What really triggered the post-Budget stocks rally on Dalal Street? Did it dawn one fine morning on all investors that underneath the not-so-impressive Budget, there lies a layer that can help the economy rebound and grow? That too when markets are navigating so much uncertainty due to the coronavirus! As one analyst points out, it's liquidity playing its trick again. US bond yields are almost nearing their previous lows and because of that, money is sloshing into risk-on trade in assets outside.
STREET PULSE: Where we stand Nifty futures on the Singapore Exchange traded 28 points higher at 7 am (IST), indicating a good start ahead for Dalal Street. Asian shares and Wall Street futures nudged higher on Wednesday amid hopes the worst of the coronavirus in China may have passed, although prevailing uncertainty about the outbreak has kept investors wary.
HERE'S WHAT TO WATCH  | MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.1%, while Australian shares rose 0.27% and Japan's Nikkei stock index gained 0.45%. |
| On Wall Street, Dow fell 0.48 points to 29,276 in overnight trade, while S&P500 gained 5.66 points to 3,357 and the Nasdaq 10.55 points to 9,638. |
| Oil prices rose for a second day on Wednesday amid preliminary signs that new coronavirus cases are slowing in China, easing concerns over the demand impact from the disease in the world's second-largest oil consumer. Brent crude rose 73 cents, or 1.3%, to $54.75 a barrel while WTI rose 46 cents, or 0.9%, to $50.39. |
| The rupee settled unchanged at 71.28 against the US dollar on Tuesday ahead of the release of key domestic macroeconomic data. |
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Sebi Margin Rule Put on Hold… Sebi and stock exchanges have put on hold a proposal that would have required traders to pay the entire initial margins before executing even intraday trades, a move brokers said would have hit transaction volumes and made business unviable for many Dalal Street intermediaries. So, instead of its earlier proposal, Sebi could now allow brokers to part-finance their clients' initial margin requirements. At present, intra-day traders squaring off their positions on the same day pay only a tiny fraction of the upfront money needed to initiate a trade.
Read More Bandhan Awaits its Day in the Sun... Bandhan Bank's weight in the MSCI India Index is likely to go up by 32 basis points in its next rejig due to an increase in free float, which could trigger an inflow of about Rs 700 crore from overseas passive funds, Morgan Stanley said. MSCI will announce its review of indices Wednesday. Analysts tracking the Indian bank are bullish, with 14 of the 20 brokerages assigning a 'buy' rating, with an average target price of Rs 625, or 36% higher than the current market price.
Read More Adani, Vedanta Vie for Lanco Assets… Adani Group and Vedanta are competing to acquire Lanco's Amarkantak power plant located in the mine-rich Korba area of Chhattisgarh after it was admitted for insolvency proceedings by NCLT last year. Both parties are conducting due diligence on the power plant, which has 600 MW of operational thermal power capacity, 1,320 MW of under-construction capacity, and another 1,320 MW at the planning stage, after expression for interest was invited in December; neither has made a financial offer yet.
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US Lifts India Privileges… Ahead of President Donald Trump's visit on February 24-25, the US on Monday removed India from its list of developing countries that are exempt from investigations into whether they harm American industry with unfairly subsidised exports. The USTR eliminated a host of countries including Brazil, Indonesia, Hong Kong, South Africa and Argentina from getting special preferences under the methodology for countervailing duty investigations, stating that the previous guidance that dated back to 1998 "is now obsolete".
Read More TaMo's JLR in Long Break… Tata Motors' JLR subsidiary has told its vendor network that the shutdown of its manufacturing operations in China would be extended till February 17, as per the guidelines of the local authorities following the coronavirus outbreak there. Tata Motors is currently meeting institutional investors to update them on usual business matters. The shutdown at the plant due to the lunar new year was to end on February 4.
Read More Meanwhile... Helping Hand… The government's Rs 12,500 crore Alternate Investment Fund, which offers last-mile funding to stuck housing projects, has disbursed funds to two housing projects and expects to fully deploy its money in two years. SBI Capital Markets, which has been entrusted by the government to manage the fund to kick-start stalled projects across the country, said the investments would kick-start the much-awaited investment cycle in residential realty and trigger private investor interest in housing projects.
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