Pre Market updates for 07 July 2022
AlliesFin Telegram.me/AlliesFinMkt. Updates :
SGX Nifty -2 pts (16016) from last trade 16018 ,
Nikkei +59 pts ,
Hangseng -234 pts ,
Now @ 6.53am .
Dow +69.86 pts ,Nsdq +39.61 pts, S&P
+13.69 pts, Bovespa +424 pts , Ftse +82 pts , Dax +193 pts , Cac +117 pts , Crude @ $98.34 brl (-0.19), Brent @ $100.36 brl (-0.33) , Gold @ 1739.90 (+3.40), Silver @ $19.185 (+0.03), Euro @ $1.0187, JPY @ $135.81, INR @ 79.025
🔹US GOVT. 10-YEAR YIELD : 2.90%
Today's Corporate Action, 07 July Ex Date :
AXISBANK
Final Dividend - Rs. - 1.0000
BANKINDIA
Final Dividend - Rs. - 2.0000
CROMPTON
Final Dividend - Rs. - 2.5000
DCMSHRIRAM
Dividend - Rs. - 4.9000
GLAXODividend - Rs. - 30.0000
GLAXO
Special Dividend - Rs. - 60.0000
GRNLAMIND
Final Dividend - Rs. - 1.2000
HERANBA
Final Dividend - Rs. - 2.0000
HITECHCORP
Dividend - Rs. - 1.0000
JMFINANCIL
Final Dividend - Rs. - 1.1500
LTTS
Final Dividend - Rs. - 15.0000
MAYURUNIQ
Final Dividend - Rs. - 2.0000
MINDAIND
Bonus issue 1:1
MINDAIND
Final Dividend - Rs. - 1.0000
NAVINFLUOR
Final Dividend - Rs. - 6.0000
NILKAMAL
Final Dividend - Rs. - 15.0000
OBEROIRLTY
Final Dividend - Rs. - 3.0000
ROSSARI
Final Dividend - Rs. - 0.5000
SOLIMAC
Final Dividend - Rs. - 1.2000
SUNDARMFIN
Final Dividend - Rs. - 10.0000
VISHNU
Final Dividend - Rs. - 2.0000
ZFCVINDIA
Dividend - Rs. - 12.0000
Today's Key Results/Board Meetings, 07-Jul-22 :
APTPACK
Audited Results
CRSTCHM
General
FCSSOFT
General
GGAUTO
Quarterly Results
GMBREW
Quarterly Results
GUJINV
General
IFL
General
INFRATRUST
General
MCLOUD
A.G.M.
MYSPAPE
Quarterly Results
PASARI
General
ROSEMER
General
SANDUPHQ
General
SKC
Audited Results
STRLGUA
General
TARMAT
General
VAKRANGEE
Quarterly Results
VISCO
General
VKAL
General
SEC. IN F&O BAN FOR, 07 JUL, 2022 :
1. NIL
ADDITION : NIL
DELETION : NIL
US Markets in Detail!!
SGX: 16,065: +82: +1.17%
Provisional Cash Rs. In Crs. (6th July)
FIIs: -330 (7,356 – 7,686)
DIIs: +1,464 (7,751 – 6,287)
Sensex: 53,751: +617: +1.16%
Nifty: 15,990: +179: +1.13%
BankNifty: 34,324: +508: +1.50%
NiftyIT: 28,008: +312: +1.13%
MIDCAP: 22,346: +387: +1.76%
Dow: 31,038: +70: +0.23%
S&P: 3,845: +14: +0.36%
Nas: 11,362: +40: +0.35%
Brazil: 98,719: +424: +0.43%
Ftse: 7,108: +82: +1.17%
Dax: 12,595: +193: +1.56%
Cac: 5,912: +117: +2.03%
MOEX: 2,222 (-5) (-0.21%)
WTI Oil: $98.53 (-0.97%)
Brnt: $99.61 (-3.07%)
Gold: $1,737 (-27) (-1.55%)
Silver: $19.16: +0.20%
Copper: $341 (-1) (-0.20%)
Copper (LME): $7,670 (-336) (-4.20%)
Zinc (LM): $2,992 (-126) (-4.04%)
Alluminum (LME): $2,392 (-72) (-2.92%)
Tin (LME): $26,000 (-600) (-2.26%)
Eur-$: 1.0183
GBP-$: 1.1918
Jpy-$: 135.93
Re: 79.3013 (-0.09%)
USD = RUB: 62.83 (-1.53%)
US10yr: 2.93%
GIND10YR: 7.294 (-1.31%)
$ Index: 107.0750: +0.51%
US Vix: 26.73 (-2.94%)
India Vix: 20.26 (-2.55%)
BalticDry: 2,159 (-55) (-2.48%)
ADR/GDR
Cogni: +0.44%
Infy: +1.39%
Wit: +0.94%
IciciBk: +1.20%
HdfcBk: +2.37%
DrRdy: +0.20%
TataMo: +1.07%
TatSt: +2.36%
Axis: +2%
SBI: +2.04%
RIGD (-0.58%)
INDA: +1.67% (IShares MSCI INDIA ETF)
INDY: +1.44% (IShares MSCI INDIA 50 ETF)
EPI: +1.08% (Wisdom Tree India Earning)
PIN: +1.54% (Invesco India Etf)
S&P 500, Nasdaq book 3rd day of gains after Fed minutes (of the June 14-15 policy ) point to another big rate increase this month to tackle inflation: U.S. oil prices settle in a bear market
This is the first three-day winning streak for the S&P 500 since late May.
