Sebi working on ASBA-like facility for secondary markets

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Sebi chairperson Madhabi Puri Buch on Wednesday said the regulator was engaging with various stakeholders to introduce ASBA-like facility for transactions in the secondary market. At present, applications supported by blocked amount (ASBA) is used for applying to initial public offerings wherein an applicant’s account doesn’t get debited until shares are allotted to them.

“The regulator is trying to facilitate direct movement of securities and money to the issuer or the exchange. If money is passed through many hands, there is a structural vulnerability that arises at different stages. The attempt is to eliminate the process of wrongdoing through technology and process re-engineering. As a regulator, we are setting the pace globally,” Buch said at the Global Fintech Fest held at Mumbai.

Also Read: SC junks Yash Birla’s plea against Sebi in GDR case

Buch asked entrepreneurs and startups to eschew business models built on anonymity and ones that come with exit barriers for customers. She goaded the fintech community to work towards financial inclusion and build infrastructure that is inclusive by lowering the cost of delivery and allowing businesses to afford financial inclusion.

“We follow a hybrid of rules- and principles-based regulations. Startups need to think about the principles that may guide the regulator. You will be ahead of the curve if you anticipate what the regulator will do”, said Buch.

She highlighted four guiding principles for entrepreneurs. “While on social media, I can call myself Sunflower 500, but in the fintech world anonymity is not something that the regulator is going to permit. If anonymity is going to be a key selling proposition, it is not okay,” said Buch.

The second principle is regarding transparency and ensuring investors or customers take informed decisions. “The business model cannot be woven around a black box. If the regulator senses there is inadequate disclosure, then is the investor being conned? If your claims cannot be validated and audited, then your business model is under threat”, she said.

The third principle is around financial inclusion. “If you can demonstrate that your business model supports financial inclusion, the regulator will be supportive and will make things easier for you,” she said.

Buch said businesses that build barriers for customers wanting to exit are unlikely to find favour with the regulator. “There are business models that work on the assumption that once the consumer is in, it will be hard for him to get out.” Sebi does not want ‘Abhimayus’ in the market. The principle of “ek baar bakra aa gaya toh usko bahar jaane nahin denge” won’t work, she said.

Buch said the infrastructure for innovation – such as Aadhaar, or UPI or account aggregator – is a public good, and private innovation needs to build on top of those rails. “If the idea is to own the infrastructure, let’s remember that’s not the path that India takes. Markets thrive on data. Every piece of data must be disclosed and has to be available free of cost and in a machine-readable format. For us, data is a public good. No private person can claim ownership on this,” she said.

ITC stocks jump as firm focuses on hotel biz

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Shares of ITC have been hitting to fresh 52-week highs on a regular basis following the diversified conglomerate’s recent reiteration that it is exploring an ‘alternative structure’ for the hotels business.

On Friday, the scrip on the BSE closed 0.17% higher to Rs 330.55 after hitting a fresh 52-week high of Rs 333.35. Shares climbed to a 52-week high of Rs 330.55 on Thursday as well, and later settled at Rs 330 apiece. Shares also hit a fresh multi-year high.

Also Read: Share Market HIGHLIGHTS: Sensex ends 105 pts up, Nifty at 17833 amid volatility; Infosys, TCS, SBI stocks jump

Puri, who was leading a CII business delegation to the US, said the conglomerate will divulge details about the alternate structures for the hotels business after “things are finalised”. The hotel segment would pursue the “asset-right” strategy to ensure that it remains competitive and continues to deliver superior performance. Puri also said the company is exploring foreign markets for the hospitality segment.

The company, in fact, had talked about “exploring” alternative structures for its hotels’ segment before the coronavirus outbreak.

“When the pandemic came in, we said that we are holding it for now till things normalise, and we have reiterated in the annual report and the investors meet that we will take it forward in line with industry recovery dynamics,” Puri told reporters in July this year. “So, that is where it stands. It is very much on the table,” he had added.

