Morning market quote from V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services
“There are conflicting signals for the market. Softening US 10-year bond yield ( now at 1.53%, significantly down from the recent peak of 1.74%), rising FII inflows( Rs 1422 cr yesterday) and more importantly steadily falling fresh Covid-19 cases and daily deaths are clear positives. But robust US jobs data and rising crude are negatives from the market perspective. IT is outperforming Banking this month. Huge delivery volumes in IT majors indicate high institutional investor confidence in this segment. A disturbing trend in the market is the sharp rise in the prices of many mid and small-caps of unproven track record. Many retail investors are over-doing the unlock trade.”
Market Watch: Deven Choksey of KRChoksey
On IT stocks
Sector rotation will continue. Infosys, TCS among the largecap, the midcap companies like Happiest Minds, Cyient and Tata Elxsi remain among the favourites.
On Banks
The situation is better for most of the banks, their books are clean, they haven’t gone into aggressive lending either in recent past and as a result of which the collection is also likely to happen much faster. State Bank of India (SBI) is the largest bank, you cannot avoid this bank, and that could remain in top picks. Bank of Baroda (BoB) is showing good amount of promises so certainly that could follow next.
Opening Bell: Sensex opens flat, Nifty around 15,750; banks drag, energy gains
Indian indices opened flat on Wednesday opened flat as gains in energy, IT stocks were capped by losses in banking and financials. Energy stocks after crude oil prices were at a 2-year high. At 9:18 am, the Sensex was trading 59 points higher at 52,334 while the Nifty rose 15 points to 15,755. Broader markets outperformed benchmarks with the midcap and smallcap indices up over half a percent each. Among sectors the banking and financial indices were in the red while Nifty IT, Nifty Pharma and Nifty Energy were up 0.5 percent each.
Infosys chief backs regulation of crypto assets as commodities in India
Infosys chairman Nandan Nilekani has backed the regulation of cryptocurrencies as an asset that can be bought or sold, like a commodity. In an interview with Financial Times, he also said treating them as a commodity could add wealth to country’s economy. Nilekani believes that cryptocurrencies are too volatile and energy-intensive to be used as a means of payment, and feels India’s homegrown Unified Payments Interface (UPI) digital payments infrastructure is more effective. He also said if individuals and businesses are allowed to tap the cryptocurrency market worth $1.5 trillion, it would allow them to put wealth into India’s economy. More here
MicroStrategy to sell $500 million of bonds to buy bitcoins
MicroStrategy Inc, a major bitcoin corporate backer, said on Tuesday it was offering USD 500 million in bonds and the proceeds will be used to buy bitcoins. This comes a day after the world’s largest publicly traded business intelligence company said it planned to raise USD 400 million through senior secured notes due 2028 in a private offering. The company spent the last year steadily amassing more bitcoin after making its first investment in August as the cryptocurrency soared in value. It has since made multiple purchases of digital currency. The senior secured notes offering, expected to close on June 14, will bear an annual interest rate of 6.125 percent, the company said.
OMCs hike petrol, diesel prices by 24-27 paise
The oil marketing companies (OMCs) hiked fuel prices by 24-27 paise on Wednesday after keeping them unchanged on Tuesday. Accordingly, the price of petrol and diesel is Rs 95.56 and Rs 86.47 per litre in the national capital, as per Indian Oil Corporation, the country’s largest fuel retailer. In Mumbai, the petrol price changed to Rs 101.76 per litre on Monday. The cost of diesel advanced to Rs 93.85 a litre.
World Bank cuts India’s FY22 estimated GDP growth to 8.3% from 10.1%
The latest World Bank report on global economic recovery post the COVID-19 pandemic has predicted India’s GDP growth at 8.3 percent for the financial year 2021-22. The growth projection has been slashed from 10.1 percent predicted in April due to the second wave of the COVID-19 in the country. In its South Asia Economic Focus report in April, the World Bank raised India’s growth forecast compared to earlier prediction in January of 5.4 percent. The global lender also predicted India’s real GDP growth rate between 7.5 to 12.5 percent for the same period. The World Bank has predicted India’s growth rate at 7.5 percent for FY23. This is against its 5.8 percent forecast in April and 5.2 percent forecast in January for the same period. The projected growth rate for FY24 is estimated to remain at 6.5 percent. More here
Oil rises for second day on signs of strong fuel demand recovery
Oil prices rose for a second day on Wednesday on signs of strong fuel demand in Europe, while the prospect of a near-term return of the Iranian oil supply faded as the US secretary of state said sanctions against Tehran were unlikely to be lifted. Brent crude futures were up 15 cents, or 0.2 percent, at USD 72.37 a barrel at 0131 GMT and earlier rose to USD 72.58, the highest since May 20, 2019. Brent rose 1 percent on Tuesday. US West Texas Intermediate (WTI) crude futures jumped 20 cents, or 0.3 percent, to USD 70.25 a barrel after rising to as high as USD 70.42, the most since Oct. 17, 2018. Prices climbed 1.2 percent on Tuesday. The market is being boosted by a solid outlook for fuel demand growth as travel curbs are lifted in Europe with more people getting vaccinated. More here
First up, here is quick catchup of what happened in the markets on Tuesday
Indian indices ended marginally lower on Tuesday dragged mainly by banking, financials and metal stocks. The sentiment was also lower on the back of global inflation worries. The Sensex ended 53 points lower at 52,275 while the Nifty fell 11 points to settle at 15,740. Broader markets, however, outperformed benchmarks with the midcap and smallcap indices up over half a percent each. On the Nifty50 index, Tata Motors, Tech Mahindra, IOC, Bharti Airtel and HCL Tech were the top gainers while Hindalco, Tata Steel, Kotak Bank, JSW Steel and Shree Cement led the losses.
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