The Indian markets open higher on Wednesday as market participants await RBI Governor’s address later today. Meanwhile, the trend on SGX Nifty also indicates a positive start for the broader index in India. The Nifty futures were trading 51.50 points or 0.36 percent higher at the 14,584.00 level on the Singaporean Exchange at 8:30 am.
Wall Street| The Nasdaq ended sharply lower on Tuesday as investors dumped mega cap growth stocks to seek shelter in more defensive parts of the market, amid concerns on the rising interest rate and uncertainty over an upcoming jobs report. The Nasdaq Composite dropped 261.62 points, or 1.88 percent, to 13,633.50, while the S&P 500 lost 28 points, or 0.67 percent, to 4,164.66. The Dow Jones Industrial Average pared its earlier losses and closed slightly higher, rising 19.8 points, or 0.06 percent, to 34,133.03.
Asian markets| Asian shares risked falling for a fourth straight session on Wednesday as sentiment took a knock from a selloff in large cap Wall Street tech darlings, combined with talk of rising US interest rates. Holidays in Japan, China and South Korea limited the early reaction, leaving MSCI’s broadest index of Asia-Pacific shares outside Japan dithered on either side of flat. Japan’s Nikkei was shut, but futures traded down at 28,735 compared to the last cash close of 28,812.
Indian market on Tuesday| The Indian benchmark indices ended Tuesday’s volatile trade sharply lower as coronavirus-induced lockdown worries weighed on investor sentiment. The Sensex ended 465.01 points, or 0.95 percent, lower at 48,253.51 and the Nifty lost 137.65 points, or 0.94 percent, to settle at 14,496.50. Both small-cap and mid-cap indices ended in the red. Barring Nifty PSU Bank, all other sectoral indices ended in the red with Nifty Pharma falling the most, followed by Nifty Auto, Nifty IT, Nifty Private Bank and Nifty Metals.
Crude Oil| Oil prices rose nearly 2% on Tuesday after more U.S. states eased lockdowns and the European Union sought to attract travelers, though soaring COVID-19 cases in India capped gains. Futures strengthened in post-settlement trade after American Petroleum Institute estimates of U.S. crude inventories fell more than expected, according to traders.
Rupee| Rising for the second day in a row, the rupee closed 10 paise higher at 73.85 against the US currency on Tuesday on dollar selling by traders. A stronger dollar in the global markets, losses in the domestic equities and high crude oil prices, however, restricted the gain in the local unit. At the interbank forex market, the rupee opened at 73.83, and hit an intra-day high of 73.76 and a low of 73.97. On Monday, the rupee had settled at 73.95 against the American currency.
RBI Governor Shaktikanta Das to address media today | The Reserve Bank of India (RBI) Governor Shaktikanta Das will address the media at 10 am today. The address is unscheduled and comes amid the raging second wave of COVID-19 in the country. The reason for the address is unknown. However, experts believe that amid rising coronavirus numbers and lockdown in many states, the RBI governor may announce relief measures like loan moratorium extension, one-time loan restructuring for small borrowers, additional liquidity relief, among others. RBI has announced a number of reliefs to Banks, Small banks, NGOs, MSMEs under restructuring process due to Covid.
US Treasury’s Yellen downplays inflation, rate hike concerns | US Treasury Secretary Janet Yellen said on Tuesday that she does not anticipate that inflation will be a problem for the U.S. economy, as price increases during the recovery should be transitory. Yellen, speaking at an event, clarified earlier remarks that interest rates may need to rise modestly to prevent the economy from overheating. “It’s not something I’m predicting or recommending,” she said.
DoT permits telecos to conduct 5G trials| The Department of Telecommunications (DoT) on May 4 gave permission to Telecom Service Providers (TSPs) to conduct trials for use and applications of 5G technology for a period of six months. The six-month trial period includes a two-month period for procurement and setting up of the equipment. TSPs that have applied for permission include Bharti Airtel, MTNL, Reliance Jio Infocomm, and Vodafone Idea.
UK-India announces 1 billion pound bilateral trade deal | UK has announced a one billion pound bilateral trade and investment deal with India. This comes ahead of a virtual meeting between Prime Minister Narendra Modi and British Prime Minister Boris Johnson on a new enhanced trade partnership. The deal comprises 533 million pounds of new Indian investment into the UK, including a 240 million pound investment by vaccine maker Serum Institute to support clinical trials and research & development of vaccines in Britain. The two countries have also signed a migration and mobility partnership agreement to facilitate legal travel and flow of talent between the two countries.
Drug regulator CDSCO clears way for import of COVID-19 vaccines into India | Drug regulator Central Drugs Standard Control Organisation (CDSCO) has cleared the way for the import of COVID-19 vaccines into India. It has released guidance for the import of vaccines by the private sector or state governments. Importer or agent of the manufacturer will obtain 3 licenses from CDSCO for vaccines not yet approved or licensed in India.
The markets are under pressure due to Covid pandemic restrictions and hence prove to be quite volatile. The investors are advised to be quite careful as the markets are directionless.
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