FII, DII data: FPIs sold shares worth Rs 7702 Cr, DIIs added shares worth Rs 6558 Cr on October 26, Thursday

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Foreign institutional investors (FII) offloaded shares worth net Rs 7,702.53 crore, while domestic institutional investors (DII) added shares worth net Rs 6,558.45 crore on October 26, 2023, according to the provisional data available on the NSE.

For the month till October 26, 2023, FIIs sold shares worth net Rs 25,098.60 crore while DIIs bought shares worth net Rs 23,123.45 crore. In the month of September, FIIs offloaded shares worth net Rs 26,692.16 crore while DIIs added equities worth a net Rs 20,312.65 crore.

On Thursday, the NSE Nifty 50 tanked 264.90 points or 1.39% to settle at 18,857.25, while the BSE Sensex shed as much as 900.91 points or 1.41% to 63,148.15.

Foreign institutional investors (FII) or Foreign portfolio investors (FPI) are those who invest in the financial assets of a country while not being part of it. On the other hand, domestic institutional investors (DII), as the name suggests, invest in the country they’re living in. Political and economic trends impact the investment decisions of both FIIs and DIIs. Additionally, both types of investors  –  foreign institutional investors (FIIs) and domestic institutional investors (DIIs) – can impact the economy’s net investment flows.

US Stocks: Wall Street set for muted open after rout

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Wall Street was set for a subdued open on Wednesday following a sharp selloff in the previous session after red-hot inflation data fanned worries about how much and how long the Federal Reserve will hike interest rates.

The three major indexes on Tuesday posted their biggest one-day percentage declines since June 2020, as the consumer price report cemented bets that the U.S. central bank will go ahead with its third straight 75 basis points increase in rates next week.

In the latest data, monthly U.S. producer prices dipped 0.1% in August, while it rose 8.7% year-on-year in August from 9.8% in July. Economists polled by Reuters had forecast the PPI edging up 0.1% and increasing 8.8% year-on-year.

Excluding the volatile food, energy and trade services components, core producer prices rose by higher-than-expected 7.3%. Markets are now likely to look forward to the monthly retail sales data on Thursday.

“After yesterday’s sell-off, just about anything would be welcome. And what we see is that the producer price index numbers came in pretty much as expected,” said Hugh Johnson, chief economist of Hugh Johnson Economics in Albany, New York.

Also Read: US equities slump after US inflation falls to 8.3%

“It’s fairly clear now that they’re (Fed) going to raise interest rates by 75 basis points at the September meeting. The expectation is for 50 basis point rate hike in November and maybe another 25 in December.”

Stocks had rallied ahead of the inflation data as easing commodity prices, especially oil, had raised hopes the Fed would scale back its aggressive policy tightening even as policymakers reiterated their determination to bring inflation to their 2% target through rate hikes.

Growing expectations for a more hawkish Fed are an unwelcome development for a market already contending with worries that the central bank’s efforts to tame inflation could tip the economy into a recession.

September, which is a seasonally-weak period for markets, will also see the Fed ramp up the unwinding of its balance sheet to $95 billion per month, a move some investors worry may add volatility in markets and weigh on the economy.

“With the federal funds rate poised to be above 3% after next week’s meeting and QT running at full speed, Fed officials may finally start to feel that the pace of tightening can moderate in Q4 and beyond,” Wells Fargo economists wrote in a note.

“That said, there is a big difference between slowing the pace of tightening and a full-blown policy pivot.”

At 8:40 a.m. ET, Dow e-minis were up 50 points, or 0.16%, S&P 500 e-minis were up 11 points, or 0.28%, and Nasdaq 100 e-minis were up 42.5 points, or 0.35%.The CBOE volatility index, also known as Wall Street’s fear gauge, rose to 27.18 points, inching closer to a two-month high hit on Tuesday.

Rate-sensitive shares of technology and growth companies such as Tesla Inc, Apple Inc, Amazon.com , Meta Platforms, Alphabet Inc and Microsoft Corp were mixed in premarket trading after leading declines on Tuesday.