U.S. stocks end higher Wednesday after minutes of the Federal Reserve’s June policy meeting signaled another big interest rate-hike is likely later this month despite the risk of slowing economic growth. The economic data that hinted at slightly slower growth, prompting some to brush off the hawkish stance that the Federal Reserve reiterated in its June meeting minutes as outdated.
The S&P 500 ended the session up 0.4% after swinging between gains and losses as investors digested a flurry of data. The tech-heavy Nasdaq 100, whose members have been more sensitive to the rise in bond yields, also rose. The two- and 10-year US Treasury yield curve remained inverted. The dollar held onto its gains. Oil fell below $100 a barrel, extending its drop for a second day.
Prior to the minutes' publication, investors had been pricing in another 75-basis-point rate increase at the upcoming July 26-27 gathering, meaning the fact that both 50 basis points and 75 basis points remained on the table pointed toward the Fed acknowledging the impact of its rate rises on the economy.
The minutes reflected participants' concern about rate increases having the potential for a "larger-than-anticipated" impact on economic growth.
Stocks bounced after the Federal Reserve released the minutes from its June meeting, showing that the central bank was committed to bringing down inflation. Fed members said the meeting on July 26 and 27 likely also would see another 50- or 75-basis point move, the minutes showed. A basis point is one one-hundredth of 1 percentage point.
Volume on U.S. exchanges was 11.31 billion shares, compared with the 13.08 billion average for the full session over the last 20 trading days.
On Tuesday, the Dow fell 129 points, or 0.4%, while the S&P 500 SPX notched a 0.1% rise and the Nasdaq Composite jumped 1.7%.
What drove markets
Stocks added to a string of gains after minutes of the Federal Reserve’s June meeting released on Wednesday reiterated a resolve by Fed officials to act aggressively through interest rate hikes given growing concerns about the possibility of inflation becoming entrenched in the economy.
Fed officials agreed last month that interest rates may need to keep rising for longer to prevent higher inflation from becoming entrenched, even if that slowed the US economy, the minutes showed. But traders on Wednesday also grappled with economic data which pointed to a slight deceleration in the pace of growth, spurring some to conclude that the Fed’s minutes don’t reflect the current reality of the economy.
Fed officials “recognized that policy firming could slow the pace of economic growth for a time,” the minutes said. They also indicated another large rate hike, of 50 basis points or 75 basis points, likely would be approved later this month.
“In discussing potential policy actions at upcoming meetings, participants continued to anticipate that ongoing increases in the target range for the federal funds rate would be appropriate to achieve the Committee’s objectives,” the minutes stated. “In particular, participants judged that an increase of 50 or 75 basis points would likely be appropriate at the next meeting.”
These minutes are reflecting the almost extreme concern, or panicky situation, the Fed has found itself in.
But in three weeks, a lot has changed, pointing to the retreat in U.S. oil prices to below $100 a barrel, signs of slowing growth and the climbing U.S. dollar, which could reflect recession fears. “It seems like a very different world from three weeks ago.”
Evidence of a slower economic growth already has begun to show as the Fed works to dramatically increase interest rates and reduce its balance sheet to fortify its battle against high inflation.
Data released Wednesday showed that US job openings dipped slightly in May but remained near a record, pointing to resilient demand for labor even as optimism about the economy’s prospects dim. Growth in the US services sector also eased in June to a more than two-year low as orders softened amid ongoing hiring challenges and capacity constraints.
An ISM barometer of business conditions at service-oriented companies, such as restaurants, hotels and retailers fell slightly to 55.3% in June and hit the lowest level in two years. A reading above 50% indicates an expansion in activity.
