Sticky FPIs are raising their India bets

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

>> Sticky FPIs are raising their India bets
>> IT stocks may continue their march
>> Indigo's IPO plan lifts paint stocks
AND
>> RBI says banks' non-performing assets may double in a year

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

The Singapore Exchange Nifty futures were flat at 8:15 am (IST), signalling a muted trade setup for the day.

ELSEWHERE
Asian equities were mixed on Tuesday after US stocks fell for the first time in five sessions with prices near all-time highs. Shares rose in China, dipped in South Korea and were steady in Hong Kong and Japan. Australian stocks were modestly higher.

Wall Street’s main indices closed lower on Monday, as investors took some profits after last weeks’ records while they waited for earnings season to begin and eyed events in Washington with trepidation. The Dow Jones industrial average fell 0.29%, the S&P500 lost 0.66%, and the Nasdaq 1.25%.

In the currency market, the rupee fell by 16 paise to close at 73.40 against the US dollar on Monday, tracking a rebound in the American currency overseas.

The dollar edged higher for a fourth straight day. The euro was little changed as was the pound. The yen was flat. The offshore yuan was higher by 0.1%

In the oil market, crude prices slipped. WTI crude fell 0.1% to $52.22 a barrel.

And in the bullion, gold prices continued to drop for a third straight day, shedding Rs 685 to Rs 49,534 per 10 gm in Mumbai. Silver prices tanked Rs 2,361 to Rs 65,013 per kilogram. In the international markets, gold traded steady this morning at $1,844 per ounce.

All in all, the trade setup on Dalal Street looked weak. On Monday, Nifty50 formed a higher high for the 13th session in a row. According to analysts, nothing concrete on the technical charts suggests the index's ongoing rally is in danger.

Let me now give you a heads-up on some of the top news we are tracking at this hour.

... Long-term FPIs, also known as the ‘sticky funds’, have raised bets on Indian equities, according to an analysis by the ET Intelligence Group of the data on assets under management from depository NSDL. This may offer some solace to market observers worried about the increasing influence of hot money or short-term investments by FPIs

... IT stocks continued their rally on Monday after TCS posted better-than-expected results for the quarter ended December 31, 2020. NSE IT index rallied another 3.3% to hit an all-time high. Analysts said despite rich valuations following a 22% rally in the Nifty IT index over the last three months, IT stocks are likely to continue their march as FY22-23 will be another watershed moment for the Indian IT sector with companies witnessing healthy growth and margin expansion.

... The upcoming Rs 1,000 crore initial public offering (IPO) of Indigo Paints has sparked traders’ interest in shares of its listed peers. In the past month, Berger Paints’ shares gained 20% and Asian Paints jumped 13%. Akzo Nobel India and Kansai Nerolac Paints surged 10% each. Analysts, however, recommend caution because of rich valuations.

... The government’s targeted initiatives and rising demand for ready and nearly-completed homes have provided a fillip to a bevy of stuck and delayed housing projects despite the upheaval caused by the Covid-19 pandemic. The measures including the last-mile funding for stressed realty projects through the SWAMIH fund and RBI’s liquidity-generation measures have aided the completion of these projects.

... Redemption pressure in large-cap funds has increased over the past two months even as the benchmark equity indices are scaling new heights. This is visible from the ratio of gross purchases and gross sales for the category, which has remained between 0.45 and 0.47 for the past two months. It is one of the lowest among major fund categories according to the data from the Association of Mutual Funds in India.

... RBI says Indian banks’ non-performing assets could nearly double to as high as 14.8% in one year from 7.5% in September 2020 in case of a severe stress scenario. RBI in its latest Financial Stability Report said banks are still working out a restructuring package for borrowers hit by the Covid-19 pandemic

Lastly, here's an update on all the stocks that are buzzing this morning.

Dr Reddy’s Laboratories on Monday announced the start of its Phase 3 clinical trial of Russia's Sputnik V Covid-19 vaccine after receiving clearance from the independent Data and Safety Monitoring Board

The Bombay High Court on Monday restrained until further order USV, the distributor of German skincare brand SebaMed’s products in the country, from running advertisements that HUL alleges disparage its products.

Tata Teleservices has moved the Supreme Court appealing for a recalculation of adjusted gross revenue (AGR) dues.

Oslo-headquartered Statkraft is in advanced talks to buy Lanco’s under-construction hydel power unit, Lanco Mandakini Hydro Energy

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