Honor says its new Magic 6 phone will let you open apps with your eyes

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Generative AI has become a prominent topic of discussion, with continuous advancements emerging on a daily basis. Today, we witness new breakthroughs in this field regularly. Now, Honor is elevating this technology to a new level with its innovative Magic 6.

Honor CEO George Zhao at Qualcomm’s 2023 Snapdragon Summit announced that its Magic 6 smartphone will feature eye-tracking technology, which will allow users to open apps and perform other actions using only their eyes. The company calls this technology “Magic Capsule,” and it is described as an “eye-tracking based multimodal interaction” feature.

ALSO READ l Honor Magic VS2 with Snapdragon 8+ Gen 1 launched, shipping expected from Oct 17

The use of eye-tracking technology in smartphones is not entirely new. In 2018, Samsung released the Galaxy S9 with an eye-tracking feature called Iris Scanner, which allowed users to unlock their phone and authenticate payments with their eyes.

Honor is the first company to announce a smartphone with eye-tracking technology that is specifically designed for interacting with apps and features. If Magic Capsule is successful, it could change the way we interact with our smartphones. Magic 6 smartphone will also have a virtual assistant powered by Qualcomm’s on-device AI. It can help you find and edit videos on your device by selecting specific criteria.

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Buy TCS, Infosys for near-term gains, charts show upside potential for these four IT stocks

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By Manish Hathiramani

The Nifty has been moving from strength to greater strength and continues to project a strong momentum going forward. While short term corrections and profit booking phases cannot be ruled out, the overall trend remains bullish. We just witnessed a sharp correction a couple of days back where from a high of 13777 the Nifty made a low of 13131. This has not changed the macro trend and one can still find stocks worth investing in. I have shortlisted a few stocks within the IT pack which in my opinion still have steam left and can propel the index further.

TCS: It was imperative for this stock to get past 2450 on a closing basis for an investment buy which it did with complete ease. The stock continues to remain in the hands of the bulls and we should endeavor a short term target of 3000 with a stop loss of 2800. From an investment perspective, the target would be 3200 with a stop loss of 2600.

HCL TECH: The level of 800 was a good support point for this stock and we were able to bounce from there rather quickly and in a span of 4-5 weeks we are trading above 900. There is still a lot of steam left and we could project a target of 1070-1100 and place a stop loss at 795.

WIPRO: This stock has a similar chartical structure to HCL TECH. The resistance level was 290 which the stock flew out of and achieved 370-380 in just 3-4 weeks. We are headed higher and can trade for a target of 420 and a stop can be placed at 310.

(Manish Hathiramani is a proprietary index trader and technical analyst at Deen Dayal Investments. Views expressed are the author’s own. Please consult your financial advisor before investing.)

Bond yields seen tad lower on marginal borrowing cut; RBI decision key

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Indian government bond yields are expected to open marginally lower on Friday, after New Delhi slightly trimmed its planned borrowing, although the Reserve Bank of India’s (RBI) policy decision due later in the day would dictate further moves. The benchmark Indian 10-year government bond yield is seen in a 7.31%-7.36% band until the monetary policy decision due at 0430 GMT, a trader with a private bank said. The yield ended at 7.3405% on Thursday. B

India has cut its gross borrowing to 14.21 trillion Indian rupees ($174.41 billion) from 14.31 trillion rupees for 2022/23, and aims to borrow 5.92 trillion rupees during October-March, compared with 8.29 trillion rupees in the first half of the fiscal year. Supplies during October-March would also include 160 billion rupees of green bonds.

Also read| RBI Monetary Policy LIVE: MPC likely to hike repo rate by 50 bps; may cut growth forecast

“There should be a marginal impact of lower borrowing which also includes green bonds, but after the initial move, market will be reacting to monetary policy decision and more importantly (to) the guidance from the (RBI) Governor,” the trader said.A majority of market participants are expecting the central bank to raise its key interest rate by 50 basis points for a third consecutive time.