But not all investors are convinced that the Fed’s reiterated stance has little bearing on what’s to come.
“Indeed, the minutes reflected a Fed that is concerned about inflation, and even though they believe that inflation could stay high for a while and growth risks are skewed to the downside, they talk about the potential of an even more restrictive policy in time,” said Priya Misra, global head of rates strategy at TD Securities. “This is hawkish relative to a market that has increasingly become convinced that the Fed is about to blink on hikes due to an imminent recession.”
Despite recent fluctuations in the stock market, volatility is still far off levels usually observed during other powerful bear markets. The Cboe VIX Index hasn’t crossed the 40 points mark since the latest selloff began, something unseen over the past two decades.
The odds of a US recession in the next year are now 38%, according to latest forecasts from Bloomberg Economics. Bond traders are penciling in a policy turnaround by the Federal Reserve, with current hawkishness giving way to interest-rate cuts in the middle of 2023. Some investors saw additional hints of this in the Fed’s minutes.
Since the last Fed meeting, “the economic data, the inflation data and the bond market response has turned much more dovish,” All of that is suggesting that really what the Fed thought 30 days ago is not that meaningful at the moment.”
“What got my attention was the reference to a potential pause at year-end,” said Cliff Hodge, chief investment officer at Cornerstone Wealth. “This is new, and extremely important. They were already thinking about where the appropriate level is to stop tightening policy in June, before the spate of economic data really deteriorated.”
Central banks around the world have been tightening monetary policy to contain consumer prices. But a renewed spike in China’s Covid cases and a worsening gas crisis in Europe are signals that a worldwide slowdown is on the horizon despite these efforts.
“Talk matters,” said an investment strategist, about the impact of tougher tones lately from Fed officials and other central bankers about the need for tighter monetary policies to tamp down high costs of living around the world.
“Our expectation is that demand destruction is already on the way,” he said, by phone. While he views higher interest rates as necessary to help bring inflation back down to the Fed’s 2% target, he also worries that a “global tsunami” of monetary tightening could risk triggering a deeper U.S. recession.
Treasury bonds yields inverted again Wednesday afternoon, with the 2-year yield trading above the 10-year yield.
Bond yields extended their gains for the day after the release of the Fed minutes, suggesting that investors may be pricing in a more aggressive central bank. That would be reassuring to some equity investors, who want the central bank to slow inflation so the economy can normalize more quickly.
It seems what markets might be latching onto is the comment about how a more restrictive stance might be appropriate if inflation pressures persist. That’s probably more hawkish than Powell’s comments at his press conference. That might be a comment that indicates they would tolerate a mild recession and continue to tighten policy if the inflation data remains too elevated. It’s certainly between a rock and hard place but I think they’re trying to communicate they are committed to getting inflation under control.
Investors continued to worry about whether the economy is falling into a recession after the benchmark 10-year U.S. Treasury yield fell below the 2-year yield. The so-called yield curve inversion historically has been a warning sign that the economy may be falling or has already fallen into recession.
*Some Wall Street analysts say a recession could be mild. On Tuesday Credit Suisse said it sees the U.S. dodging a recession as it slashed its year-end S&P 500 target to reflect the effect of higher capital cost on stock valuations.
We’re seeing a game of chicken right now, with growth and inflation barreling ... toward each other to see which one is going to flinch first. Ultimately, they’re both going to turn over, but which one turns over first is going to be the most critical for the path forward.*
“Recently a lot of the discussion has really been around this recession narrative, especially with the yield curve inverting for the third time this year,” said Lindsey Bell, chief markets and money strategist at Ally, by phone. “The market just remains on edge because there’s just a significant amount of uncertainty.”
BlackRock’s Bob Miller, head of America Fundamental Fixed Income, said the Fed appears to have “a narrow path to tread” as it works to lower inflation without “breaking the economic recovery,” in emailed comments.
Earlier, Japan’s Nikkei 225 lost 1.2% and China’s Shanghai Composite shed 1.4% after it emerged Beijing was once again tacking COVID-19 outbreaks in several regions of the country.
But European stocks rallied, with the STOXX Europe 600 Index closing 1.7% higher and London’s FTSE 100 Index gaining 1.2%.
European stocks closed higher on Wednesday as markets sought to reverse a negative slide in the previous trading session.
The July Sentix Economic Index on Monday showed investor morale across the 19-country euro zone has plunged to its lowest level since May 2020, pointing toward an “inevitable” recession.
