Sensex ends a tad above 34,000, down 407 pts, Nifty falls 1%; banks drag

All That happened in markets today.

8:55 AM

MARKET COMMENT: G Chokkalingam, founder and managing director, Equinomics Research

 

It is surprising that the global markets have suddenly discovered that the rising inflation and interest rates, which are the main causes behind this massive fall. This is unbelievable!

 

The US Fed has also already indicated directly several times about the action plan for revising the benchmark interest rates in 2 or 3 phases in 2018.  Thus, this fall has to do largely with the profit booking across the world. In 2017, the global equity market-cap went up by over $9 trillion in 2017, which is roughly equal to about 4-times the Indian equity market’s overall size. Surprisingly, during January 2018 alone, the incremental market cap of global equities was $2 trillion.

 

As we mentioned earlier, the global economic cues remain quite strong. The beauty of economics is the forces behind the equilibrium. Now crash in the equities is associated with severe correction in the oil prices, which are down by 9% within a couple of weeks. Going ahead this trend, would help in moderating global inflation to some extent

8:43 AM

262 companies are scheduled to report Q3 results today

 

As many as 262 companies are likely to report Q3 numbers today including Alkem Laboratories, Apex Frozen, Avanti Feeds, Bank of Baroda, Bata India, BPCL, GSFC, HPCL, India Cements, Kitex Garments, M&M, Marico, Max Financial Services, Mahanagar Gas, MOIL, NALCO, Oil India, State Bank of India, SJVN, Sobha Ltd, Sun TV, Suzlon Energy, Syndicate Bank, Tata Steel, UCO Bank etc. among others.

8:40 AM

Chris Wood of CLSA on Indian equties, Union Budget

 

One reason GREED & fear reduced the Indian overweight in the Asia Pacific ex-Japan relative-return portfolio by 2ppts last week was the unfortunate decision in the Indian budget to introduce a 10% long-term capital gains tax.

 

This is a negative development since the equity culture has been promoted in recent years by salaried workers signing up to equity-linked tax-savings schemes. This, as well as demonetisation, have been the main reasons why equity mutual fund flows soared last year. The risk is now, clearly, that inflows into equity mutual funds slow for more than just one month.

 

The sell-off of late in India has so far been most intense in the mid-cap sector. The positive here is that the legitimate concerns about overvaluation in the mid-cap sector have now been somewhat corrected.

8:39 AM

Chris Wood of CLSA on global market sell-off

 

The Asean stock markets were less impacted by the recent sell-off with Thailand, Malaysia, Indonesia and the Philippines falling the least of all the Asian markets covered by CLSA. This is a reminder that these markets have now become relatively low beta. This is because these stock markets are now dominated much more by domestic institutional investors

8:37 AM

MARKET COMMENT: Ajay Bodke, CEO & Chief Portfolio Manager (PMS), Prabhudas Lilladher

 

US 10-year bond yields have touched 4-year high of 2.85% and are likely to breach psychologically important level of 3%. This has led to a sharp plunge in DJIA. And this is happening when the US FED hasn't even started unwinding meaningfully it's bloated balance sheet.

 

Trump's $1 trillion infra build-up plan would add to worries about US fiscal deficit putting additional pressure on bond yields. Lastly, record-low jobless rate and high capacity utilisation  (or low slack) in the US economy has sparked worries about wages-led inflationary pressures forcing FED to slam the brakes by rapidly increasing interest rates. 

 

Whispers of  leveraged ETFs  (triple or double leveraged) and ETNs lurking in the wings to trigger massive volatility and play a role akin to that played by  leveraged mortgage backed securities (MBS) and other complex derivatives before Lehman crisis has started doing the rounds. As an equity investor, I think it's time to be extremely vigilant 

8:36 AM

Fiscal stimulus means rate hikes important: Fed President Esther George

 

The economic boost from a major tax overhaul signed into law by President Donald Trump is keeping pressure on the Federal Reserve to raise interest rates, Kansas City Fed President Esther George said on Thursday.

 

“Because of that, it is important that the [Fed] continues on its current path of policy normalization with gradual increases in the target federal funds rate,” George said, adding that it would be “reasonable” for the Fed to raise interest rates three times in 2018.

8:28 AM

Gold hits 4-week low on firmer dollar

 

Gold prices dropped for a third straight session on Thursday and hit a fresh four-week low, as investors liquidated their long positions on a firmer dollar, while expectations of more US rate hikes this year also weighed on the market.

8:22 AM

SGX Nifty

 

The SGX Nifty is trading at 10,342, down 219 points.

8:15 AM

Oil falls for sixth day as supply fears mount

 

Oil prices fell for a sixth day on Friday after Iran announced plans to boost production and US crude output hit record highs, adding to concerns about a sharp rise in global supplies.

 

The falls come amid a rout in global share markets as inflation fears grip investors.

 

Brent futures were down 38 cents or 0.6%, at $64.43 a barrel. On Thursday, Brent fell 1.1% to its lowest close since Dec. 20.

8:12 AM

Wall St plummets: Dow slides 1033 pts, S&P drops by 100 amid selloff

 

The US stocks plunged around 4 percent on Thursday in another dramatic session, confirming a correction that has thrown the market's nearly nine-year bull run off course.

 

The bottom of this recent slide remained elusive for investors, who have been whipsawed this week by huge swings that have shaken a market that had only climbed steadily for months READ MORE HERE

8:11 AM

World's richest, including Buffett, Bezos lose $114 bn in US market rout

 

A plunge in US stocks Monday cut the fortunes of the world’s 500 richest people by $114 billion as the optimism over tax cuts that fueled January’s gains gave way to worries about inflation READ MORE HERE

8:09 AM

Why are markets falling?

 

Higher yields are seen hurting equities as they increase borrowing costs for companies and reduce their risk appetite. They also present a fresh alternative to investors, who may choose to allocate some of their money from equities to bonds

8:08 AM

Global phenomenon

 

Looks like today will be another day of market mayhem!

 

Asian stocks tumbled on Friday after Wall Street shares suffered yet another big slide amid worries over rising bond yields, while perceived havens such as the yen and Swiss franc drew demand amid the turmoil. Japan's Nikkei slipped 3%, en route for a weekly loss of 8.6 percent. MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.8%.

 

US markets remained the epicentre of the global sell-off, with the Dow plunging 4.1% and the S&P 500 sinking 3.7% overnight.

8:06 AM

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