The MSP hike and government transfer/benefits may have somewhat compensated the estimated Rs 1.3 lakh crore loss in rural cash flows, but that may not be enough to drive rural consumption, as economic uncertainty and deferred wedding season have delayed revival of rural discretionary consumption. Brokerage JM Financial estimates that rural consumption for now would be focused on agri-investments essentials and personal mobility. It will most likely pick up after only the Oct-Nov kharif harvest.
MARKET CUES: Where do we stand >>>  | Nifty futures on Singapore Exchange traded 23 points lower at 7 am (IST) signalling a weak start ahead on Dalal Street |
| On Tuesday, Nifty50 formed a bullish candle on the daily chart, negating Monday's indecisive Doji candle. Analysts said the negation of such a pattern (Doji) normally results in a sharp movement in the opposite direction |
| Asian stocks mostly edged higher on Wednesday. Shares in Hong Kong opened modestly higher, while Japan's Topix was flat along with stocks in Shanghai. Korean equities outperformed. |
| US equity indices closed higher on Tuesday, with the Nasdaq booking another record close, helped by improving economic data and optimism about the ability of the US to respond to rising Covid-19 cases. Dow rose 131 points, or 0.5%, the S&P 500 gained 13.43 points, or 0.4%, and the Nasdaq 74.89 points, or 0.7% |
| The rupee appreciated 37 paise to close at 75.66 against the US dollar on Tuesday, following a rally in domestic equity market and persistent foreign fund inflows. |
| The dollar headed for a third straight day of declines. The euro jumped to one-week high following positive economic data, while the Australian dollar and other higher-risk currencies strengthened after US officials confirmed that the trade deal with China remained intact. |
| Oil futures edged lower on Wednesday after US crude stockpiles grew more than expected. Brent crude fell 2 cents to $42.61 a barrel, while WTI crude futures slipped 4 cents, or 0.1%, to $40.33 |
| Gold prices surged to their highest since October 2012 on Tuesday, driven by a weakness in the U.S. dollar and widespread monetary stimulus globally. Spot gold climbed 0.7% to $1,767 per ounce, having hit $1,768.96, its highest since October 2012. Back home, gold and silver saw profit booking |
| LOOK WHO'S |  |
Govt sees green shoots of revival… The government heralded the "early green shoots of economic revival" in May and June, pointing to higher electricity and fuel consumption, greater movement of goods and an increase in financial transactions. The Finance Ministry listed as many as 14 separate indicators across manufacturing, services, finance and agriculture to back this up in a statement entitled 'Increase in Economic Activity-Improvement in Economic Indicators' issued on Tuesday, which saw BSE Sensex breach the 35,000 mark for the first time since March 11, closing at 35,430, up 1.5%.
Read More Poonawalla, Ambani ride market revival… Billionaires have been quick to recoup losses in the aftermath of the Covid-19 crisis. Of the four Indian billionaires who are among the world's top 100, Mukesh Ambani saw a V-shaped recovery in his wealth, losing 19% in the initial weeks and regaining 18% in dollar terms. Vaccine king Cyrus Poonawalla was one of the fastest gainers in the world with his net worth rising 25% to $15 billion, making it into the top 100. The Gautam Adani family and Shiv Nadar of HCL, the remaining two in the top 100, saw their wealth decline by 18% and 6%, respectively.
Read More Top MFIs buck trend to ride rally… Listed microfinance companies including CreditAccess Grameen, Satin Creditcare Network and Spandana Sphoorty Financial are back on investors' radar after clocking 26-95% gains in one month. This was despite pressure on the NBFCs due to liquidity issues and worries over deterioration in asset quality. But some are bucking the trend. Healthy capital base, early provisioning for pandemic losses, strong customer network, and attractive valuations based on forward multiples are key factors supporting their stock performance.
Read More Credit card spends normalise… India's dominant lenders in the consumer finance space have seen credit card spends normalise and inch closer to pre-Covid levels after a fall of almost 70-80% in April. Top lenders such as HDFC Bank, Axis Bank and RBL Bank are seeing the return of consumer spends to almost 80% of the prelockdown levels in June. The largest credit card player, HDFC Bank, is likely to clock nearly 80% of its average monthly credit card spend at the end of June. The bank sees monthly credit card spends in the range of Rs 15,000-20,000 crore.
Read More NBFC bond sales double in Q1... Bond sales by NBFCs have nearly doubled in the first quarter of FY21, indicating a revival of investor confidence in suppliers of crucial credit to last-mile users despite the protracted lockdown. These financiers together raised Rs 89,433 crore, compared with Rs 49,625 crore garnered last year in June quarter. The tally may rise further as the quarter is yet to end. Double-A rated companies, considered less resilient than those with a higher rating, raised Rs 8,508 crore — more than four times of FY20.
Read More | AND WHO'S |  |
MFs hit barrier on RIL…Fund managers at domestic mutual funds are facing a tricky situation these days that could affect their performance. They are unable to buy more shares of RIL — one of the top performers on Dalal Street in the past three months — in equity schemes on account of the mandatory limits on holding a particular stock. Sebi guidelines do not allow actively managed diversified equity schemes to own more than 10% in a single stock. After this limit is hit, the weight in a scheme can go up only to the extent of rise in share price.
Read More 100% customs check on Chinese imports… Indian customs could carry out 100% checks of Chinese import consignments at ports on the back of heightened security concerns following tensions at the border, people familiar with the development said. The move, possibly aimed at discouraging Chinese imports, could lead to delays in the release of consignments. However, the government played down the move with officials saying that no such instructions had been issued and containers may have been held up on the basis of risk assessment or intelligence input.
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India to take up visa ban with US… India will seek a separate discussion on the suspension of work visas, ordered by US President Donald Trump on Monday, independent of the trade negotiations between the two countries, top government officials told ET. The contentious order, widely criticised by global technology leaders, disallows grant of fresh visas until December 31, jeopardising the prospects of thousands of skilled workers worldwide with Indian engineers likely to be the most affected.
Read More Meanwhile... Road ministry may cancel Chinese bids… The ministry of road transport and highways is likely to cancel the bid submitted by a Chinese firm for execution of a stretch on the Delhi-Mumbai Expressway. Separately, two other bids submitted by Malaysian companies for highways projects being executed by the National Highways Authority of India are being reviewed, senior officials close to the matter said. Each of these three bids is about ₹500-₹600 crore.
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