Sebi has just permitted cross-margining among the highly correlated equity indices. This was earlier permitted only between index futures and underlying constituents/futures, stock futures and underlying stocks; and ETFs and their underlying constituents. The move to allow offset for opposite positions in these indices will cut margin requirements for derivative traders at least by a half, leading to a spike in volumes on the F&O counter.
STREET PULSE: Where we stand Asian shares edged higher on Monday after U.S. President Donald Trump said over the weekend that trade talks with China were moving along "very nicely".
HERE'S WHAT TO WATCH  | SGX Nifty traded some 26 points lower at 7 am (IST), signalling possible weakness ahead on Dalal Street. MSCI index for Asia-Pacific shares outside Japan firmed up 0.05% at 534.63, testing a recent six-month peak. Japan's Nikkei rose 0.2% to inch closer to a recent 13-month high. Australian shares rose 0.5% to a two-week high while South Korea's KOSPI was off 0.2%. |
| Wall Street showed optimism on Friday. The Dow inched up a tad while the S&P500 climbed 0.3% and the Nasdaq Composite 0.5%. |
Oil prices fell on Monday on renewed caution over the prospects of a trade deal between the US and China. Brent crude fell by 39 cents, or 0.6%, to $62.12 a barrel while WTI crude sliiped 35 cents, or 0.6%, to $56.89.
Read More The rupee on Friday plummeted by 31 paise to hit an over three-week low of 71.28 against the US dollar after Moody's Investors Services cut India's rating outlook to negative citing growth concerns.
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A Deal in the Making... Sunil Kant Munjal's Hero Corp is set to buy a significant minority stake from Analjit Singh in Max Financial Services. According to two people familiar with the development, Singh, who has pledged more than 90% of the promoter stake in Max Financial, is raising funds to deleverage the balance sheet. The promoter leverage has been a drag on the listed parent's stock. The listed Max Financial houses the largest non-bank private life insurer in the country, Max Life Insurance.
Read More What's Hot? Midcap funds — laggards for the last two years — are back on investment advisors' recommendation list. After the underperformance since January 2018 following the sharp drop in share prices, analysts are betting that their valuations have hit a nadir. Though few in the market expect an immediate rebound due to the slowdown, advisors are asking clients to accumulate mid-cap schemes' unit for a three-year period.
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Topline Woes... India Inc's aggregate topline growth disappointed once again in September quarter. "As per the current trend from Nifty and NSE 500 companies, topline growth in the second quarter is the weakest in eight quarters," says Sunil Sharma, CIO, Sanctum Wealth Management. Among the factors leading to weak topline growth, the most important is the inventory clearing strategy adopted by the auto sector in the second quarter. Global recessionary fears and the resultant fall in metal prices is the other reason for weak aggregate revenue growth.
Read More DHFL Cliffhanger: Most public sector banks have held back from making bad loan provisions of advances to troubled housing finance company DHFL despite the account being 'redflagged' under RBI's framework for dealing with fraudulent disbursements. The implication of not making provisions is that lenders may have to set aside a larger amount in the future. The resolution for a red-flagged account is recovery or a new owner coming in. Given the shortfall in assets, a new owner will take over only after significant writedowns.
Read More Meanwhile... In a temporary relief to thousands of Indians living in America, a US court has refused to strike down, for the time being, an Obama-era rule that allowed spouses of H-1B visa holders to work in America. The H-1B visa is a non-immigrant visa that allows the US companies to employ foreign workers in specialty occupations. A 2015 rule issued by US President Donald Trump's predecessor Barack Obama allowed work permits for certain categories of H-4 visa holders, primarily spouses of those having H-1B work visas waiting for their Green Card, to work in the US.
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