SGX Nifty: SGX Nifty trades 95 points higher; here’s what changed for market while you were sleeping

NEW DELHI: Data showing a strong Rs 19,000 crore inflows from FPIs on Thursday has come as a confidence booster for Dalal Street. A positive start to other Asian markets may also help boost sentiment.

Here’s breaking down the pre-market actions.



TRADE SETUP

Singapore trading sets stage for positive start

Nifty futures on the Singapore Exchange traded 95.30 points or 1.04 per cent higher at 9,284.30, indicating a positive start for Dalal Street.

Tech view: Nifty forms Spinning Top candle

On Wednesday, Nifty took support in the 20-day moving average, whose value is placed at 9,133. Analysts said this level would offer support to the index in the immediate terms. They see 9,350 as the immediate resistance level for the NSE barometer.

Asia markets off to positive start

Japan’s Nikkei 225 index rose 1.58 per cent or 311.04 points to 19,986.27 in early trade. China’s Shanghai Composite index added 0.39 per cent, or 11.18 points, to 2,882.71 while Hong Kong’s Hang Seng index gained 0.89 per cent, or 212.73 points, to 24,193.36.

Oil prices gain on ease in virus-led lockdowns

Oil prices rose on Friday as more countries began easing lockdowns set in place to stop the coronavirus spreading, giving hope that demand for fuels will pick up after the economic devastation caused by the pandemic. Brent crude was up 47 cents, or 1.5 per cent, at $29.33 a barrel, having fallen nearly 1% on Thursday.

US stocks gained amid weak jobs data

On Thursday, the Dow Jones Industrial Average jumped 211.25 points, or 0.89 per cent, to 23,875.89. The S&P 500 increased 32.77 points, or 1.15 per cent, to 2,881.19. The Nasdaq Composite Index advanced 125.27 points, or 1.41 per cent, to 8,979.66. The gains were seen even as 3.169 million Americans filed for unemployment benefits in the week ending May 2.

Q4 earnings today

Reliance Capital, SBI Cards & Payment Services, Adani Gas,Reliance Power, Reliance Infrastructure, Reliance Home Finance: These companies are scheduled to announce their March quarter earnings on Friday.

FIIs buy Rs 19,056 cr worth of stocks

Net-net, foreign portfolio investors (FPIs) were buyers of domestic stocks to the tune of Rs 19,056.49 crore on Thursday, data available with NSE suggested. DIIs were net buyers to the tune of Rs 3,818.41 crore, data suggests.

MONEY MARKETS

Rupee: Forex market to remain shut on Thursday on account of Buddha Purnima. The rupee depreciated 9 paise to close at 75.72 against the US dollar on Wednesday due to growth concerns as a survey showed that the services sector contracted in April.

10-year bonds: India 10-year bond yield fell 0.74 per cent to 6.02 after trading in 6.02-6.06 range.

Call rates: The overnight call money rate weighted average stood at 3.95 per cent, according to RBI data. It moved in a range of 2.30-4.50 per cent.

HAPPENING TODAY

• Q4 Earnings: SBI Card | Shree Cement | Adani Gas | RCap
• India Bank Deposit Growth YoY April (05:00 pm)
• RBI Foreign Exchange Reserves May (05:00 pm)
• Japan March Household Spending (05.00 pm)
• US April Unemployment Rate (06.00 pm)
• Baker Hughes Oil Rig Count (10.30 pm)

MACROS

Tax relief likely on forced residency
India could provide relief to individuals who have technically become resident in the country because they’ve been forced to extend their stay due to the lockdown. This will make their global income liable to tax in India under the Income Tax Act. “A clarification will be issued soon,” said a government official, reports ET. The Central Board of Direct Taxes (CBDT) is examining the issue. The period of overstay in India due to the lockdown could be exempted, a formula prescribed by the OECD, which drafts global tax rules, said a person familiar with the matter.

