Heres a lowdown on top macro triggers that may move market on Wednesday. This report was compiled from agency feeds.
US Bond Yields Cross 3%, Markets Under Pressure
A rise in U.S. bond yields above the 3% threshold and warnings from bellwether U.S. companies of higher costs driving fears that corporate earnings growth may peak soon, are spooking Asian markets. Wall Street shares lost steam the previous day, with the S&P 500 .SPX falling 1.34%, the most in two-and-a-half weeks. The 10-year yield, a benchmark for global borrowing costs, has been driven steadily higher by a combination of concerns over inflation, growing debt supply, and rising Federal Reserve borrowing costs. The bond yields have been rising in India as well with yields hovering near 8%.
Crude Prices on Fire
A rise in global crude oil cost to around $75 per barrel lifted the domestic retail petrol to become dearer by 13 paise to Rs 74.63 per litre from Monday's cost of Rs 74.50 per litre. Petrol prices climbed to new multi-year highs in other major metro cities — Kolkata, Mumbai and Chennai — at Rs 77.32, Rs 82.48 and Rs 77.43 per litre respectively on Tuesday. Diesel prices, too, touched record levels in Delhi, Kolkata, Mumbai and Chennai. They rose to Rs 65.93, Rs 68.63, Rs 70.20 and Rs 69.56 per litre respectively. Oil rose above $75 a barrel on Tuesday to its highest since November 2014, supported by production cuts by Opec prospect of renewed US sanctions on Iran.
Telecom Tribunal Stays Trai Order on Predatory Pricing
The telecom tribunal has stayed a regulatory order that reset the threshold for predatory pricing and required operators to report all tariffs in the interests of transparency and non-discrimination, offering relief to Indias top telcos that said the revised norms benefitted only Reliance Jio Infocomm. The interim ruling also barred Trai from imposing any penalty on telcos for violating the new rules on reporting tariff plans, including offers to select subscribers, until further orders.
Pressure to Cut Duties on 90% of Goods from China?
India is likely to face greater pressure to eliminate duties on 90% of goods it trades with China under the mega trade agreement among 16 Asia Pacific countries that is in the works. China, which till now has not aggressively pushed to fast-track negotiations in the Regional Comprehensive Economic Partnership (RCEP), is now keen to “engage actively” ahead of the next round of talks later this week.This follows Washingtons renewed interest in the Trans-Pacific Partnership (TPP) agreement.
I-T Framing Rules on Capital Gains Tax Where STT Not Paid
The income tax department has put out draft rules specifying situations where the recently imposed capital gains tax would apply even though no securities transactions tax (STT) has been paid. Bonus shares, policy compliant foreign investment, shares acquired via a will or inheritance, court or regulator approved acquisition, shares acquired under insolvency resolution and those under government disinvestment among others would be eligible for the new capital gains tax regime even though STT is not paid. Comments have been sought on the draft rules that recognise genuine transactions where STT could not have been paid.
Unseasonal Rains Cool Off AC, Fridge Sales This Summer
Narrowing Trade Surprise with US
India is seeking more oil, drones and aircraft from the US to help narrow its $28 billion trade surplus amid rising concerns of possible collateral damage to its economy from President Donald Trumps trade spat with China. Asias third-largest economy could bridge the surplus by up to $4 billion through oil imports alone. In the meantime, conflicts over trade tariffs remain. India is seeking an exemption to steel and aluminum tariffs imposed by the U.S.
Worry for Indian Techies as US Plans to End Work Permits for H-1B Visa Spouses
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Bharti Airtel Net Profit Slumps 78%
Bharti Airtels fourth-quarter net profit slumped 78%, dropping for the eighth straight quarter, stung by a mix of continued pricing aggression from Reliance Jio, a cut in international termination rates and more subscribers rapidly moving to lower priced bundled packs. The country's largest carrier reported a loss of Rs 652.3 crore in its operations in India and South Asia, before exceptional items, for Q4. – the first time in 15 years – even as Africa ops showed a profit of Rs 698.7 crore. Overall, the carrier's profit fell to Rs 83 crore in the three months ended March from Rs 373.4 crore a year earlier.
Arcelor Bids Higher than Numetal for Essar Steel
ArcelorMittals bid for Essar Steel in the first round of bidding for the stressed asset is likely to be higher than that of Numetal. The financial bids submitted by the two companies on February 12 were opened on Tuesday by the committee of creditors (CoC) at a marathon meeting lasting more than seven hours.
IHH, Radiant Submit Binding Offer for Fortis
Malaysian healthcare group IHH and KKR-backed Radiant Life Care have submitted binding offers for Fortis Healthcare on Tuesday to compete with Manipal-TPG and a joint offer from Hero Enterprise Investment-Burman Family Office. The moves have come a day before the deadline to submit offers.
Rupee Up: The rupee yesteray snapped its six-session losses to end higher by 10 paise at 66.38 against the US dollar due to fresh selling of American currency by exporters and banks.
Bonds Down: Government bonds (G-Secs) weakened further on heavy selling pressure from banks and corporates. The 7.17% 10-year benchmark bond maturing in 2028 went-down to Rs 96.14 from Rs 96.29 previously, while its yield marginal up to 7.74% from 7.72%. The 6.79% G-Secs maturing in 2027 slid to Rs 92.87 from Rs 92.92, while its yield inched up to 7.91% from 7.90%. The 6.68% G-Secs maturing in 2031 dipped to Rs 89.63 from Rs 89.7525, while its yield edged up to 7.95% from 7.93%. The 6.84% G-Secs maturing in 2022 and the 8.20% G-Secs maturing in 2022 were also quoted lower to Rs 96.6475 and Rs 101.58 respectively.
Call Rates Stable: The overnight call money rates held stable at 5.95%, It resumed higher at 6.00% and moved in a range of 6.05% and 5.90%.
Liquidity: The Reserve Bank of India, under the Liquidity Adjustment Facility, purchased securities worth Rs 12,010 crore in 9-bids at the overnight repo operation at a fixed rate of 6.00% as on Tuesday, while it sold securities worth Rs 5,171 crore in 24-bids at the 2-days reverse repo auction at a fixed rate of 5.75% as on April 21.