Little impact of new margin rule on trading volumes

Hi there! Welcome to ETMarkets Morning, the show about money, business and markets. I am Nandini Sanyal, and here is what we have to start your day.

>> Avanti Feeds top gainer of last 10 years
>> Margin rule impact on market volumes miniscule
>> Pharma, IT funds on top for 2020
AND
>> PSU banks suddenly ahead in deposit growth

And there is more. But first, a quick glance at the state of the markets..

· Nifty futures on the Singapore Exchange traded 12.25 points down at 7:40 am (IST), signalling possible weakness ahead on Dalal Street.

ELSEWHERE

· Stocks in select markets drifted lower amid curtailed trading in Asian markets on the last day of 2020. Markets in Japan and South Korea are shut. New Zealand shares dropped.

· US stocks climbed, with small-cap shares outperforming amid light volumes. Dow rose 73.89 points, or 0.24%; the S&P500 gained 5 points, or 0.13%, and the Nasdaq 19.78 points, or 0.15%.

IN CURRENCIES

· Rising for the fifth straight session, the rupee appreciated by 11 paise to close at 73.31 against the US dollar on Wednesday, supported by positive domestic equities and unabated foreign fund inflows.

· The dollar continued its slide, weakening to the lowest in two-and-a-half years. A listless dollar helped the euro stand firm at a 32-month high. Sterling was steady at a level last seen in May 2018. The Australian dollar and New Zealand dollar also held their ground

IN OIL MARKET

. Oil prices slipped on the last day of Calendar 2020. Brent traded 18 cents, or 0.4%, lower at $51.45 a barrel, while WTI crude lost 0.1%, or 5 cents, to $48.35.

AND IN BULLION

· Gold futures fell by 0.13 per cent to Rs 49,976 per 10 gm on Wednesday as participants offloaded holdings on low spot demand. On MCX, gold prices for February delivery declined by Rs 63, or 0.13 per cent, to Rs 49,976 per 10 gm. Silver gained Rs 205 to Rs 67,673 per kg. In international markets, gold fell 0.04 per cent to $1,882.20 an ounce

All in all, the trade setup on Dalal Street looked set for some consolidation. On Wednesday, Nifty50 climbed for the sixth straight session but showed structural weakness, though technical charts are yet to generate a ‘sell’ signal

LET ME NOW GIVE YOU A HEADS-UP on some of the top news we are tracking at this hour.

... Shrimp feed company Avanti Feeds emerged at the top of the ET500 pack among stocks that made investors rich despite the topsy-turvy market movements. Caplin Point Laboratories, which started as an SME, ranked second following its focus on the less explored, less stable and less regulated markets in Africa and Latin America. Third on the list is Vaibhav Global that sells fashion jewellery in the US and the UK on TV shopping channels. It is followed by Alkyl Amines Chemicals, which supplies amines and its derivatives to paints, chemicals, agriculture and pharma sectors. Bajaj Finance is fifth. RIL, TCS, HDFC Bank, HUL and Kotak Mahindra Bank were the top five in terms of absolute gains in market-cap, in that order.

... The new margin rule introduced by the market regulator from December 1 has had little impact on trading volumes on both cash and derivatives segments this month, contrary to concerns that it could hurt trading activity. Average daily volume in derivatives segment in December was at a record high of Rs 32.15 lakh crore. In the cash segment, it was just 3% lower than in November at Rs 68,000 crore a day. The volumes show liquidity is not a major issue for the Indian retail investor.

... Mutual fund schemes investing in pharma and healthcare, technology and international stocks were the top performers in 2020 — a year that tested investors’ nerves with the stock market swinging from extreme pessimism to record highs within nine months. Data from ETIG showed as many as 18 funds from these categories returned more than 50% during the year with five of them giving over 70%. The Nifty has gained almost 15% so far this year.

... The finance ministry has accepted the labour ministry’s proposal for crediting 8.5% interest on provident fund deposits for 2019-20, a move that will benefit nearly 60 million subscribers of the Employees Provident Fund Organisation (EPFO). A senior government official told ET that the interest rate will soon be notified by the labour ministry. EPFO’s Central Board of Trustees, the apex decision-making body under the labour minister, had in March this year approved 8.5% interest rate on EPF for 2019-20.

... Deposits for public sector banks grew at a higher pace than usual despite their lower deposit rates and amid stress on a few private banks. Term deposit growth of public sector banks quadrupled but it decelerated sharply for private banks, RBI said. For the banking sector as a whole, term deposits – contributing almost 60% of total deposits – moderated, reflecting the easing of interest rates and the lure of returns on competing asset classes.

LASTLY, AN UPDATE ON ALL THE STOCKS BUZZING THIS MORNING

· IDBI Bank has entered the final lap of selling its 23% stake in IDBI Federal Life Insurance Co to Belgium’s Ageas Insurance International. The deal is expected to be completed on Thursday

· Debt-ridden telecom firm Reliance Communications on Wednesday said the group owes around Rs 26,000 crore to Indian banks and financial institutions

· Drug firm Zydus Cadila said it has received approval from the Drug Controller General of India for Saroglitazar Mg, used for the treatment of non-alcoholic fatty liver disease, in the country.

· Adani Green Energy’s subsidiary has commissioned a solar power project at Khirsara in Gujarat of capacity 100 megawatts, taking the company’s total operational renewable capacity to 2,950 mw.

· BHEL on Wednesday said it has won an order from the Nuclear Power Corporation of India.

That’s it for now. For all the market news through the day, do track ETMarkets.com. Have a great day ahead! Bye-bye