Two global rating agencies S&P Global and Fitch already rate India at 'BBB-', the lowest investment grade to which Moody's has downgraded India's credit rating now, and which is what the government had been trying to avoid. Not that it matters much. FIIs have already exited Indian financial markets in a big way, and this will probably send out a little more money. India does not borrow overseas, so the rating makes no difference. Indian companies borrowing abroad will have problems, but they have cheap credit available at home. What it might do is make the government more cagey about loosening its purse strings to stimulate the economy.
MARKET CUES: Where do we stand >>>  | Nifty futures on the Singapore Exchange traded 8.75 points, or 0.09 per cent lower at 9,830.75 in signs that Dalal Street was headed for a muted start on Tuesday. |
| On Monday, Nifty came closer to overbought levels, as suggested by the 14-day RSI, which opened up the possibility of profit taking. Analysts said the index has formed a candle similar to a 'Shooting Star' on the daily chart, which may pave the way for profit booking. |
| While Nifty saw profit booking and trimmed some of the intraday gains from an intra-day high level of 9,931, it continued the sequence of higher highs and lows on both daily and weekly scales, which is a positive sign as per the 'Dow Theory'. |
| Elsewhere in Asia, stocks opened mixed Benchmarks in Tokyo outperformed, while gains were more muted in Seoul, and Sydney shares fluctuated. Hong Kong rose at the open. |
| US stocks futures slipped as investors assessed prospects for the deployment of the US military to quell social unrest. S&P500 contracts dipped after President Donald Trump promised to deploy large numbers of troops if cities and states don't act to contain violence from protests over police brutality. Overnight, Dow rose 91.91 points, or 0.36%; the S&P500 gained 11.42 points, or 0.38%, and the Nasdaq 62.18 points, or 0.66% |
| Oil prices crawled higher, with traders waiting to see whether major producers agree to extend their huge output cuts to shore up prices later this week. Brent crude futures rose 0.4%, or 17 cents, to $38.49 a barrel, while ETI futures traded in a 38-cent range on either side of Monday's close. |
| The rupee appreciated 8 paise to provisionally close at 75.54 against the US dollar on Monday supported by optimism over the government's reopening plan for the domestic economy. |
| The dollar was little changed after declining 0.7% on Monday.The yen traded little changed at 107.61 to the dollar, The offshore yuan was at 7.1245 per dollar and The euro was at $1.1130. |
| LOOK WHO'S |  |
Uday Kotak to offload 2.8% stake in bank…Billionaire banker Uday Kotak is selling up to 2.83% in Kotak Mahindra Bank through block deals on Tuesday for nearly Rs 7,000 crore to meet RBI's norm that stipulated 26% promoter shareholding in the bank. According to the term sheet, the deal is being offered at a price band of Rs 1,215 to Rs 1,240 per share. Currently, Kotak holds 28.93% in the private lender and has till August 17 this year to meet the regulatory deadline to pare his stake.
Read More Rs 20,000 cr bad loan up for sale… An estimated Rs 20,000 crore worth of bad loans from state-run banks are up for sale to asset reconstruction companies as banks prepare for a fire sale due to suspension of the bankruptcy law which has blurred the recovery horizon, said bankers familiar with the development. Many banks are looking to sell large exposures to Reliance Communications, Reliance Naval, Videocon Industries, and Amtek Auto that have been a drag for more than two years, they said asking not to be identified.
Read More Sebi to probe Templeton debt schemes…Sebi has hired the services of a chartered accountant and forensic audit firm to probe into the dealings of six mutual fund schemes that were shut down by Franklin Templeton, one of India's leading asset managers. The Mumbai-based Chokshi & Chokshi, which advises on tax, accounting, risk, and due diligence among other things, has been given the assignment. The firm is likely to probe if there were collusion between the fund house and bond-issuing corporates, instances of conflicts of interest of directors or senior officials, and transactions that were prejudicial to the interest of investors in the schemes.
Read More MSP hiked for summer crops… The Centre on Monday announced higher minimum support price of 14 summer-sown crops for 2020-21, increasing the support price of the most popular summer crop, paddy, from Rs 1,815 per quintal to Rs 1,868 per quintal. The hike is primarily tweaked in favour of coarse cereals and pulses in terms of percentage of return to farmers over their cost of production. The move is in sync with the central government's policy to encourage farmers to go for less water-consuming crops such as coarse cereals and also aimed at reducing import bills on oilseeds.
Read More | AND WHO'S |  |
Moody's downgrades India to lowest investment grade… Global ratings agency Moody's Investors Service on Monday downgraded India's sovereign rating to the lowest investment grade, saying the country's policymaking institutions would be challenged in enacting and implementing policies which mitigate the risks of a sustained period of low growth, significant further deterioration in government's fiscal position and stress in financial sector. The downgrade by Moody's comes 22 years after it lowered India's rating on June 19, 1998 in the aftermath of the country's nuclear tests. A finance ministry official downplayed the demotion, pointing out that "35 countries have been downgraded — this is their view".
Read More WhatsApp forwards can land you in trouble… Forwarding unverified market tips on WhatsApp could land you in trouble. Last Friday, Sebi imposed a fine of Rs 15 lakh each on two senior employees working at Antique Broking for their involvement in the WhatsApp leaks. Both the executives at Antique were part of several WhatsApp investor groups where insider tips were being exchanged. The tips largely dealt with probable earnings of various companies and other news developments. They used to forward these tips to their clients who were institutional investors. Some of the predictions turned out to be precise, which have now landed them in trouble.
Read More Factory output shrank sharply in May… India's manufacturing activity contracted sharply in May, marking the second consecutive month of steep fall after the record decline in April, as the nationwide lockdown imposed since March 25 dented demand, a private survey showed on Monday. Firms cut jobs at the quickest pace in over 15 years. The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) rose to 30.8 in May from 27.4 in April. A reading above 50 on the index indicates expansion.
Read More Auto sales slump to lowest in decades… Passenger vehicle sales slumped to their lowest in decades last month, as limited production amid disruptions in supplies, shortage of labour and a weak market on the back of the Covid-19 pandemic and the lockdown hit dispatches from factories. Industry estimates put wholesale numbers of passenger vehicles at 37,000 in the local market in May, an 85% fall from a year earlier. In April, production as well as dispatches had come to a complete halt.
Read More Meanwhile... Mumbai braces for first-ever cyclone... Mumbai could be in for a weather phenomenon that has never occurred in its documented history. A cyclone developing over the Arabian Sea—the second to be forming near India in a fortnight — is expected to make landfall just 110km north of Mumbai on Wednesday evening, likely triggering flash floods all along the state's coast, including in the metropolitan region. Winds owing to the cyclone, Nisarga, could reach 115kmph, with gales of up to 125kmph. The IMD on Monday issued a red alert for Wednesday, indicating extremely heavy rain at isolated places in Mumbai, Thane, Palghar and Raigad owing to Nisarga.
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