Hi there! Welcome to ETMarkets Morning, the show about money, business and markets. I am Sandeep Singh, and here is what we have to start your day.
>> Valuation worries haunt Dalal Street
>> Industrial output slows in November
>> Tesla enters India with big plans
>> Govt looks to buybacks and, dividends to boost revenue
And there is more. But first, a quick glance at the state of the markets..
>> Nifty futures on the Singapore Exchange traded 45.05 points, or 0.31 per cent, higher at 8 am (IST), signalling a positive bias on Dalal Street.
>> Asian stocks opened mixed on Wednesday, tracking modest Wall Street gains. Japan's Nikkei 225 index was up 0.11%, Australia's S&P/ASX 200 benchmark down 0.1%, and South Korea’s Kospi up 0.64%.
>> On Wall Street, stocks fluctuated overnight, but were not far from their record highs. The Dow Jones industrial average rose 0.19%, the S&P 500 gained 0.04% and the Nasdaq 0.28%.
IN OIL MARKET
>> Brent crude prices hit their highest since February as tighter supply and expectations of a drop in US inventories offset concerns over rising Covid-19 cases globally. Brent crude oil rates rose 1.62% on the day, while the West Texas Immediate contract gained 1.76% to $53.17 a barrel.
>> The rupee recouped early losses on Tuesday, provisionally closing 15 paise higher at 73.25 against the US dollar, supported by weakness in the dollar index and recovery in domestic equities.
>> The dollar extended overnight losses after hitting its highest since December. The dollar index fell 0.463%, while the euro rose 0.45% and the Japanese yen 0.49%
AND IN BULLION
>> Gold prices rose in the national capital for the second consecutive day gaining Rs 297 to Rs 48,946 per 10 gm, in line with rally in international precious metal prices. Silver rose by Rs 1,404 to Rs 65,380 a kg. In international markets, safe-haven spot gold added 0.6% to $1,855.46 an ounce. Silver rose 2.49% to $25.54.
All in all, the trade setup on Dalal Street looked weak. On Monday, Nifty50 formed a higher high for the 13th session in a row. Analysts said nothing concrete on the technical charts suggests the index's ongoing rally is in danger.
LET ME NOW GIVE YOU A HEADS-UP on some of the top news we are tracking at this hour.
... India's stock indices have been on a record-breaking spree in recent weeks. This unhindered run-up has pushed their valuations to the highest levels ever, intensifying investor concerns over the market’s outlook. Nifty is trading at an estimated P/E ratio, a popular valuation measure, of 28 times — a record — as it closed at a high of 14,563 on Tuesday. Nifty’s premium is at 48% to its five-year average estimated PE of the past. This is the second time the Nifty forward PE premium over its fiveyear average has crossed 40%.
... The government will rely on proceeds from buybacks and dividends from public sector enterprises to shore up non-tax revenues as key strategic divestments, including Air India and BPCL, are likely to conclude only in the next financial year, said officials. However, the additional proceeds would still be much less than adequate to meet the mammoth target of Rs 2.1 lakh crore set for 2020-21, they said.
... Tesla, the world’s most valued carmaker, has incorporated a fully owned subsidiary in India as a first step to set up an R&D unit and a manufacturing plant for its electric vehicles in the country. Tesla’s global senior director David Jon Feinstein, chief accounting officer Vaibhav Taneja and Bengaluru-based entrepreneur Venkatrangam Sreeram are on the board of the India unit, Tesla India Motors and Energy.
... The Supreme Court “suspended” the "implementation" of three farm laws in a bid to persuade farmers agitating against them to come to the “negotiating table.” It also set up a four-member expert committee to “negotiate” between the farmers and the government. Farmers’ groups, pushing for repeal, have said they won't appear before the committee.
... Industrial production contracted in November after two months of expansion, raising some doubts over strength of recovery, but a sharp fall in consumer inflation in December will allow RBI to keep interest rates soft to help the economy revive. Industrial output, as measured by the IIP, shrank 1.9% in November, while retail inflation eased to a 15-month low of 4.59% in December, from 6.93% in the previous month.
LASTLY, AN UPDATE ON ALL THE STOCKS BUZZING THIS MORNING
· Amazon has challenged the Delhi High Court’s recent observation that Reliance Retail’s deal to acquire the assets of Future Retail was valid.
· Bharti Airtel on Tuesday said pursuant to the FDI approval in January 2020 granted to it by the DoT, the company has received necessary approvals for its relevant downstream investments.
· Tata Motors, whose sales grew 11% in 2020, is looking to leverage the popularity of SUVs to sustain the momentum this year by widening its portfolio with the launch of two new SUVs
· IndiGo said on Tuesday it plans to start new flights connecting Leh, Darbhanga, Agra, Kurnool, Bareilly, Durgapur and Rajkot from February onwards
· RITES on Tuesday said it has won a Rs 68 crore contract from National High-Speed Rail Corporation.
That’s it for now. For all the market news through the day, do track ETMarkets.com. Have a great day ahead! Bye-bye