Amfi data showed a rise in fresh mutual fund SIP registrations in July as well as in overall mutual fund asset under management, but equity funds witnessed negative net flow of Rs 2,480 crore. What explains this withdrawal, when new retail investors are coming into equities in droves? Some say investors who had come in after the 2016-17 rally and saw their investments plunge in the Covid crash used the revival to book profit; other say some investors saw better opportunity in direct equity and made the shift; yet others say job losses and shrinking incomes are forcing people to dip into their savings, and last but not the least, some far-sighted investors may have made the switch to debt funds anticipating a second dip in stocks. Yet, a steady drop in SIP flows - typically sticky even in turbulent markets - does not bode well!
MARKET CUES: Where do we stand >>>  | Nifty futures on the Singapore Exchange traded 44 points higher at 7 am (IST) this morning, signaling a positive start ahead for Dalal Street. |
| On Monday, Nifty50 breached its crucial resistance at 10,250 level on a closing basis, but saw intraday profit booking near its previous swing high of 11,341. The index saw a small bearish candle on the daily chart, with a large upper wick, as it settled near where it had opened |
| Asian stocks opened modestly firmer on Tuesday after a lackluster session on Wall Street. Japanese stocks rose more than 1% as the market reopened after a holiday Monday. Australia and South Korea had more moderate gains. |
| US stocks ended mixed on Monday. Dow jumped 1%, the S&P500 inched up and the Nasdaq closed lower as investors extended a rotation into value stocks from heavyweight technology-related names. |
| The rupee rose by 3 paise to settle at 74.90 against US dollar on Monday tracking positive domestic equities. The unit traded in a narrow range |
| The US dollar traded near a one-week high. The yen was little changed at 106.09 per dollar, while the euro traded near the weakest in almost two weeks after falling 0.4%. The offshore yuan was at 6.96 to the dollar. |
| Crude oil extended gains. Brent crude added 7 cents, or 0.2%, to $45.06 a barrel, while WTI crude rose 14 cents, or 0.3%, to $42.08 |
| Gold prices fell to Rs 55,350 per 10 gm, while silver climbed to Rs 75,150 per kg. On Monday, August gold futures jumped 0.29 per cent to Rs 54,946 on MCX, while silver September futures closed at Rs 75,394. In global markets, the yellow metal traded at $2,024.85 an ounce, down 0.1%. |
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Voda Idea exploring stake sale to LIC?… Vodafone Idea on Monday described the talks about LIC picking up a stake as "baseless speculation". Market players and sources within the insurance giant, however, said there were initial talks between the two, and that the government-run life insurer may look at the troubled telecom service provider to buy a large minority stake. Market sources said if a deal is finalised, the life insurer may pick up the stake through the preferential allotment route. In case the LIC-Vodafone Idea deal is sealed, it would help revive investor confidence in the telco.
Read More Amazon Prime Day sales eclipse Diwali numbers… Amazon India's Prime Day sales, its first major event after the virus outbreak, have surpassed the daily numbers of its flagship sale during Diwali last year, according to two people aware of the matter. It clocked over $600 million in two days of Prime Day sale last week as demand for products, primarily electronics, surged online after Covid-19 kept shoppers at home. But the gross aggregate numbers for Prime Day sales will still be lower as the Diwali event happens over a five-day period.
Read More Pace of economic recovery improving… The pace of economic recovery improved during the previous week on account of divergent trends in indicators like mobility and employment, Nomura said in a note on Monday. The Nomura India Business Resumption Index increased to 71.8 in the week ended August 9, after being stuck around the 70-mark for last three weeks. The weekly tracker of the pace at which economic activity normalises stood at 70.4 in the prior week. According to the note, while Google's retail and recreation mobility index and Apple's driving index picked up incrementally, Google's workplace mobility worsened.
Read More Aramco doing due diligence on RIL… Saudi Aramco, one of the world's biggest oil companies, will decide on its proposed $15 billion investment in Reliance Industries' oil and petrochemicals business after reviewing the findings of a due diligence exercise. Aramco CEO Amin Nasser told an investor call on Monday evening that "it is a big deal" and that "Aramco is going to take time to decide". He did not give any timeline.
Read More Indus Towers nears deal with Jio… Indus Towers is close to signing long-term fibre leasing contracts with Reliance Jio Infocomm, Tata Sky and Tata Teleservices to support a combination of home broadband, DTH and enterprise businesses needs as the company rolls out its digital smart city infrastructure in key markets. Indus, a three-way joint venture between Bharti Infratel, the UK's Vodafone Group and Vodafone Idea, is in advanced talks to lease out fibre resources in Vadodara, Gurgaon and Dehradun, where the tower company is setting up infrastructure for smart cities.
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MFs see first net outflow in 4 years… Indicating unease among retail investors after the recent rally in the stock market, equity mutual funds in July witnessed a net outflow for the first time in four years. Inflows through the systematic investment plan route also showed a marginal decline during the month, data released by industry trade body AMFI showed. However, strong inflows through the debt fund route lifted the MF industry's assets under management in July by a little over Rs 89,800 crore to more than Rs 27 lakh crore.
Read More Banks struggle to reach lending pact… Banks are struggling to create a common pact for lending to companies that will need funds to grow, rejig their loans, and battle the slowdown wrecked by the Covid-19 pandemic. Large private and foreign banks have voiced their reservations against SBI's proposal to frame an omnibus inter-creditor agreement (ICA) which would be binding on all lenders. Under a rigid and uniform ICA, a bank which is unwilling to give fresh loan in proportion to its share in the total outstanding loan will be required to sell off its exposure and exit the consortium.
Read More SC questions spectrum sale by bankrupt telcos… The Supreme Court has questioned the sale of spectrum by bankrupt telcos Reliance Communications and Aircel, and sought to know from the government how it plans to recover Rs 43,000 crore of AGR dues from these companies if all their assets were sold off in the interim. The observations that came Monday could potentially impact the resolution plans of the two telcos. The insolvency court has already approved the sale of Aircel's assets, and was about to take a call on RCom and its units.
Read More Meanwhile... China slaps tit-for-tat curbs on US officials… China said it will sanction 11 Americans in retaliation for similar measures imposed by the US on Friday, but the list doesn't include any members of the Trump administration. The US said on Friday that it was placing sanctions on 11 Chinese officials and their allies in Hong Kong, including Chief Executive Carrie Lam, over their roles in curtailing political freedoms in the former British colony.
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