Street Signs: Global cues to guide markets, Sebi's NSEL broker scheme

Global currents tug at India’s market rudder

 

The benchmark Nifty dropped 0.7 per cent last week after gaining 4.2 per cent the previous week. Investors remained uneasy as the House of Representatives narrowly approved US President Donald Trump’s tax Bill. Long-dated US bond yields climbed amid mounting US debt concerns, prompting foreign portfolio investors (FPIs) to sell heavily in India. Rising yields make US bonds more attractive, leading FPIs to take money off the table from emerging markets, including India. According to provisional exchange data, FPIs offloaded nearly ₹11,590 crore last week. With the earnings season winding down, global cues will have greater influence on markets this week. “The debt situation and its effect on risk appetite will shape market direction. It remains to be seen if this impact will be immediate or with a lag. Immediate support for the Nifty lies between 24,460 and 24,615, while resistance is at 25,060,” said Deepak Jasani, former head of retail research at HDFC Securities.

 

Strong IPO pulse, but GMPs don’t break a sweat

 

Despite volatility in secondary markets, investors embraced two recent initial public offerings (IPOs). Borana Weaves’ IPO was subscribed 148x, while Belrise Industries saw a 43x subscription. Yet, despite robust investor interest, the grey market premium (GMP) for IPOs launching this week remains modest. Both Scoda Tubes and The Leela Palaces, Hotels and Resorts carry a GMP about 5 per cent above their issue price; the GMP for Aegis Vopak Terminals is not yet known. Will the good showing in the IPO market last week be sustained? One has to wait and see. 

 

Sebi tosses lifebuoy to stranded NSEL brokers

 

Protracted, ongoing legal proceedings and an overhang in the National Spot Exchange case appear close to resolution. The Securities and Exchange Board of India (Sebi) is considering a settlement scheme for commodity brokers embroiled in the issue. The settlement scheme may “come through soon”, Sebi Chairman Tuhin Kanta Pandey observed on the sidelines of a recent event. The settlement could provide relief to around 300 brokers. The Securities Appellate Tribunal had previously recommended a settlement scheme in the matter. Last week, the company disclosed that over 92 per cent of traders had agreed to a one-time settlement totalling roughly ₹1,950 crore for outstanding claims.