Here’s a lowdown on top macro triggers that may move market on Monday. This report was compiled from agency feeds.
Euro Hits 1-yr Low, Turkish Lira Sinks
In currency market, the euro hit one-year lows on Monday as a renewed rout in the Turkish lira drove demand for safe harbors, including the U.S. dollar, Swiss franc and yen. The euro gapping lower as the Turkish lira took another slide to all-time lows around 7.2400 at one stage. The lira found just a sliver of support when Turkish Finance Minister Berat Albayrak said the country had drafted an action plan to ease investor concerns and the banking watchdog said it limited swap transactions. The dollar was still up almost 10% on the day at 6.9993 lira. This time last month it was at 4.8450.
Trade Tensions Cap Oil Price Gains
Oil prices inched up on Monday as U.S. sanctions against Iran pointed towards a tighter market, although concerns over slowing economic growth amid global trade tensions kept a lid on gains. Front-month Brent crude oil futures LCOc1 were at $72.88 per barrel at 0053 GMT, up by 7 cents from their last close. US West Texas Intermediate (WTI) crude futures CLc1 were up 16 cents at $67.79 per barrel.
CPI Inflation Out Today
Consumer price index (CPI) inflation will be released on Monday while Wholesale price index (WPI) Inflation and trade data for July will be announced on Tuesday.
Another Bailout Plan for Air India in Offing?
Yet another giant rescue package to make state-owned Air India commercially viable is being considered the by government after the failure of its disinvestment plan earlier this year. This will include a Rs 30,000 crore loan write-off and a cash infusion of Rs 10,000-11,000 crore. Accumulated losses will also be written off as part of the package that’s being considered by the finance ministry, allowing the company to clean up its balance sheet.
Equity Exposure & Net Worth
The Securities and Exchange Board of India (Sebi) is planning to limit investors’ exposure to shares and equity derivatives in line with their net worth, reports ET. Sebi wants investors’ assets certified by chartered accountants and brokers, who will decide the extent of their equity exposure. It wants investors’ assets certified by chartered accountants and brokers, who will decide the extent of their equity exposure.
Real Estate on Recovery Path
Most asset classes of India’s real estate sector recorded healthy growth in demand and investment in the first half of 2018, shows a report by real estate consultancy JLL India. This suggests return of confidence in the market. While corporate occupiers and institutional investors were seen actively leasing and investing in office space during the January-June period, retail space, too, witnessed healthy activities.
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New Jobs Being Created: Survey
The infrastructure sector, led by construction, information technology (IT), and banking, financial services and insurance (BFSI) sectors are set to lead job creation in the second half of the calendar year 2018, according to the latest bi-annual survey, ‘Hiring Outlook 2018’, by Naukri.com. 70% of recruiters agreed to new jobs being created in the next six months as compared to 60% last year, shows the survey.
FIIs Pump in Rs 8,500 Cr in 8 Trading Sessions
Foreign investors have pumped in over Rs 8,500 crore into the Indian capital markets in the last eight trading sessions on improvement in crude oil prices, stabilising rupee and better corporate earnings. The latest fund infusion comes following a net inflow of over Rs 2,300 crore in the capital markets — equity and debt — last month. Prior to that, overseas investors had pulled out over Rs 61,000 crore during April-June.
I IP ay 5-month high in June
Industrial production in India expanded at a five-month high in June with all three major sectors —manufacturing, mining and electricity — contributing to the recovery. Growth as measured by the Index of Industrial Production (IIP) stood at 7% in June compared with 3.9% in May, government data said on Friday. The data is line with an economic revival narrative, although some experts said more data was needed to confirm a trend. The IIP number benefited from the base effect of 0.3% contraction in June last year.
POLICIES & MORE
- Kharif crop planting has picked up in the past week, boosted by fresh spells of rains in particularly northeast and eastern India, but still is marginally lower than the level this time last year.
- India has initiated a countervailing duty probe into increased imports of certain types of steel items from China and Vietnam, a move aimed at guarding domestic players from imports that are subsidised by these exporting nations.
- With parliamentary polls just a year away, the Centre on Saturday announced a mega investment and connectivity programme for the northeastern states, entailing inflow of nearly Rs 10,000 crore through over 400 programmes expected to be rolled out in the next four years.
- Prime Minister Narendra Modi said that over 70 lakh jobs were created in the formal sector alone in the last one year. Based on EPFO data, more than 45 lakh formal jobs were created between September 2017 to April 2018.
- Billionaire Gautam Adani’s group has bagged licences to retail gas in 21 cities in the latest city gas distribution bid round that saw state-owned Bharat Petroleum Corp Ltd’s unit and Torrent Gas emerging as the other big winners
FUNDAMENTALS
Rupee Down: Caught in a fresh wave of global currency turbulence, the rupee fell sharply by 15 paise to end at 68.83 against the resurgent dollar on Friday, amid fears of escalation in trade tensions worldwide.
Long-term Bond Yields Mixed: Government bonds (G-Secs) ended mixed in a quiet trade following alternate bouts of buying and selling. The 7.17% 10-year benchmark bond maturing in 2028 slipped to Rs 96.14 from Rs 96.1950, while its yield ruled steady at 7.75%. The 6.68% G-Secs maturing in 2031 declined to Rs 89.8850 from Rs 90.00, while its yield inched up to 7.93% from 7.92%.
Shorter-term Bond Yields Mixed: The 6.84% G-Secs maturing in 2022 rose to Rs 96.7025 from Rs 96.70, while its yield ruled steady at 7.74%. The 7.37% G-Secs maturing in 2023 gained to Rs 98.31 from Rs 98.27, while its inched down to 7.80% from 7.81%. The overnight call money rates ended lower to 6.28% from Thursday’s level of 6.30%. It resumed higher at 6.55% and moved in a range of 6.55% and 6.00%.
Liquidity: The Reserve Bank of India, under the Liquidity Adjustment Facility, purchased securities worth Rs 3,841 crore in 5-bids at the 3-day repo operation at a fixed rate of 6.50% as on today, while it sold securities worth Rs 8,593 crore in 43-bids at the overnight reverse repo auction.
