Analysts and economists are talking of an imminent loss of clout for the US dollar more often now. Such forecasts are being fuelled by worries that China may 'weaponise' its over $1 trillion hoard of US Treasuries and use it as a financial leverage against Washington. America's own macro issues like very low domestic savings rate, a chronic current account deficit and its steady decoupling from the rest of the world are also adding to the woes. One analyst points out something "that has not never happened in history": a stunning 2.8 million ounce of gold was marked for delivery in May contract equating 88 tonnes worth $4-5 billion. "Somebody is really taking a big call that the US dollar will be devalued significantly," says he.
MARKET CUES: Where do we stand >>>  | Nifty futures on Singapore Exchange traded 33 points lower at 7 am (IST) signalling a weak start ahead for Dalal Street |
| On Friday, Nifty50 formed indecisive candles on daily and weekly charts, suggesting that it continued to struggle at higher levels. Analysts said the 10,550 level will be a key hurdle to watch out for this week. |
| Asian stocks pared declines on signs that China's economy was recovering against the ongoing spread of the coronavirus. Stocks were down in Japan and Australia though off session lows. Shares fluctuated in Hong Kong and dipped in China, where markets reopened after a two-day holiday. South Korean shares slipped. |
| US equity futures reversed early losses to trade modestly higher this morning. Wall Street indices took a tumble on Friday amid rising worries about the economic outlook. The Dow tanked 730 points, or 2.8%, while Nasdaq lost 2.6% and the S&P500 2.4%. |
| The rupee pared initial gains and settled flat at 75.65 against the US dollar on Friday as concerns about rising Covid-19 cases weighed on investor sentiment. |
| The US dollar rose against a basket of currencies. It was a shade higher on the yen, while the euro found solid support around $1.1167. |
| Oil prices fell for the second straight session on Monday as coronavirus cases rose in the US and other places, leading countries to resume partial lockdowns. Brent dropped 66 cents, or 1.6%, to $40.36 a barrel while WTI crude fell 63 cents to $37.86 |
| Gold prices rose to Rs 48,410 per 10 gm and silver to Rs 48,110 a kg on intermittent demand from institutional investors and safe haven buying from retail consumers, especially in the US. In international markets, the yellow metal held near its highest since early 2012 at $1,771 an ounce on Monday morning. |
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LIC invests big in equity, debt… LIC of India, the country's biggest money manager, has invested about Rs 64,000 crore in debt and equities until mid-June, only marginally lower than the first quarter of FY20, helping insulate the bond and stock markets from the Covid-induced disruptions reverberating through the real economy. While three-fourths of these investments are into long-term central and state government bonds, the rest is in the equity markets, a senior official with direct knowledge of the matter told ET.
Read More RBI weighs extending 90-day limit on NPA… The RBI board on Friday discussed the need for extending the NPA recognition date beyond 90 days, citing widespread distress in the corporate sector. The issue was flagged by Sachin Chaturvedi, director general at policy thinktank RIS, with Teamlease chairman Manish Sabharwal and Tata Sons chairman N Chandrasekaran also joining in. The discussions, which were not part of the official agenda, came a day after Finance Minister Nirmala Sitharaman publicly stated that the government and the regulator were in talks to allow a one-time loan recast for businesses that were viable in the pre-Covid period, but are struggling under the weight of the pandemic.
Read More New RBI debt paper promises good deal… Savers in lower tax brackets are set to benefit from a new set of sovereign debt papers being offered from next month, with the central bank selling the floating-rate securities linked to NSCs for the first time to individuals and Hindu undivided families (HUFs). These papers are being offered after RBI last month discontinued the offer of 7.75 per cent government bonds. People with up to Rs 10 lakh annual income can earn 6.08-7.15% after tax deductions, while the same will be in the 5.36-6.08% range for those earning Rs 10-15 lakh a year. Above that income, it will be 4.79 per cent.
Read More Bharat ahead of India in consumption… Consumption growth in rural India is outpacing the rate of expansion in cities and has already reached 85% of pre-Covid average sales underpinned by higher farm income, minimal retail disruption during the lockdown and migrant workers returning home. In comparison, urban market sales were relatively lower at 70% in May, according to Nielsen's latest data. In the next nine months, the overall FMCG segment is expected to grow at around 5% but rural market will expand at double the rate of urban.
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Nifty faces slump ahead… Nifty could face selling pressure this week, as option sellers sold higher number of calls relative to puts as of Friday, weekly options data show. This coupled with FIIs turning net short in index futures underscores the anticipated near-term pressure on the index. The open interest Put-Call ratio for Nifty options expiring on July 2 ended at 0.89 on Friday, down from 0.95 a day earlier. The selling of a relatively higher number of Calls than Puts signifies that Call writers either don't expect the market to rise or expect it to correct and thereby retain the premium paid by Call buyers.
Read More Worst June Quarter for Motown… Indian automakers could report the worst demand decline in almost three decades in the three months to June, with wholesale dispatches and retail sales of passenger vehicles for the quarter contracting drastically. The industry could see 25-45% overall decline in Q1, with heavy commercial vehicles expected to see a 50% degrowth, touching the sales levels of 2008. Industry estimates show PV wholesale figures may shrink to 1.5 lakh units from 8.73 lakh. Retail sales could fall to 2.5 lakh units from last year's 7.94 lakh.
Read More Startup deals down 31%... Dealmaking for startups in the first six months of 2020 dipped 31% to 272 transactions, while the total capital invested fell by 11% to $4.1 billion compared to the year-ago period, according to data from Venture Intelligence. Venture capital investors feel that given the double whammy of Covid-19 and blocking of investments from China, things will get worse in the next two quarters, as there is usually a lag between when deals are closed and their announcements.
Read More Mall, restaurant footfalls very low… Malls and restaurants are seeing extremely low footfalls since reopening earlier this month. Restaurants are particularly struggling, given early closure timings and the ban on serving alcohol. While most retailers have opened their stores in malls, shopping complexes have at best seen 15-20% of footfalls compared to pre-Covid times and mall owners do not expect the situation to improve before the festive season. DLF's malls in NCR have footfalls of just 6,000 per day, compared to 30,000 in normal times, its executive director Pushpa Bector, said.
Read More Meanwhile... India intensifies checks on Chinese goods… India is looking to increase the scrutiny of imports from Chinese companies or entities located in Asean countries, said people with knowledge of the matter. New Delhi has information about China setting up new entities or acquiring defunct companies in countries such as Vietnam and using these shell enterprises to re-label and export goods to India, exploiting India's FTA with Asean.
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