Market Ahead, December 30: Top factors that could guide markets today

Shares on Wall Street pulled back from record highs overnight as uncertainty about whether the US Senate would authorize additional stimulus checks gave investors a reason to take profits. 

Modest gains in early trading brought stocks to an intraday record, but the advance evaporated after Republicans blocked an attempt by Democrats to increase direct payments to individuals to $2,000 from $600. The Dow Jones Industrial Average fell 0.22%, the S&P 500 lost 0.22% and the Nasdaq Composite dropped 0.38%.

Asian equities too retreated in early Wednesday trading tracking weakness in US equities. Australian shares lost 0.79% while Japan’s Nikkei share average lost 0.03%. South Korea’s Kospi index, however, gained 0.28%.

Meanwhile, news that the United States has detected its first-known case of a highly infectious coronavirus variant could give investors more reason to cash in gains.

Despite a weak start for most Asian markets, the SGX Nifty futures were trading 0.32% higher at 13,978 level around 7 am, indicating a positive start for benchmark indices back home.

That apart, India witnessed a slight rise in fresh Covid cases with 20,529 cases. Yesterday, India had reported six cases of new coronavirus variant. But the government on Tuesday said the existing vaccines for Covid-19 will protect against the new variants as there is no evidence to prove otherwise.

Now, a look at the stock-specific developments that are likely to sway the market today:

Banking and financial stocks could remain in focus today after the RBI in a report on Tuesday said that India’s financial sector should brace for challenging times ahead with an increased risk of deterioration in asset quality and lower demand for loans. NBFCs or shadow banks may see a hit on their profitability, the report said. 

Promoters of Vedanta have pledged their holding in the firm to raise $1.4 billion, mostly for repaying the debt that was coming up for maturity. In a stock exchange filing, Vedanta said its promoters raised $1 billion debt by issuing equivalent notes to Citicorp International Ltd. Separately, a unit of Vedanta Resources will issue $400 million in notes to an entity under Oaktree Capital Group.

The Boards of Jindal Stainless Limited (JSL) and Jindal Stainless (Hisar) Limited (JSHL) approved the merger of JSHL into JSL in a share swap ratio of 1:1.95.

Meanwhile, IIFL Securities' Rs 90-crore share buyback will open today.