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What changed for Market while you were sleeping

Nifty on Monday formed a bearish candle on the daily chart for the third straight session.

ETMarkets.com|
Last Updated: Feb 18, 2020, 09.43 AM IST
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AFP
China-stock-market-2---AFP
Sebi on Monday said it is actively looking at re-categorisation of mid cap and small cap mutual fund schemes.
NEW DELHI: Concerns over coronavirus intensified on Tuesday after US-based Apple said it might not meet March quarter revenue guidance. Brazil also warned of implications of the virus outbreak on its economy, while Japan said it was closely following the developments. These events are likely to have a bearing on stock investor sentiment.

Here’s breaking down the pre-market actions.


TRADE SETUP

Singapore trading sets stage for negative start
Nifty futures on the Singapore Exchange traded 29.50 points, or 0.24 per cent, lower at 12,43.50, indicating a negative start for Dalal Street.

Tech view: Nifty forms bearish candle for third day
Nifty on Monday formed a bearish candle on the daily chart for the third straight session. The index closed below its 20-day simple moving average (SMA) of 12,059 and made a lower low formation for yet another day, suggesting supports were shifting lower. Analysts said any sustained move below 12,000 could bring the bears back.

Asian stocks, S&P 500 futures fall in early trade
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.20 per cent while Japan's Nikkei slid 0.59 per cent. S&P500 e-mini futures dipped as much as 0.2 per cent in early Asian trade. The sentiment was hurt after Apple Inc said it will not meet its revenue guidance for the March quarter. Many factories have yet to re-open, disrupting supply chains in China and beyond.

US markets closed on Monday
US markets were shut on Monday on account of Washington's Birthday. On Friday, the Dow dropped 25.23 points, or 0.1 per cent, to 29,398.08. The S&P500 index rose 6.22 points, or 0.2 per cent, to 3,380.16. The Nasdaq Composite index gained 19.21 points, or 0.2 per cent, to 9,731.18.

Oil prices slip in early trade
Oil prices slipped on Tuesday on lingering concerns over the economic impact of the coronavirus outbreak in China and its effect on oil demand, tracking losses in financial markets. Brent crude was at $57.30 a barrel, down 37 cents, or 0.6 per cent.

FIIs sell Rs 374 crore worth of stocks
Net-net, foreign portfolio investors (FPIs) were sellers of domestic stocks to the tune of Rs 374 crore on Monday, data available with NSE suggested. DIIs were net sellers to the tune of Rs 154 crore, data suggests.

MONEY MARKETS

Rupee: The Indian rupee on Monday settled 5 paise higher at 71.32 against the US dollar, helped by some moderation in crude prices.

10-year bonds: India 10-year bond yield rose 0.30 per cent to 6.39 after trading in 6.34-6.40 range.

Call rates: The overnight call money rate weighted average stood at 4.96 per cent, according to RBI data. It moved in a range of 3.70-5.25 per cent. (price not updated on portal)

HAPPENING TODAY

  • UK Dec Unemployment Rate
  • US Feb NAHB Housing Market Index
  • China Jan Outstanding Loan Growth
  • China Jan New Yuan Loans

MACROS

NCDs turn more attractive
The difference between returns from bank fixed deposits and lower-rated non-convertible debentures (NCDs) has hit the highest level in a decade. Finance companies such as Shriram Transport Finance, IFCI and IIFL Finance, which do not enjoy top-notch credit rating, could deliver 4-6% higher returns than the highest interest rate offered by a SBI fixed deposit. Financial planners said the disparity in the rates makes a case for investment in NCDs of select finance companies.

Long queue of suitors for DHFL
About two-dozen potential buyers, including the Adani Group, KKR, Warburg Pincus and Oaktree Capital, on Monday put in non-binding initial bids to purchase troubled mortgage lender DHFL. While the Adani Group, Oaktree Capital, ARCIL, KKR India and Welspun Group bid to buy the entire business, Edelweiss, Kotak Mahindra Bank-led Phoenix ARC and distressed asset funds Varde Partners and SC Lowy have shown interest to buy specific portfolios. The DHFL administrator sought bids in two categories. Under the first option, companies bid to buy the entire business of DHFL while in the second category, they could choose from the retail, wholesale and slumrehabilitation portfolios.

Steps to prevent Karvy-like incident soon
The market regulator will soon come out with a circular to prevent incidents like Karvy Broking Services (KSBL), which had allegedly misused clients's securities. Sebi chief Ajay Tyagi asserted that whatever action required will be taken. "We will just wait and see," he said, referring to the dues to be paid by KSBL

MNCs seek to duck DDT hit
MNCs in India have reached out to their tax advisers seeking to know the exact tax payable on dividends under existing tax treaties and if the status of most favoured nation would lead to additional benefits. Several persons in the know said the MNCs are analysing total tax on dividends with respect to the tax treaties and the most favoured nation status of the source country. Many would now fall back on the tax treaties and could be looking to postpone their dividend payouts till April this year.

SC deals fresh blow to Voda Idea
The Supreme Court on Monday rejected Vodafone Idea’s appeal to direct the telecom department not to invoke its bank guarantees for recovering adjusted gross revenue (AGR)-related dues, leaving the beleaguered telco on the brink of a possible collapse. “...if the bank guarantees get encashed tomorrow, then the company will have to close,” Vodafone Idea’s counsel Mukul Rohatgi told a TV channel. Officials said the DoT is seeking the law ministry’s opinion on whether the bank guarantees can be encashed before the next date of hearing in the SC to recover part of the dues.

Moody's lowers India outlook
Ratings agency Moody's has slashed its 2020 growth projection for India to 5.4% from 6.6% forecast earlier on the back of slower recovery, citing largely domestic factors and cautioning that global economy will be adversely impacted by the novel coronavirus outbreak. It has also revised downward the GDP growth forecast for China to 5.2% in 2020, warning severe downside risks to the global economy if the coronavirus grows to pandemic proportions. In 2021, India is forecast to grow 5.8% against 6.7% estimated earlier.

Recategorisation of mutual funds likely
Sebi on Monday said it is actively looking at re-categorisation of mid cap and small cap mutual fund schemes. It is expected that the regulator would ease framework to include more stocks under the small- and mid-cap category, experts added. In order to bring uniformity, the board has also decided to allow sponsor or asset management company (AMC) to invest in close-ended mutual fund schemes.

Sebi tightens norms for investment advisers
Under the revised framework for investments, those dealing in distribution of securities would be barred from using titles like independent "financial advisers" or "wealth advisers", unless they are registered as investment advisers. An individual adviser cannot provide distribution services, while firms would need to segregate advisory and distribution activities at client level to avoid conflict of interest, as per the watchdog.

CBDT seeks to expand ESOP concessions
CBDT has shot down a proposal by the DPIIT to extend tax concessions on employee stock options, announced in the Union Budget, to all registered startups. Instead, it is mulling changes to the Inter-ministerial Board framework that grants exemptions to startups under Section 80-IAC, ET reported quoting sources. The move will somewhat broaden the scope of startups that can benefit from Esop concessions. Currently only a few hundred startups in the country are exempt under 80-IAC.
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