Cash in circulation swells in Jan-Apr

Rising economic uncertainties forced people to hoard more cash in the first four months of the calendar than they had done in the entire 2019, data released by the Reserve Bank of India (RBI) shows, reports
Business Standard. The increase in currency in circulation between January and May 1 was Rs 2.66 trillion. In comparison, it increased by Rs 2.40 trillion in the entire 2019 (January to December).

UP suspends most labour laws for 3 years

Uttar Pradesh has suspended labour laws for the next 3 years, in a move that the state government says is aimed at boosting industrial investment as well employing the large number of migrant workers that have come back to their native villages in the state. The government has accordingly passed an ordinance to this effect that will apply to all factories and manufacturing facilities as well as fresh investments coming into the state. The ordinance however will not apply to certain laws like the Bonded Labour Act, Building and other Construction Workers Act, Section 5 of Payment of Wages Act and Workmen Compensation Act. Labour laws related to children and women will also not be affected.

Costly labour to burn hole in India Inc books

India Inc and hundreds of small and medium businesses across the country are grappling with surging labour costs as workforce shortage intensifies and wages are increased to keep migrants from leaving for villages. Business leaders and corporate executives told ET that the problem is evident in sectors such as construction, consumer goods and e-commerce, and may hit the major manufacturing sectors once these resume full-scale operations after the lockdown ends. Wages for e-commerce delivery and warehouse staff have increased 50-100% so far, and though the situation has normalised, there has been no across the-board improvement. Flipkart and Amazon are shouldering wage increases of 75-100% while Grofers said it was paying 25-50% more.

UK economy may see biggest crash in 300 yrs

The Bank of England held off further stimulus measures but said it was ready to take fresh action to counter the coronavirus hammering which could cause the country’s biggest economic slump in over 300 years in 2020 before a bounceback in 2021. The BoE said its Monetary Policy Committee kept Bank Rate at its all-time low of 0.1% and left its target for bond-buying, most of it British government debt, at 645 billion pounds ($797 billion). However, two of its nine policymakers – Michael Saunders and Jonathan Haskel – voted for 100 billion pounds’ worth of more bond-buying firepower.

Auto Inc hits roads hoping for revival

Mahindra and Mahindra, Maruti Suzuki, Hyundai and Hero MotoCorp – leading car and bike-makers that have strong rural footprints – are gearing up to sell more in Bharat, which can help counterbalance the shortfall in demand in the cities. That includes novel financing proposals. “In the current scenario, rural markets will grow faster than urban pockets,” said Ramesh Iyer, Managing Director of Mahindra Finance. Migrants who have gone back will need an alternative source of income enabling pickups, 3-wheelers and LCVs to sell faster in rural markets. Finance companies are working on higher quantum of loans with longer tenures for such classes of buyers, including a new product which is being designed for a first-time buyer.

Investors retract from FPIs, PE funds
Many investors who had committed money to foreign portfolio investors and private equity funds for investing in India are holding back or deferring to get a grip on value erosion in their portfolios, conserve cash and have clearer visibility on the impact of Covid-19 on global economic activity. Several sovereign wealth funds, pension funds, university endowments, limited partners, corporate investors and high net worth individuals have reached out to FPIs and PE fund managers in the last few weeks to convey their decision to partially or fully defer their commitments, people in the know said.

Senators ask Trump to suspend H-1B visas

Four US Senators have urged President Donald Trump to suspend all non-immigrant work permits for at least a year or till employment levels return to normal. They have also asked for the suspension of the Optional Practical Training (OPT) programme which lets foreign students in science, technology, engineering and mathematics (STEM) work in the United States for up to three years after graduating. In 2019, over 223,000 people had their OPTs approved or extended. They also want the EB-5 investor visa program to be suspended. “These suspensions are critical to protecting American workers as our economy gets back on its feet,” Republican Senators Ted Cruz, Josh Hawley, Charles E Grassly and Tom Cotton wrote in a letter to Trump on Thursday.