Markets likely to consolidate; telcos, BoB, IDBI Bank in focus
Asian shares rallied on Tuesday as a halt in a recent bond markets sell-off calmed investor nerves and lifted riskier assets, although oil prices were on the defensive on fears of slowing Chinese energy consumption.
Indian markets are likely to consolidate on Tuesday, while trends in SGX Nifty suggest a positive opening for benchmark equity indices. On Monday, the BSE Sensex ended at 49,849.84, up 749.85 points or 1.53%. The Nifty closed at 14,761.55, up 232.40 points or 1.60%.
Asian shares rallied as a halt in a recent bond markets sell-off calmed investor nerves and lifted riskier assets, although oil prices were on the defensive on fears of slowing Chinese energy consumption.
US stocks had surged overnight, with the S&P 500 posting its best day in nearly nine months, after a retreat in bond yields and optimism about more US fiscal stimulus and a wider distribution of the covid-19 vaccine whetted investor appetites for risk.
US stocks were roiled last week when a sell-off in Treasuries pushed the 10-year Treasury yield to a one-year high of 1.614%. The 10-year yield was edging lower in early trade at 1.4255%.
Loans where repayments are delayed up to 90 days have surged at public sector lender Bank of Baroda (BoB) between March and December, raising concerns that stress is building up. If the loans remain unpaid beyond 90 days, they are classified as non-performing assets (NPAs).
Srei group’s bondholders have moved the National Company Law Appellate Tribunal (NCLAT) challenging an order by the Kolkata bench of the National Company Law Tribunal (NCLT) allowing Srei to skip repayments between 1 January and 30 June. Debenture trustees Axis Trustee Services Ltd and Catalyst Trusteeship Ltd which represent bondholders have jointly moved the tribunal against the NCLT order, which has impacted retail and institutional investors alike.
LIC-controlled IDBI Bank will set off its accumulated losses worth ?45,586 crore against the balance in the securities premium account, according to the bank's draft scheme.
Telecom operators on Monday placed bids worth ?77,146 crore in India’s first 4G spectrum auction in more than four years against the government’s expectation of ?45,000 crore, communications, electronics and information technology minister Ravi Shankar Prasad said.
Goods and services tax (GST) collections by the Centre and states exceeded the ?1 trillion mark for the fifth straight month in February, aided by an aggressive drive to improve compliance and recovery in economic activities. The sustained rise in GST collections, staging a recovery after a steep drop in April when India was in a national lockdown, offers relief to policymakers seeking to bridge a massive revenue shortfall.
Meanwhile, demand for riskier assets did not slug the dollar, usually regarded as a safe-haven currency, as investors bet on fast growth and inflation in the United States. The US dollar index gained 0.3% in early trade against a basket of currencies to stand at 91.029, within sight of a three-week high hit overnight.
The Australian dollar was little changed at $0.77685 ahead of the RBA meeting.
A stronger dollar weighed on gold, and the precious metal was on the defensive at $1,722.8879 an ounce early Tuesday.
The exuberance in risk assets did not help energy markets. Oil prices fell more than 1% overnight after data showed China’s factory activity growth slipped to a nine-month low in February, owing in part to disruptions over the Lunar New Year holiday. There were also fears among energy investors that OPEC may increase global supply following a meeting this week.
Brent crude fell 1.7% to $63.31 a barrel, while U.S. West Texas Intermediate crude lost 0.6% to $60.3.
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