Market Opens :
Indian indices are opened flat with negative bias on Thursday with Nifty around 11,700.
At 09:18 hrs IST, the Sensex is down 61.16 points at 38,970.39, while Nifty is down 22.50 points at 11,725.70. About 414 shares have advanced, 445 shares declined, and 59 shares are unchanged.
Yes Bank, Eicher Motors, Jet Airways, IndusInd Bank, Tata Steel, Hindalco, Vedanta, TVS Motor, Maruti Suzuki, HPCL, BPCL are among major lower in the early trade, while gainers are ONGC, IOC, JSW Steel, Britannia HDFC Bank and ITC.
Expect Infra and FMCG, all other sectoral indices are trading in red led by auto, IT, metal and pharma.
Rupee Opens :
The Indian rupee opened lower at 69.61 per dollar on Thursday versus 69.56 Tuesday.
Rupee rose on Monday primarily on back of weakness in the dollar against its major crosses ahead of important FOMC policy statement that was scheduled for release yesterday. The Federal Reserve in its policy statement held rates unchanged and held out hope that weak inflation will edge higher.
The Fed Chairman hinted that that the central saw no compelling reason to consider a rate cut in response to weak inflation, thereby prompting a modest selloff in equity markets and pushed bond yields higher.
Market participants will be a little cautious ahead of nonfarm payrolls number that will be released tomorrow and an uptick in job creation number could support the greenback on lower levels. Today, USD-INR pair is expected to quote in the range of 69.40 and 70.05-70.20
Global Markets :
Asian markets trade lower:
Asian markets marked time on Thursday with two major centres - Japan and China - shut for holidays while the dollar held on to overnight gains after the US central bank poured cold water on rate cut expectations.
Wall Street ends lower:
US stocks ended lower on Wednesday and the S&P 500 snapped a three-day streak of record high closes as comments from Federal Reserve Chairman Jerome Powell appeared to dampen hopes the central bank could move later this year to cut interest rates.
SGX Nifty:
Trends on SGX Nifty indicate a negative opening for the broader indices in India, a fall of 56 points or 0.47 percent. Nifty futures were trading around 11,793-level on the Singaporean Exchange.
Fed meet :
Receding growth concerns and no rate hike scenario yet positive for Indian equities
Highlights:
- Fed keeps policy rate steady due to muted inflation signals
- Strong US domestic growth and receding international headwinds key positives
- Balance Sheet unwinding to halt in September
- Fed to deliberate on portfolio composition – likely supportive for yield curve steepening
- Accommodating Fed positive for EMs, especially Indian equities
At its April meeting, US Federal Reserve Chairman Jerome Powell has stipulated what most investors would want to hear – strong US domestic growth, receding international headwinds, accommodating financial conditions and no case yet for further rate hikes. The reason being muted inflationary pressures.
The inflation rate remained close to two percent till CY18-end and expectedly fell at the start of the current year to 1.5 percent in March due to slump in oil prices. What was unexpected was the decline in core inflation, which excludes volatile food and energy components. Core inflation rate decelerated to 1.6 percent in March. Fed ascribe this to transitory factors and hence expect it to return to its longer-term target of two percent. But for the time being the inflation reading has held back the Fed from moving in either direction – rate hike or cut.
Rate cut – yes. CME FedWatch Tool indicates that the probability of a rate cut in 2019 has increased to 40 percent from 29 percent at its March meeting. Powell’s statement also doesn’t rule out this possibility. To err on the side of caution, the Fed would want to remain patient with policy rate changes.
- Strong domestic economy: Q1 GDP growth and labour market data were above Fed’s expectations. On an average, 180,000 job gains per month were reported, which is well above the pace of new entrants entering the labour force. While the growth in private consumption and business fixed investment slowed, the Fed is hopeful that both these components would bounceback later this year based on recent data.
- Global financial conditions have eased: Global financial conditions have remarkably improved due to supportive fiscal and monetary policies.
- International growth headwinds have faded: The Fed noted that recent data from both China and Europe are showing signs of improvement. Prospect of a disorderly Brexit has diminished for now. There are reports on progress in US-China trade talks.
Balance Sheet unwinding to halt: As promised at its last meeting, the Fed has slowed the pace of its Balance Sheet reduction from the current month and this process would halt by September. This step is expected to be supportive for overall liquidity in the system. This means the Fed would keep the balance sheet size at elevated levels compared to earlier monetary policy cycles. By revising the run-rate of unwinding, the Fed's Balance Sheet should stabilise around $3.7 trillion.
Composition of Fed’s portfolio to change: Another interesting aspect from the meeting is that Fed is contemplating to change its portfolio composition. Currently, its portfolio composition has a higher proportion of longer-term securities. It was necessitated during the financial crises when Fed wanted to keep the longer term interest rate lower and hence was required to buy more long-term securities.
