SGX Nifty up 55 points; here's what changed for market while you were sleeping

Hope of a $1.4 trillion US spending package and a likely regulatory authorisation to Moderna Inc's Covid vaccine in the US this week pushed stocks higher across Asian markets on Wednesday. Domestic stocks, too, look set to join the optimism when trading resumes at 9.15 am.

Here’s breaking down the pre-market actions:

STATE OF THE MARKETS

SGX Nifty signals a positive start
Nifty futures on the Singapore Exchange traded 55 points, or 0.41 per cent, higher at 13,633.50, in signs that Dalal Street was headed for a positive start on Wednesday.

Tech View: Nifty bulls defending support
Nifty50 on Tuesday tested its immediate support range at 13,450-470, before recovering and closing in the black. With this, the index formed an indecisive Doji candle on the daily chart for the fourth consecutive day. The bulls seem to be defending the support levels rigorously, but the upside seems limited, analysts said.

Asian stocks rise in early trade
Asian stocks climbed on Wednesday as investors moved with confidence that vaccinations and additional monetary and fiscal support from governments will drive economic growth. Australian S&P;/ASX 200 rose 0.77 per cent in early trading. Japan's Nikkei 225 added 0.30 per cent, Hong Kong's Hang Seng was up 0.55 per cent. Shanghai Composite edged 0.12 per cent higher. E-mini futures for the S&P; 500 rose 0.05 per cent.

Oil slips on rise in US inventory
Oil prices dropped on Wednesday on a surprise gain in crude oil inventories in the United States and as investors continued to worry about demand for fuel being squeezed amid tighter lockdowns in Europe to counter the coronavirus pandemic. Brent crude futures fell 8 cents, or 0.2 per cent, to $50.68 a barrel, while US West Texas Intermediate (WTI) crude futures fell 6 cents, or 0.1 per cent, to $47.56 a barrel.

US stocks settled higher
Stocks notched broad gains on Wall Street Tuesday as renewed optimism that Washington will deliver more aid to the struggling economy put investors in a buying mood. The S&P; 500 rose 47.13 points to 3,694.62. The Dow Jones Industrial Average gained 337.76 points, or 1.1 per cent, to 30,199.31. The Nasdaq climbed 155.02 points, or 1.3 per cent, to 12,595.06. That eclipsed the index's last all-time high set a week ago.

Mrs Bectors IPO subscribed 3.72 times on Day 1
Eliciting robust response from investors, the initial share sale of Mrs Bectors Food Specialities got oversubscribed within a few hours of opening for subscription on Tuesday and ended the day with 3.72 times subscription. After Burger King India, this is the second Initial Public Offer (IPO) this month to have received over subscription in a few hours of opening for public subscription.

FIIs buy Rs 2,484 cr worth of stocks
Net-net, foreign portfolio investors (FPIs) were buyers of domestic stocks to the tune of Rs 2,484.09 crore, data available with NSE suggested. DIIs were net sellers to the tune of Rs 2,666.79 crore, data suggests.

MONEY MARKETS
Rupee: The Indian rupee depreciated by 8 paise to settle at 73.63 against the US dollar on Tuesday, taking cues from weaker Asian peers against the American currency.

10-year bonds: India 10-year bond yield fell 0.08 per cent to 5.94 after trading in 5.92-5.94 range.

Call rates: The overnight call money rate weighted average stood at 3.15 per cent, according to RBI data. It moved in a range of 1.90-3.50 per cent.

DATA/EVENTS TO WATCH

• Japan Balance of Trade Nov (05:20 am)
• Japan Jibun Bank Manufacturing PMI Flash Dec (06.00 am)
• UK Inflation Rate YoY Nov (12:30 pm)
• UK PPI Core Output YoY Nov (12:30 pm)
• UK Core Inflation Rate MoM Nov (12:30 pm)
• Euro Area Markit Manufacturing PMI Flash Dec (02:30 pm)
• UK Markit/CIPS Manufacturing PMI Flash Dec (03:00 pm)
• Euro Area Balance of Trade Oct (03:30 pm)
• US Markit Composite PMI Flash Dec (08:15 pm)
• US NAHB Housing Market Index Dec (08:30 pm)

MACROS
Exports shrank 8.74% in Nov... India’s exports fell 8.74% in November, steeper than the 5.12% dip in October, at $23.52 billion, dragged by petroleum goods, engineering goods, chemicals and gems and jewellery. However, the decline was lower than 9.07% as shown by preliminary data released by the commerce and industry ministry earlier this month. Official data released Tuesday showed India’s trade deficit touching a 10-month high of $9.87 billion in November though it was about 23% less than $12.75 billion trade deficit recorded in November 2019.

Markets await Fed signals... Markets will now look to the US Federal Reserve for new projections on whether the economy will suffer a double-dip recession or is on the cusp of a vaccine-inspired boom. The central bank is to release a statement later on Wednesday, with a press conference set for the afternoon. Some analysts expect Fed Chair Jerome Powell will underscore the increasing short-term risks to the US economy. The Fed could also give guidance on when and how it might change its bond purchases, impacting views on longer-term yields and exchange rates.

Bad loans hurting monetary transmission... Soured loans and weak capital positions mean Indian banks cannot cut their interest rates in step with the central bank’s main policy rate, reducing the effectiveness of monetary policy, the Reserve Bank of India said in a working paper on Tuesday. The paper, co-authored by RBI monetary policy committee member Janak Raj and three others, said concerns about asset quality must be addressed and lenders’ capital positions strengthened to ensure policy actions have their full impact.

SC slams NCLAT's Mistry verdict... The Supreme Court said it was completely surprised by the manner in which the National Company Law Appellate Tribunal reinstated ousted Tata Sons executive chairman Cyrus Mistry without even being asked to do so. The observations by Chief Justice of India SA Bobde came during a hearing on Tuesday on appeals and crossappeals by the Tatas and the Mistry family against the tribunal’s decision of December 2019.

NBFCs seek liquidity support in Budget... Non-bank lenders that held pre-budget consultations with finance minister Nirmala Sitharaman on Tuesday have yet again sought liquidity support from the government and RBI. Their demands include allowing non-bank lenders to raise liquidity through the issuance of “on-tap” secured bonds and non-convertible debentures. NBFCs also want to directly access funds through the ontap TLTRO scheme of the RBI, demand so far unmet.

Oaktree may use an AIF for DHFL buy... US asset manager Oaktree Capital, which is in a fierce race to acquire the bankrupt mortgage lender Dewan Housing Finance Corporation (DHFL), plans to use an alternative investment fund (AIF) for taking over DHFL’s life insurance venture Pramerica and comply with India’s foreign ownership rules in the insurance industry. AIF is the regulatory term for pooled private investment vehicles like private equity and venture capital funds.

Bandhan shopping for an insurance firm... Bandhan Financial Holdings, the promoter of Bandhan Bank, has widened its search for acquiring a controlling stake in a life insurance company even as it has bid for the 51% Reliance Capital’s equity shares in Reliance Nippon Life Insurance. The holding company is in talks with two more insurance firms, showing urgency for its proposed foray into insurance. It has signed non-disclosure agreements with these firms