Market Movers: What changed for D-Street while you were sleeping

NEW DELHI: A GST Council meeting and US President Donald Trump’s impeachment vote are two key events lined up for Tuesday, which could shape the direction of the market in the short term.

Here’s breaking down the pre-market actions.

TRADE SETUP
Singapore trading sets stage for positive start
Nifty futures on the Singapore Exchange-traded 15 points, or 0.12 per cent, higher at 12,207, indicating a positive start for Dalal Street.

Tech view: Nifty forms bullish candle
Nifty50 resumed its uptrend on Tuesday after a brief halt on Monday. The index formed a bullish candle on the daily chart and negated the negative pattern formed in the previous session. Analysts said if the index manages to trade above 12,070, it could attract more buying interest.

Asian shares rest at highs
Asian stocks took a breather at 18-month peaks on Wednesday having climbed for five straight sessions, while the British pound was licking its wounds as revived Brexit fears came back to bite it. MSCI's broadest index of Asia-Pacific shares outside Japan was dead flat in thin early trade, just off its highest since June last year. Japan's Nikkei dipped 0.1 per cent and away from its 2019 top.

US stocks extend record rally
Wall Street's major indices inched higher on Tuesday, extending their record-setting rally, as strong housing and manufacturing data bolstered investors' confidence in the US economy. The Dow Jones Industrial Average rose 31.27 points, or 0.11 per cent, to 28,267.16, the S&P500 index gained 1.07 points, or 0.03 per cent, to 3,192.52 and the Nasdaq Composite added 9.13 points, or 0.1 per cent, to 8,823.36.

Crude oil prices retreat on stock buildup
Oil retreated on Wednesday after rising more than 1 per cent in the previous session as U.S. industry data showed a surprise build in crude stocks but hopes for firmer demand next year checked a deeper fall in prices. Brent crude futures dropped 21 cents, or 0.32%, to $65.89 a barrel by 0110 GMT on Wednesday. The international benchmark rose 1.2% to $66.10 a barrel on Tuesday.

Prince Pipes IPO opens today
The Rs 500-crore initial public offer (IPO) by Prince Pipes and Fittings is all set to hit the primary market on Wednesday. The price band for the issue has been fixed at Rs 177-178 per share. While the recent IPOs have seen a solid response from investors, analysts are mixed on this particular IPO.

MF stocks reach over-valued zone
Mutual fund penetration in India is just a quarter of the global average, but valuations of Indian asset management companies are outpacing global peers by a wide margin. Shares of HDFC AMC and Reliance Nippon Life Asset Management trade at a trailing multiple of 71 and 44, respectively, making them the most expensive asset management companies compared with the average P/E of 19.6 for global AMCs, Bloomberg data showed.

FIIs buy Rs 1,248 crore worth stocks
Net-net, foreign portfolio investors (FPIs) were buyers of domestic stocks to the tune of Rs 1,248 crore on Tuesday, data available with NSE suggested. DIIs were net sellers to the tune of Rs 908 crore, data suggests.

MONEY MARKETS
Rupee: The rupee pared early morning gains to settle 2 paise down at 70.98 against the US currency on Tuesday amid lack of any major triggers on the domestic front.

10-year bonds: India 10-year bond yield fell 0.71 per cent to 6.75 after trading in 6.75-6.81 range.

Call rates: The overnight call money rate weighted average was 5.08 per cent, according to RBI data. It moved in a range of 3.60-5.30 per cent.

THE DAY PLANNER

• GST Council Meeting
• Trump impeachment vote
• ECB President Lagarde Speech
• BoE Gov Carney Speech
• Dec API Crude Oil Stock Change
• Japan's Nov Balance of Trade
• UK Nov Inflation Rate

MACROS

Trump impeachment vote today
A congressional panel on Tuesday cleared the way for a historic vote on impeachment of US President Donald Trump in the Democratic-controlled House of Representatives on Wednesday. The House Rules Committee by a party-line vote of nine to four approved legislation that provides for six hours of debate, with final votes to follow on charges of abuse of power and obstruction of Congress.