Also read| Share Market LIVE: Nifty, Sensex likely to open in red amid weak cues; RBI MPC eyed, 50 bps rate hike on cards

The RBI has already raised rates by 140 basis points between May and August to 5.40%, to tackle inflation that has stayed above its tolerance level for eight straight months through August.Meanwhile, global index provider FTSE Russell said, India will be retained on the watch list for a potential upgrade to Market

Accessibility Level ‘1’ and for consideration toward inclusion in the FTSE Emerging Markets Government Bond Index (EMGBI). “Though the country didn’t get added to the EMGBI, we expect the reaction in the G-Sec to be modest today as the AUM following EMGBI is small. The more consequential index decision would be JPM’s (JPMorgan) announcement,” DBS Bank said in a note.

Indian bonds yields have not reacted significantly to the recent spike in U.S. yields, as many market participants believe that an announcement regarding inclusion may happen soon. A recent Reuters said a decision may only happen in 2023.

Crude oil may fall to Rs 6500/bbl, recession, rate hike talks may weigh on oil prices; adopt sell on rise

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By Royce Vargheese Joseph

WTI Crude oil futures ended the previous week 2.34% lower and closed at $84.76 per bbl as demand concerns once again took center stage. A strong dollar also added downward pressure on energy prices as it makes commodities more expensive for buyers holding other currencies. Better than expected CPI data from the US improved the conviction of jumbo rate hikes from the Fed, inducing a demand-sapping recession. Comments regarding refilling US Strategic petroleum reserves added to the market volatility. Meanwhile, last week witnessed the most significant weekly SPR drawdown in US history, taking the emergency oil reserves to the lowest level since October 1984, as the government set a plan in March to release 1 million barrels per day over six months to tackle high fuel prices. 

Almost 8.4 million barrels of oil have been released from reserves, equivalent to 1.2 mbpd of release. Once again the momentum has picked up and this is the reason why we are seeing a rise in commercial crude inventories. On the supply side, the risk of disrupted rail shipments for crude and other products in the US amid the prospects of a labour dispute limited the downside.

Outlook: Oil might come under pressure ahead of the FOMC meeting

Crude oil has started the week on a positive note, amid reports that the Chinese city of Chengdu lifted a two-week lockdown, raising hopes of wider reopening throughout the country and boosting the demand outlook in the world’s largest crude importer. Stimulus measures are helping the recovery in China, which has been dampened by the zero covid policy and lockdowns. 

Also read: Gold Price Today, 20 Sep 2022: MCX gold falls ahead of US Fed policy decision; check support, resistance

Meanwhile, Iraq has resumed crude oil exports from Basrah oil terminal after an oil spill that occurred late 15th September halted loadings from the facility, curbing some 1 million b/d of exports from OPEC’s second biggest producer. Global oil consumption is being threatened by a darkening economic outlook. A hawkish US Federal Reserve, looming recession in Eurozone and China’s zero covid policy might add to demand concerns. Investors await two major central bank meetings this week – the Fed and the Bank of England. Fed is expected to deliver another jumbo-sized 75 bps hike, while BoE might go for 50 bps and raise concerns of a recession. Talks of recession and aggressive rate hikes might weigh down on oil demand and prices. We recommend a sell on rise strategy and expect prices to decline towards Rs.6,500 per bbl for the week. A bounce back could be seen in the event of a less hawkish Fed. 

(Royce Vargheese Joseph is a Research Analyst, Commodity at Anand Rathi. The views expressed are the author’s own. Please consult your financial advisor before investing.)

