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ETMarkets Morning Podcast: How will markets fare in this session?

Hey there! Good Morning. This is Saloni Goel from with the morning briefing of news, views and cues you need to know before starting your day on Dalal Street.

Nifty futures on Singapore Stock Exchange, overnight trade in US stocks and Asian trading this morning all point to further weakness in the domestic market on Wednesday after a five-session battering. Finance Minister Arun Jaitley’s speech on Tuesday, warning some near-term pain from GST is also likely to make investors take guard.

US stocks extended losses in overnight trade after US Senate Republican leader Mitch McConnell decided to put off a planned vote on a bill to dismantle the Affordable Care Act following a revolt within the party. The Dow Jones Industrial Average declined almost 100 points to close at 21,310, while the S&P500 index fell 20 points to 2,419 and the Nasdaq lost 100 points to close at 21,310, while the S&P500 index fell 20 points to 2,419 and the Nasdaq lost 100 points to 6,146.

Asian shares slumped this morning after the hard knock on Wall Street. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.2 per cent in early trading, while Japan’s Nikkei slipped 0.2 per cent.
Nifty50 futures on the Singapore Stock Exchange were trading 30.50 points lower at 9,486 early this morning, indicating a negative opening for the

for the domestic market.

On Tuesday, BSE benchmark Sensex shed 180 points amid profit taking and weak rollovers ahead of June series F&O expiry on Thursday. Banking stocks took a beating after RBI told lender to set aside at least 50 per cent of the loan amount as likely losses for all cases referred to the insolvency process. The Nifty50 fell below 9,500 level in intraday trade for the first time in 22 sessions.

Shares of public sector bank fell the most in over a month and the Nifty50 fell for the sixth straight day after the Reserve Bank of India dashed banks’ hopes by ordering them to make hefty provisioning on accounts referred for bankruptcy.

On the technical charts, tthe Nifty50 confirmed a ‘lower top lower bottom’ formation for the first time in six months, signalling weakness ahead.

Market-wide rollover of futures and options contracts to July series stood at 38 per cent till Tuesday, which were lower than the average of 40 per cent seen in the comparable period of last three series. Rollover of Nifty futures stood at 48 per cent, which was higher than the average rollover of 43 per cent seen in last three series.

The weakness in equities caused the rupee to pare all morning gains and close flat against the US dollar on Tuesday. The domestic currency ended the day at 64.54 to the dollar, down 0.03 per cent from Friday’s close of 64.52.

Crude oil prices fell early on Wednesday after reports of rising US fuel inventories underscored concerns that a three-year old crude glut is far from over. Early Wednesday Brent futures were trading 33 cents down at $46.32 a barrel, while WTI crude futures slipped 38 cents tto $43.86 a barrel.

In other news, Finance Minister Arun Jaitley on Tuesday said people may face some difficulty initially when GST is rolled out, but the new regime would help cut tax evasion and check price rise in the long run.
AU Small Finance Bank will hit the capital market with an IPO on Wednesday. The small finance bank raised Rs 563 crore on Tuesday by allotting 1.57 crore shares to 34 anchor investors at the upper end of the price band at Rs 358 a share. The price band at Rs 358 a share. The price band for the offer has been fixed between Rs 355 and Rs 358.

Lastly, a quick look at some of the interesting headlines from the print edition of ETMarket.

Tuesday’s slump on Dalal Street is a short-term dip within a medium-term uptrend. After declining 1.5% on a closing basis through six sessions, the Nifty is delicately poised near the 9,500 mark. It’s this mark that markets will be eagerly eyeing on Wednesday ­ a decisive break below 9,500 could take the bellwether index down to around 9,340-9,350 this expiry itself, said Hormuz Maloo, independent market analyst.

Equity-oriented products of mutual funds have seen their strongest-ever investor appetite in the past year, but one scheme has stood out in the inflow deluge. HDFC Prudence Fund has seen assets under management soar 250% or Rs 17,000 crore in the last 15 months to Rs 24,479 crore. The balanced fund category’s assets increased 147 per cent in the period.

The jump in assets has made HDFC Prudence the largest scheme that is taxed as an equity product in the domestic mutual fund industry .

Of the 12 companies that have been pushed to bankruptcy proceedings, shares of JP group companies have been scoring fresh 52-week highs since the past few day. JP Associates, the group’s flagship company, has been the top performer. The value of JPA’s non-

-core assets including land bank, road projects, power and cement plants are much higher than its debt. Hence, the Street expects the company’s debt to come down meaningfully once these assets are sold.

We would leave you with that much for now.

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Have a good trading day ahead!