It is not for nothing that multiple market veterans have blamed a 'new breed of millennial investors' for taking stock prices to absurdly overvalued levels. Jim Cramer of Mad Money fame has warned that the US stocks rally was being shaped by amateur investors biting at low dollar stocks, and warned that the rampant speculation is about to end in a big disappointment. Kevin Smith of Crescat Capital this weekend said "speculation is being championed by a bold new breed of millennial day traders," and shorting stocks "is worthy of a significant allocation today." Dalal Street veteran Vijay Kedia says the Indian market is getting crowded with get-rich-quick investors, who got birth during the Covid-19 lockdown. Not good omen this!
MARKET CUES: Where do we stand >>>  | Nifty futures on Singapore Exchange traded 27 points lower at 7 am (IST) signalling a negative start ahead on Dalal Street |
| On Friday, Nifty50 topped the 10,200 level, much on the expected lines, following a decisive breach of the hurdle at the 10,000 mark in Thursday's session. Analysts said the index has the potential to hit the recent high of 10,338 and even 10,550 level in the short run. |
| Stocks in Asia kicked off the week in mixed fashion as low trading volumes once again suggested a lack of conviction. Hong Kong shares opened lower, while losses in Korea, Australia and Japan were pared back and those main indices traded flat. |
| S&P 500 contracts reversed a slide of as much as 1% to edge higher this morning. On Friday, Wall Street opened higher but cut gains and turned negative by the close amid fears over a resurgence in coronavirus cases across the country. The Dow slipped o.8% or 200 points, while the S&P500 fell 0.5% and the tech-heavy Nasdaq ended flat. |
| The rupee settled 6 paise lower at 76.20 against the US dollar on Friday as strengthening of the US currency and rising COVID-19 cases weighed on investor sentiment. |
| The US dollar touched a three-week high and commodity currencies were stalled on Monday. The greenback was marginally lower against the Australian and New Zealand dollars, and steady on the yuan, euro and British pound. The yen was firm, while the pound held just above a three-week low as did the euro |
| Oil prices nudged higher on Monday on tighter supplies from major producers. Brent crude rose 9 cents, or 0.2%, to $42.28 a barrel while WTI crude gained 1 cent to $39.76 |
| Gold prices rose on Monday to their highest in a month as surging coronavirus infections. Spot gold rose 0.4% to $1,749.54 an ounce after hitting its highest since May 20 at $1,751. In India too, gold prices have surged closer to record highs. On MCX, August gold futures rose about Rs 600 on Friday to settle near record high of about Rs 48,000 per 10 gm on Friday. Silver futures finished 1.5% higher at Rs 48,598 per kg. |
| LOOK WHO'S |  |
Zerodha may get $1 billion valuation… Discount brokerage Zerodha will spend Rs 60-65 crore to buy back Esops this year at a self-assessed enterprise value of Rs 7,000 crore, or around $1 billion. This is significant because it's the first time that a valuation is being ascribed to Zerodha, which has never picked up external capital. The buyback is intended to provide senior management and long-term staffers with liquidity options as Zerodha celebrates its 10th anniversary later this year.
Read More Corp bond mart back in business… Investors are warming up to corporate bonds again, after a temporary freeze following the sudden closure of half a dozen mutual fund schemes by Franklin Templeton. Yields for papers of PFC, REC and HDFC have plunged as much as 35 basis points since June 8, the day the government lifted most of the restrictions on economic activities, leading to demand revival, and as a further reduction in interest rates appeared imminent. Falling bond yields mean higher prices for the papers.
Read More Mumbai flat prices down 8-12%... Residential prices in Mumbai, the country's most expensive property market, have started cracking in the midst of the Covid-19 crisis as uncertainty looms over the economic fallout of the pandemic and rising job losses. After a long-drawn tug of war between developers who were resisting price reduction and homebuyers seeking affordability, the market has now turned in buyers' favour. While quoted brochure prices of apartments continue to be the same, rates have eased 8-12% in most micro markets of the city, brokers and consultants said.
Read More Investors turn to penny stocks to fight boredom… Several micro-cap stocks, which remained mostly dormant for over two years, have seen a sudden resurgence in activity since the beginning of April. The unexpected interest in these stocks has got little to do with their prospects, which in fact, have got bleaker amid the downturn. With people being confined to their houses during the nationwide lockdown, several of them are finding time to test their fortunes in the stock market. For many of them day trading is a way to escape boredom, while loss of jobs and salary cuts that may have prompted others to punt on the markets.
Read More | AND WHO'S |  |
Financials lose clout in Nifty… The stock market selloff has weakened the influence of banks and financials in Nifty. The financial sector, which has dominated the benchmark index for the last 12 years, has lost nearly 11% weight in the index since the beginning of the year to 31.13% currently. Telecom has more than doubled its weight to 3.44% since December 2018 bottom of 1.5%. The surge in oil-to-telecom major RIL has also been because of the developments in the telecom business. The auto sector, which had a weight of 11.8% in December 2016, is currently at its lowest in a decade at 5.54%.
Read More Few stocks driving up indices… Since they touched their multi-year lows on March 23, Sensex and Nifty have both rallied about 34%. Sensex has gained 8,750 points, or 33.7 per cent, while Nifty has rallied 2,634 points or 34.6 per cent as of Friday's close. However, the rally in the indices has been riding on just a handful of stocks. Half of Sensex's gain has come on the back of just three stocks -- RIL, HDFC Bank and Infosys, while for Nifty, five stocks, HDFC and ICICI Bank, along with the three mentioned earlier, have contributed 52% of its gain. Market players are not comfortable with such a concentrated rally.
Read More Red-flagged accounts leave banks in soup… Banks are in a major dilemma over a directive from RBI that lenders should decide whether loan accounts that had been 'red-flagged' as suspicious over six months ago are fraudulent or not. If banks do not classify these loans as a fraud, they risk being pulled up for being lenient. If they do, they must set aside provisions for 100% of the loan amount within a year, even if a large part of the loan is recoverable. Also, the fraud tag makes it difficult to sell an otherwise sound business.
Read More J&L pulls whitening products… Johnson & Johnson has initiated a complete recall of all its fairness products. Distributors in India received a mail from J&J on the recall, which has come just days after J&J said it is exiting the face whitening portfolio in Asia and Middle East. The US company's decision had come in the wake of continuing anti-racism protests and activism, triggered by police killing of an African-American, George Floyd.
Read More Meanwhile... Bid to replace Chinese imports… India is looking to plug loopholes as it seeks to reduce import dependence on China. Prime Minister Narendra Modi on Saturday met ministers and top officials from infrastructure and commerce ministries to discuss ways to boost local manufacturing and exports amid continuing tensions with China. The routing of Chinese goods to India through their common trade partners, inversion in duty structures and the exploitation of ambiguities in origin rules have all come under the government's scanner. The exercise is to check if these agreements are leading to preferential rates being lower on finished products than the intermediate or raw material.
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