On Tuesday, the euro fell to its lowest level in two decades as fears of a recession ramped up, with gas prices soaring and the Ukraine war showing no signs of abating.
In Britain, traders are keeping an eye on political developments with Prime Minister Boris Johnson facing a mass exodus of government ministers.
British Finance Minister Rishi Sunak and Health Secretary Sajid Javid both resigned Tuesday in protest against Johnson’s leadership, while several other officials also quit on Wednesday.
On the data front, euro zone retail sales rose 0.2% month-on-month in May and 0.2% annually, slightly below forecast.
Companies in focus
• Microsoft Corp. shares rose 1.3% even after the AP reported that its acquisition of game publisher Activision Blizzard will face antitrust scrutiny in the U.K., after regulators said Wednesday they opened an initial inquiry into the $69 billion deal.
• Target Corp. shares tell 0.6% after it announced a fresh lineup of perks and promotions for the back-to-school season at a time when parents and teachers are feeling the squeeze of inflation.
• Kornit Digital Ltd. shares plunged 25.7% Wednesday after the company cut its forecast for the second quarter Tuesday and suggested the third quarter isn’t expected to be much better.
• Shares of Rivian Automotive Inc. rallied 10.4% Wednesday, after the electric vehicle maker reported second-quarter deliveries and production that was “in line with the company’s expectations.”
• Uber and DoorDash fell after Amazon struck a partnership with Grubhub, a unit of Just Eat Takeaway
• Tesla shares fell 0.6% even though the electric vehicle maker sold about 78,000 vehicles produced in China in June, up 142% from May, according to preliminary data released Wednesday by the China Passenger Car Association.
What to watch this week:
• EIA crude oil inventory report, Thursday
• Fed Governor Christopher Waller, St. Louis Fed President James Bullard, scheduled to speak, Thursday
• ECB account of its June policy meeting, Thursday
• US employment report for June, Friday
Currencies
# The Bloomberg Dollar Spot Index rose 0.4%
# The euro fell 0.8% to $1.0187
# The British pound fell 0.2% to $1.1925
# The Japanese yen was little changed at 135.87 per dollar
Bonds
# The yield on 10-year Treasuries advanced 12 basis points to 2.93%
# Germany’s 10-year yield advanced three basis points to 1.21%
# Britain’s 10-year yield advanced four basis points to 2.09%
Commodities
# West Texas Intermediate crude fell 1.1% to $98.43 a barrel
# Gold futures fell 1.4% to $1,739.60 an ounce.
India Daybook – Stocks in News
Titan: Q1FY23 was near normal first quarter after a gap of 2 years. (Positive)
Reliance Ind: GAP in pact with Reliance Retail to bring GAP to India. (Positive)
Equitas Small Finance: Gross Advances 21,699cr vs 17,837cr, up 22% YoY. (Positive)
Nykaa: Fashion expands into men's innerwear, athleisure category (From Agencies) (Positive)
Phoenix Mills: Total consumption in Q1 FY23 was Rs. 21,597 mn, 121% of Q1 FY20 (Positive)
Raymond: 'Ten X Realty Ltd', unit of company has signed definitive JDA for a project at prime location in Bandra, Mumbai. (Positive)
PVR: Opening of 4 screen multiplex in PVR R Odeon Mall, Ghatkopar East, Mumbai. (Positive)
Oil downstream stocks: Brent Crude slips below $100 mark. (Positive)
Asian Granito: Company will be launching a new product in Large Slab Tiles, Mosiac Tiles and Sanitaryware (Positive)
Deep Ind: Received Letter of Award from ONGC worth Rs 150cr (Positive)
JKEKT: To merge its JV into the company. The JV was formed between JTEKT India and one of the promoter entities. (Positive)
Ethos: Signed an exclusive distribution agreement with the globally-renowned watch and jewellery brand Jacob & Co. (Positive)
Bharti Airtel: It will now buyback bonds worth up to $450 million as against earlier planned buyback of $300 million. (Positive)
TWL: HDFC Mutual Fund cuts Titagarh Wagons stake to 7.02% (Neutral)
City Union Bank: Bank plans to raise upto Rs 500 cr from QIP (Neutral)
Sobha: Achieved highest ever quarterly sales volume of 1.36 million sft – largely flat QoQ; Up 52% YoY. (Neutral)
PTC India: Revenue down 21.2% at Rs 2831 cr vs Rs 3593 cr, Net profit up 2.5x at Rs 156 cr vs Rs 63 cr.
Oil upstream stocks: Brent Crude slips below $100 mark.