MCX crude oil Oct futures: Wait for crude to cross Rs 7,150/bbl; check key levels to watchout for next week

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By Bhavik Patel

US Fed’s commitment to keeping inflation under control was reiterated by the Fed chairman on the 21st Sept and the market was surprised by the bullish tone. Fed had predicted an interest rate of 4.4% by 2022 and 4.6% by 2023 which was more than what the market had anticipated. The market was looking at 4-4.25% by end of 2022 and this spooked the market with investors flocking to safe-haven US dollars. Oil prices in return slid as US Dollar got stronger. Oil prices were already trending down prior to the meeting. The rate hike sank them further. In this same week, before the FOMC meeting, crude got a boost after Russian President Vladimir Putin ordered a partial mobilization of troops that could signal an escalation of the war. This will be the first mobilization called since World War II.

Crude is hanging in the balance with negative and positive news on both sides. The interest rate hike is making the USD stronger and aggressive rate hikes will push the biggest economy into recession. US and China are the biggest consumers of oil and so prices are facing resistance. Until now it was the Chinese covid lockdown which was keeping prices checked but now recession fears are helping bears to control the price. On the other side, the positive news is that OPEC+ is already under-producing and the expected surplus this year will not be significant. Also, there is an increase in demand from China after the ease of lockdown. Chinese oil demand is on the mend, with several refiners planning to ramp up processing rates considerably. Europe is an obvious source of this higher demand after an embargo on Russian crude oil kicks into effect in December and an embargo on fuel imports follows in February. In anticipation of the higher demand, refiners in China expect the government to issue another fuel export quota batch for up to 15 million tons. With Natural gas prices at a record high, there are chances of crude replacing natural gas for electricity which will create additional demand.

Also read: MCX gold may give 1% return next week, rally seems to continue; support seen at Rs 48800 per 10 gm

Crude is trying to make base around 6500 in MCX Oct Fut. Below $80, OPEC and Non-OPEC won’t let the price remain for a long time and would start cutting production. So it would be unwise to short at the current position but there isn’t any technical set-up which calls for taking a long position. Since 30th August, crude is unable to cross the 20-day moving average displaying inherent weakness. We would recommend waiting for crude to cross the level of 7150 which is a recent swing high for taking a fresh long position with an expected price till 7400 and stop loss of 6600. As long as crude is in a range of 6500-6900, one can take directional trade for intraday traders but positional traders should avoid and take only once it breaches above 7150 in the Oct contract.

(Bhavik Patel is a commodity and currency analyst at Tradebulls Securities. Views expressed are the author’s own. Please consult your financial advisor before investing.)

Gold outlook remains bullish in 2021, but may not repeat 2020 performance this year; here’s why

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By Ravindra Rao

Gold has been on a rise for the last few years and the rally exacerbated this year owing to pandemic, which forced central banks and governments to undertake unprecedented monetary and fiscal measures to support their economies. Gold surged to a record high level of near $2080/oz in August 2020. However, it witnessed a correction of about 15% reaching a low of near $1770/oz in late November, before recovering back to currently traded $1880/oz. The recent sell-off has been mainly due to profit-taking amid hopes of a COVID -19 vaccine and year-end position squaring. Although it has slightly dented market sentiment overall outlook for gold is still upbeat.

In 2020, the Indian gold demand was severely impacted, by higher prices and slower economic activity. The sector has however seen some recovery with pick up in jewellery sales near festivals. Market players are now looking at the Budget to see if the government takes any measures to boost recovery in the jewellery sector. One of the long-standing expectations of the industry is to reduce the import duty to boost retail sales. A duty cut may make the domestic gold price cheaper and this may help boost demand. Another concern of the industry is KYC norms for jewellery purchases as it may dampen demand from small buyers. E-gold has become increasingly popular in urban India but more efforts are required to increase its appeal in the rural market in the form of digital literacy and awareness.

There are also talks of a Gold Amnesty scheme, as the move will help tap on unaccounted gold while government tax revenue may increase. In the last few years, there has been an increasing emphasis on boosting gold refining in India. The government may take further measures to incentivize domestic refining.

(Ravindra Rao is VP- Head Commodity Research at Kotak Securities. The views expressed are the author’s own. Please consult your financial advisor before investing.)