While Fed is still to deliberate about the composition, the hint is that there would be a change towards more short-term securities. This implies that interest rates could be lower in the short term and higher in the long term. Such a move should aid yield curve steepening.
Partly due to this, the yield curve (US treasury 10 year-three month yield) has already steepened. Strong commentary on domestic and international economic growth have also contributed to it. The dollar has strengthened versus all major currencies. While dollar strength is not a positive factor for emerging market equities, a robust reading on global macro-economic situation should more than offset it for risky asset classes, including Indian equities.
Domestic Markets :
Results Today: Dabur India, Bandhan Bank, Hatsun Agro Product, Hindustan Zinc, JM Financial, MRF, Radico Khaitan, Sunteck Realty, Tata Power, Aurionpro Solutions, Bombay Dyeing, Larsen & Toubro Infotech, Tanla Solutions
Here are the stocks that are in news today :
Maruti Suzuki sells 1,43,245 units in April 2019 against 1,72,986 units in April 2018
Eicher Motors April 2019 sales down 17% at 62,879 units vs 76,187 units in April 2018
Atul Auto April 2019 sales up 22.21% at 3346 units against 2738 units, YoY
Escorts April 2019 tractor sales decline 14.9% at 5,264 units agianst 6,186 units in April 2018
Ambuja Cements Q1: Standalone net profit up 57.1% at Rs 427 croreore against Rs 271.8 croreore, Revenue up at Rs 2,927.6 croreore against Rs 2,862.6 croreore, YoY
Raymond Q4: Loss at Rs 25.2 crore against loss of Rs 24.1 crore; revenue up 11% at Rs 1,808.7 crore versus Rs 1,629.8 crore, YoY
Britannia Industries Q4: Net profit up 12% at Rs 294.3 crore versus Rs 263 crore, revenue up 10.3% at Rs 2,799 crore versus Rs 2,537.5 crore, YoY
Future Lifestyle Q4: Consolidated net profit up 50% at Rs 189 crore versus Rs 126 crore, revenue up 27.3% at Rs 5,728 crore versus Rs 4,498 crore, YoY
Ajanta Pharma Q4: Net profit falls 5.9% at Rs 88.9 crore versus Rs 94.5 crore, revenue down 2.8% at Rs 515.2 crore versus Rs 530.3 crore, YoY
Zensar Technologies Q4: Net profit up 49.5% at Rs 82.7 crore versus Rs 55.3 crore, revenue up 2.1% at Rs 1,057.4 crore versus Rs 1,035.5 crore, QoQ
Indian Hotels Q4: Net profit up 54.6% at Rs 122.5 crore versus Rs 79.3 crore, revenue up 8.8% at Rs 1,244.3 crore versus Rs 1,143.5 crore, Yo
BHEL signs MoU with ARAI for various projects related to e-mobility
TVS Motor Company Q4: Net profit down 19.2% at Rs 133.8 crore; revenue up 9.4% at Rs 4,384 crore.
ICICI Bank board to consider fund raising on May 6
Lupin in alliance with Natco receives FDA approval for Bosentan tablets
Tube Investments of India recommended final dividend of Rs 0.75 per equity share
BASF India recommended a special dividend of Rs 2 per equity share
Mercator sells its very large crude carrier - Nerissa (VLCC) for a total consideration of USD 27.5 million
Lakshmi Vilas Bank has revised the Marginai Cost of funds based Lending Rate (MCLR) with effect from May 1, 2019
Tube Investments approves fund raising up to Rs 100 crore via NCDs
PNB Housing Finance, Mphasis & L&T Infotech to be included in F&O from May 31
DHFL to consider fund raising on May 4
ICRA downgraded DHFL comercial paper rating to A3+ from A2+
Reliance Home Finance: Brickwork Ratings has revised rating to C for company's long-term debt programme and A4 for short-term debt programme
Cochin Shipyard signs contract for the construction of anti-submarine warfare shallow water crafts (ASWSWCs) for Indian Navy
Embassy Office Parks partners with Four Seasons Hotels & Resorts to launch Four Seasons at Embassy One, Bengaluru
ICRA assigned AA+ rating to the Ashok Leyland long term fund
KIOCL entered into tripartite MOU with Emirates Steel, Abu Dhabi and Star Global, Dubai for sale of high grade Pellets to Emirates Steel
Lok Sabha election tracker LIVE :
Opposition to decide PM after polls, I'm not an aspirant, says Naidu
On being asked about political analysts’ claim that the Samajwadi Party-Bahujan Samaj Party ‘Mahagathbandhan’ is the ‘B team’ of the Congress, Akhilesh Yadav told ANI: “There is no difference between the BJP and the Congress. Congress wants to benefit the BJP. Who taught the central agencies to intimidate Opposition leaders?”
Update: Re-poll ordered at five polling stations in Andhra Pradesh for the Lok Sabha elections and at three of them for Assembly elections.
Voting there took place in the first phase on April 11. Fresh polling will be held on May 6. Voting has otherwise concluded in the state.
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