Hi there! Welcome to ETMarkets Morning, the show about money, business and markets. I am Nandini Sanyal, and here is what we have to start your day.
>> Markets upbeat as UK, EU near Brexit deal
>> Retail investors shed latecomer tag in this stocks rally
>> HNI rush pushes down YTM on tax-free bonds
>> Arbitration tribunal asks India to pay Cairn $1.2 billion
And there is more. But first, a quick glance at the state of the markets…
>> Nifty futures on the Singapore Exchange traded 180 points higher at 7:30 am (IST), signalling a bounce ahead on Dalal Street.
>> Asian shares were set to rise, as global investors cheered a potential Brexit deal. Shares opened higher in Australia, Japan and South Korea. Japan’s Topix rose 0.6% and South Korea’s Kospi 0.9%.
>> Wall Street ended mostly higher in overnight trade, with Dow closing 0.38% higher and S&P500 edging up 0.07%. Nasdaq declined 0.29%
>> The rupee snapped its two-day losing streak to settle higher by 8 paise at 73.76 against the US dollar on Wednesday, tracking strong domestic equities and sustained foreign fund inflows.
>> The dollar index fell 0.14%. The pound climbed 0.13% against the dollar on indications that a trade agreement with the EU is close. The euro rose 0.1%. The yen was at 103.57 per dollar. The offshore yuan traded at 6.5320 to the greenback
IN OIL MARKET
>> Crude prices slipped again. WTI crude fell 0.2% to $48.07 a barrel.
AND IN BULLION
>> Gold and silver prices edged lower in Indian markets on Wednesday. On MCX, gold futures edged 0.06% lower to Rs 50,050 per 10 gm. Silver fell 0.08% to Rs 66,820 a kg.
All in all, the trade setup on Dalal Street looked strong this morning. On Wednesday, Nifty saw a 437-point bounce and formed a bullish candle on the daily chart, implying that the same momentum may continue.
LET ME NOW GIVE YOU A HEADS-UP on some of the top news we are tracking at this hour.
… Britain and the European Union were on the cusp of striking a narrow trade deal on Thursday, swerving away from a chaotic finale to the Brexit split that has dealt a blow to the 70-year attempt to forge European unity from the ruins of World War II. While a last-minute deal would avoid the most acrimonious ending to the Brexit divorce, the UK is heading for a much more distant relationship with its biggest trade partner than anyone expected at the time of the 2016 Brexit vote.
… ICICIdirect says Nifty will remain in a structural bull phase in 2021 with an upside target of 16,200. This implies a 19% rally over the index’s closing of 13,601.10 on Wednesday. The brokerage said global equities have always generated a positive return in a year following US elections.
… Financial market history has described retail investors as latecomers in most stock market rallies. In most cycles in the past, they have ended up coming in hordes near the peak and burnt their fingers. In 2020, they appear to have deviated from that behaviour. In each of the past three quarters, retail investors have increased stakes in stocks. So far, the average returns from investing in these stocks was more than 30%.
… HNIs continue to chase listed tax-free bonds because of the fall in returns in other safe debt products. Since the interest is tax-free, pretax effective returns will also be high for them. But this rush is pushing up the prices of tax-free bonds and bringing down their yield to maturity. For example, YTM on most of these bonds are only around 4.5% now. Investors should, however, consider capital gains tax and other transaction costs while planning a switch
…. An arbitration tribunal has asked India to pay British oil explorer Cairn Energy damages of $1.2 billion plus interest and costs in a six-year-old retrospective tax dispute, giving the government another legal jolt from an international forum after it lost a similar case to Vodafone in September. The Centre may contest the ruling.
LASTLY, AN UPDATE ON ALL THE STOCKS BUZZING THIS MORNING
>> British PE fund Apax Partners and US fund Blackstone are in a race to buy a controlling stake in 3i Infotech at an enterprise value of around Rs 800 crore
>> Dixon Technologies is foraying into information & communications technology hardware, including laptops, desktops, tablets and servers, and is set to open a factory in south India for it, a top executive said.
>> The financial liabilities incurred by M&M for corporate guarantee on the loans borrowed by SsangYong Motor Company is likely to be capped at Rs 680 crore for the South Korean automaker it acquired a decade back
>> Tata Consumer Products may be included in the upcoming semi-annual review for the rebalancing of the Nifty index, said Edelweiss Alternative Research.
>> Bharti Airtel added more mobile phone users than larger rival Reliance Jio for the third straight month in October, while Vodafone Idea continued to cede ground.
That’s it for now. For all the market news through the day, do track ETMarkets.com. Have a great day ahead! Bye-bye