The global liquidity glut has already done the unexpected to asset classes, especially global equities. One niggling fear is that the excess money will also cause inflation to come back with a bang, if not this year then definitely in the following years. Should that happen, it be a big worry for equities. But Motilal Oswal offers a contrarian thesis. It says while broad money supply growth has picked up in all major economies as higher personal savings boosted bank deposits, the fact is, loans-to-deposit ratios remain an all-time lows in all nations, including the US. This signals only be a gradual normalisation in consumer spending, and thus, in deposits. And without commensurate loan growth, inflation will remain at bay.
MARKET CUES: Where do we stand >>>  | Nifty futures on Singapore Exchange traded 54 points higher at 7 am (IST) signalling a likely positive start for Dalal Street |
| On Wednesday, Nifty formed a bearish candle on the daily chart. Analysts largely see support for Nifty in the 10,620-650 range and the immediate hurdle at 10,750 level. |
| Stocks across Asia were mostly higher on Thursday as investors continued to place faith in policy support. Shares in Hong Kong, Sydney and Seoul were higher. Chinese equities opened little changed, while Japan saw small losses. |
| Futures on the S&P 500 Index were flat after the gauge climbed to a one-month high on Wednesday as advances in high-flying megacaps like Apple and Amazon sent Nasdaq to a record. Dow gained 0.7% or nearly 200 points, while the S&P500 rose 0.8% and the Nasdaq 1.4%. |
| The rupee depreciated 9 paise to settle at 75.02 against the US dollar on Wednesday tracking volatile domestic equities, rising crude oil prices and a strengthening US currency. |
| The dollar edged up. The yen was little changed. The euro was up 0.1% against the greenback and the offshore yuan rose above 7 per dollar to the highest since mid-March |
| Oil prices barely moved in early trade on Thursday. WTI crude futures were unchanged at $40.90 a barrel, after rising 0.7% on Wednesday. Brent futures inched up 3 cents to $43.32. |
| Gold prices jumped to Rs 48,700 from Rs 48,450 per 10 gm, while silver climbed to Rs 50,020 per kg. On MCX, August gold futures rose 0.74 per cent to Rs 49,159 while silver July futures rose to Rs 51,382. In international markets, gold held above $1,800 per ounce. |
| LOOK WHO'S |  |
Retail on a high in Indian equities… Retail participation in Indian equities has surged to a 15-year high in July as investors shifted from unattractive bank and corporate fixed deposits to take advantage of the market's sharp recovery from the March lows. After hitting a 10-year high of 68% in June, retail participation has risen to 72% of the total cash market turnover so far in July. These levels were last seen in 2005, the mid-point of the 2003-07 bull market.
Read More TVS Group plans shareholding recast… The $8 billion TVS group, among the largest auto parts makers in the country, may be close to a family settlement in the shareholding structure of the holding company TV Sundram Iyengar & Sons, as discussions within the members to simplify the interlocking ownership patterns have been finalised. While there is no dispute within the family and the settlement is completely amicable, the idea is to hammer out a structure that will prevent potential future disputes among the next generation regarding management and ownership of group companies.
Read More HNIs regain confidence in NBFCs… Wealthy investors and family offices appear to have regained confidence in NBFCs, which were finding it tough to raise money last year. Sales of market-linked debentures — securities where payouts are determined at the time of maturity — have gone up to pre-pandemic levels with the likes of Edelweiss, Anand Rathi, Centrum, and Mahindra Finance raising more than Rs 2,000 core in the April-June quarter from yield-hungry investors.
Read More MFI, NBFC collections pick up fast… Collection efficiency for most non-bank lenders, small finance banks and microfinance institutions (MFIs) has improved in June to 50-60% of the levels seen before the lockdown, from as low as 20% in April. Collections were the highest in asset-backed securities and non-MFI loans at nearly 70%, followed by mortgage-backed loans at 60% and small-ticket borrowing at about 50%. Magma Housing Finance said it witnessed strong resurgence in June collections, which more than doubled from May.
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India Inc set to post worst Q1 sales… India Inc's biggest companies are set to post their worst sales performance in nine quarters in April-June 2020, but profit fall will be cushioned by a better-than-expected show by banks and consumer firms. An analysis of the Nifty50 companies showed aggregate revenue for the sample will fall 23.2% year-onyear. Net profit is expected to drop only 6.9% with about two-thirds of the companies expected to report a fall.
Read More PSU insurers' merger plan shelved… The government has called off the merger of the three public sector non-life insurers — National Insurance, Oriental Insurance and United India Insurance — and has announced an additional capital infusion of Rs 9,950 crore. The Union Cabinet on Wednesday approved a Rs 12,450-crore equity infusion into the non-life companies, which includes the Rs 2,500 crore already invested in FY20.
Read More Big Covid hit on health insurers… India's health insurance sector is feeling the financial brunt of the coronavirus pandemic, with claimed amounts more than tripling to Rs 562 crore in less than a month, led by Maharashtra and Delhi. The number of claims also tripled to 35,000 on July 3 from about 11,000 reported on June 8, according to data from the General Insurance Council.
Read More Top varsities oppose US fiat on students… MIT and Harvard University have filed a joint lawsuit against the US government's decision to deport foreign students if they do not attend in-person courses despite the raging Covid pandemic. In a plea before a Massachusetts court seeking declaratory and injunctive relief, MIT and Harvard said the Immigration and Customs Enforcement announcement would disrupt international students' life and jeopardised their academic pursuits. They said for many students, returning home at this point could be "impossible, impracticable, expensive and dangerous."
Read More Meanwhile... E-com to display country of origin… The government has asked ecommerce platforms such as Amazon and Flipkart to display the country of origin on new products listed by sellers on their sites by August 1 and legacy items by October 1 without stipulating a deadline. The companies sought more time to implement the changes, which are part of the government's plan to curb imports, at an online meeting with officials on Wednesday.
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