range
Nifty50 on Tuesday vaulted 272 points to close near the 12,000 mark. In the process, the index breached its five-day exponential moving average (EMA) and formed a solid bullish candle on the daily chart. The index needs to breach the 11,990-12,020 range for further upside, analysts said.

Asian markets rise in early trade
Asian stocks steadied on Wednesday in hopes of additional Chinese stimulus to lessen the economic impact of a coronavirus outbreak, but risks remain as the illness continues to spread and the death toll neared 500. MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.3 per cent. Australian shares were up 0.58 per cent, while Japan's Nikkei stock index rose 1.19 per cent.

Tech stocks lifted US market overnight
US stocks finished significantly higher, adding to the previous session's rebound, fueled by solid gains in technology shares. On Tuesday, the Dow Jones Industrial Average index jumped 407.82 points, or 1.44 per cent, to 28,807.63. The S&P500 index went up 48.67 points, or 1.5 per cent, to 3,297.59. The Nasdaq Composite index soared 194.57 points, or 2.1 per cent, to 9,467.97.

Oil prices climb as OPEC, allies weigh output cuts
Oil prices rose, reversing out of a 1 per cent slump in the previous session, boosted by producers weighing further output cuts to counter a potential squeeze on global oil demand resulting from China's fast-spreading coronavirus. Brent crude oil futures were up 44 cents, or 0.8 per cent, to $54.40 a barrel level.

Cipla, DLF to report Q3 earnings today
Cipla, HPCL, DLF, Berger Paints, Adani Enterprises, Gujarat Gas, Divi’s Labs, Siemens, Adani Gas, Bosch, Godrej Agrovet, Max Financial and Apollo Tyres are some of the companies which will report their December quarter earnings today.

DIIs buy Rs 602 crore worth stocks
Net-net, foreign portfolio investors (FPIs) were buyers of domestic stocks to the tune of Rs 366 crore on Tuesday, data available with NSE suggested. DIIs were net buyers to the tune of Rs 602 crore, data suggests.

MONEY MARKETS

Rupee: The Indian rupee moved up by 13 paise to close at 71.25 against the US dollar on Tuesday as forex market participants gauged improved sentiment in global markets amid efforts to contain deadly coronavirus.

10-year bonds: India 10-year bond yield remained flat at 6.51 after trading in 6.49-6.51 range.

Call rates: The overnight call money rate weighted average stood at 4.94 per cent, according to RBI data. It moved in a range of 3.70-5.25 per cent.

HAPPENING TODAY

• Q3 Earnings: Adani Gas | Cipla | DLF | Divi's Lab | EIL | HPCL | Indiabulls Housing | VMart | Andhra Bank | Apollo Tyre | Berger Paint
• India Markit Services PMI for Jan
• US Jan total vehicle sales
• API Crude Oil Stock Change for Jan
• BoJ Wakatabe Speech
• China Jan Services PMI
• ECB President Lagarde Speech

MACROS

China services sector PMI at 3-month low
Growth in China's services sector slowed for a second straight month in January, a traditionally busy sales season, hitting a three-month low as companies cut prices and new orders dipped, a private sector survey showed on Wednesday. The Caixin/Markit services purchasing managers' index (PMI) slowed to 51.8 last month from 52.5 in December but was still higher than an 8-month low hit in October.

10% DDT to be slapped on MF gains
CBDT has clarified that mutual funds will only deduct a 10% tax at source on the dividend payment, and not on the capital gains arising from redemption of units. “A mutual fund shall be required to deduct TDS @10% only on dividend payment, and no tax shall be required to be deducted by the mutual fund on income which is in the nature of capital gains,” CBDT said on Tuesday. The Finance Bill has proposed to scrap DDT at the company level and instead move to the classical system of taxing dividend at the hands of shareholders.

ZEE books under MCA lens
The Ministry of Corporate Affairs has directed its western region head to inspect the books of Zee Entertainment Enterprises. The inquiry comes after the resignation of two independent directors, who had raised corporate governance issues. According to people in the know, the inquiry will be carried out in accordance with a provision in the Companies Act that allows the ministry to seek information or explanation in writing, or documents, from a company.

Sebi may reclassify midcap, smallcap MF plans
The Securities and Exchange Board of India (Sebi) is looking at reclassification of mid-cap and small- cap mutual fund schemes, chairman Ajay Tyagi said on Tuesday. The move is aimed at allowing these products to invest in a wider set of stocks, said mutual fund industry officials.

High penalty on firms for tax frauds
There’s now a heavy price to pay for a common tax fraud many businesses indulge in. Fake bills to lower profits and evade tax through artificial expenses will attract a stiff penalty from the next financial year. Companies caught with false entries in their account books will have to cough up a penalty as high as the total value of such an invoice — over and above the amount of tax it will have to pay. Earlier, a fake entry of Rs 10 crore would have led to a total outgo of Rs 6-8 crore (including tax and penalty); now, it will be Rs 14 crore (including penalty of Rs 10 crore).

Taxpayers can switch regimes
Taxpayers can switch back and forth between the existing income tax regime and the new one that offers lower slabs without exemptions, CBDT chairman PC Mody said. However, business owners won’t have this option. “Let it be very clearly noted that this is an optional scheme — there’s no compulsion for you to go to the new scheme,” he said. “If you find the new scheme preferable, you can move to it. If you’re better off in the old system, then you can continue.