Soaring Nifty premium indicates euphoria in the market

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

>> Industry honchos rush to settle insider trading cases
>> High OI shows banks, pharma in favour
>> Nifty futures signalling toppish market
AND
>> Sebi says 63 Moons Tech not fit & proper to provide market softwares

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

> Nifty futures on the Singapore Exchange traded 34 points higher at 7 am (IST), in signs that Dalal Street was headed for a positive start

ELSEWHERE
>> Stocks traded mixed this morning as investors took stock of the recent strength in global equities and awaited key data from the US labor market later. Stocks gained in South Korea and retreated in Japan and China. Hang Seng added 0.3%.

>> US shares spent most of the overnight session at a record high. Wall Street stocks were mixed, with the Nasdaq closing at a record high. The Dow rose 0.29%. S&P500 fell after a report that Pfizer slashed the target for Covid vaccine rollout.

IN CURRENCIES
>> The rupee slipped for the second straight day to end 12 paise lower at 73.93 against the US dollar on Thursday as investors remained cautious ahead of the RBI policy meet outcome.

>> The dollar steadied after further overnight declines. The euro was headed for its best week in a month holding above the $1.21 level for the first time since spring 2018. The Australian dollar struck a 28-month high

IN OIL MARKET
>> Crude oil edged higher as Opec+ reached an agreement to ease its oil-output cuts next year more gradually than previously planned. Brent rose 19 cents, or 0.4%, to $48.89 a barrel while WTI cride gained 18 cents to $45.82

IN BULLION
>> Gold and silver prices dropped in Indian markets amid weak global cues. On MCX, February gold futures slipped 0.24% to Rs 48,449 per 10 gm while silver dropped 1% to Rs 62,559 a kg. In international markets, gold held at $1,838.79 per ounce.

All in all, the trade setup on Dalal Street signalled a positive start ahead. On Thursday, Nifty formed ‘Bearish Belt Hold’ pattern, which suggested that the bears were having an upper hand.

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

... The rise in active Nifty futures premium to an eight-month high of 68.85 on a closing basis against the spot Nifty shows the extent of bullish sentiment in the market, but should ironically strike a cautionary note among retail investors, analysts believe. This is because markets tend to correct after euphoria sets in. Market mavens said a pullback of 400-600 points after the stellar 1,577 point rally from the low of 11,557 on November 2 to the December 3 close of 13,133.9 would offer an opportunity for those who missed the last leg of the current rally.

.... Cold chains and integrated logistics -- theoritically the frontline warriors in the planet’s second-biggest vaccination exercise -- are drawing as much investor attention as that from the state and its medical fraternity as the countdown starts on mass immunisation in India. Analysts are now busy recommending the winners from this space. Blue Star, Voltas, Snowman, Blue Dart, Allcargo, and SpiceJet are among the companies that will be as crucial to public health in the immediate future as will be the vaccine makers and care centres.

... Top officials of listed companies facing the glare of the Sebi for alleged insider trading violations are getting a reprieve thanks to the regulator’s new settlement scheme. In the last few months, Sebi has settled at least half-a-dozen insider trading cases through the consent route, through which an accused can settle any ongoing case with Sebi by paying up without accepting or denying guilt. Some senior employees of companies such as Diageo, Titan, Divi’s Laboratories, NIIT and JM Financial have settled their insider trading cases via this mechanism, data showed.

... Banking, steel, chemical and pharma companies are garnering high interest in the December futures segment as traders look for select opportunities in the broader market after the over 75% rally in benchmark indices since March. PSU banks seem to be particularly in favour because of their cheaper valuations.

... Sebi on Thursday said 63 Moons Technologies, promoted by the NSEL scam-accused Jignesh Shah, is not ‘fit and proper’ to provide software services to market intermediaries. Brokers, custodians and fund houses using its services have been given three months to make alternative arrangements. 63 Moons Technologies provides STP software solutions and ODIN trading software across the securities markets.

LASTLY, AN UPDATE ON ALL THE STOCKS BUZZING THIS MORNING

>> Aditya Birla Group’s flagship building materials company UltraTech Cement said it would spend Rs 5,477 crore on a mix of greenfield and brownfield capacity expansions totalling 12.8 million tonnes, heralding the start of a capex cycle for the private sector.

>> The insolvency court has given its nod to Reliance Infratel’s resolution plan, paving way for Reliance Jio Infocomm (Jio) to pick up the tower and fibre assets of this bankrupt company after an over 20-month-long insolvency process.

>> RBI has asked HDFC Bank to halt launches of digital banking products and onboarding customers for the credit card business following repeated glitches on its technology platform over the last three years.

>> JSW Steel has sweetened its offer to lenders of Bhushan Power & Steel, agreeing to make an upfront payment of Rs 19,350 crore plus an additional Rs 400 crore, thus taking the deal size to Rs 19,750 crore

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