GST Council to weigh real estate booster
A boost for the real estate sector, rationalisation of tax rates on lotteries, making refunds seamless for exporters are the topics set to dominate Wednesday’s GST Council meeting, as per the agenda for the meeting. The government is looking to balance revenue collections between states and the Centre besides ironing out problems faced by a few industries. The council is also likely to consider a proposal to further restrict input tax credit as it eyes measures to plug revenue leakages, a move that could pose cashflow problems for India Inc.

Budget likely to tinker with income-tax rates
The government is likely to trim personal income tax rates and cut the tax on long-term capital gains from equity investments in its next budget, in a bid to spur economic growth, Reuters reported quoting four government officials. “We are discussing tinkering with income-tax rates so that more money is put in the people’s hands,” a senior government official directly involved in budget discussions said.

NBCC set to take over Jaypee Infra
The Committee of Creditors of Jaypee Infratech has selected state-run NBCC to acquire the realty developer after lenders and homebuyers concluded their voting on Monday night. NBCC’s proposal received 97.4% of total votes with 39.6% of lenders and 57.7% of homebuyers backing the offer. Ten out of 12 lenders voted in favour of NBCC’s proposal, including lead lender IDBI Bank. NBCC has sought three months to raise money and plans to start actual work on the project by the first week of May.

IMF to cut India’s growth estimates in Jan
The International Monetary Fund (IMF) will revise estimates for India’s economic growth in January, which will be a significant downward cut over the previous estimate, its chief economist Gita Gopinath said on Tuesday. “India is one of the emerging markets where growth has surprised on the downside,” she at Times Networks’ India Economic Conclave. IMF currently projects India to grow at 6.1% in 2019 and 7% in 2020.

GST fraud: Govt may give taxman more teeth
The government is set to amend Section 49 of the Goods and Services Tax (GST) law that would allow tax officers to block input tax credit of companies if they suspect fraud, an agenda note for the GST council meeting circulated to all state finance ministers and senior tax officials indicated. Industry trackers said giving additional powers to the tax officers may create problems in the coming days. Senior tax officers would be able to partially or fully block input tax credit of companies henceforth. This comes at a time when indirect tax officers have been arresting promoters if they suspect “circular trading” with an aim to avail input tax credit.

BS-VI upgrade: Refiners want to raise prices
Refiners are seeking government support for their plan to raise consumer prices to recover heavy investments they have made in upgrading their facilities to produce less polluting Bharat Stage-VI fuel. Refiners will need to recover an additional 80 paise a litre on petrol and Rs 1.45 a litre on diesel for five years for a decent return on their investments, according to industry executives. State-run refiners, including IOC, BPCL,HPCL and Mangalore Refinery and Petrochemicals, have together spent about Rs 35,000 crore in upgrading their units for BS VIcompliant fuels, to meet the official target of supplying the less-polluting fuel across the country from April 1, 2020. Private refiners, too, have also spent heavily on this.

High interest rates hurting India growth
India missed the bus by not turning gains of lower inflation into low interest rates, which is pricking the economy on the growth front, a member of the economic advisory council to PM (EAC-PM) said on Tuesday. Efforts should be mounted to lower the interest rate burdens for borrowers, and RBI's pause had a "terrible" effect of costs for a third of borrowers going up by 0.25%, Neelkanth Mishra, who is also the India strategist for Swiss brokerage Credit Suisse, said.

Trai defers zero-IUC regime for a year
The telecom regulator has deferred by a year implementation of the zero-interconnect usage charges (IUC) regime that was slated to kick in from January 2020, giving some relief to India’s older operators Vodafone Idea and Bharti Airtel who can now keep getting some revenue on this account. “For wireless to wireless domestic calls, termination charge would continue to remain 6 paise only per minute upto December 31, 2020…from January 1, 2021, onwards the termination charge for wireless to wireless domestic calls shall be zero,” the Telecom Regulatory Authority of India (Trai) said in a release Tuesday.