Latest news with #Palviya
Mint
2 days ago
- Business
- Mint
Market geared for fresh upmove post RBI action
The surprise monetary easing on Friday ignited an aggressive selling of Nifty put options, indicating that India's benchmark stock index is poised for a surge when the market opens on Monday. On Friday, the Reserve Bank of India's monetary policy committee (MPC) transmitted a clear signal for growth, slashing the benchmark repo rate by 50 basis points (bps) and the cash reserve ratio requirement (CRR) by 100 bps. Traders responded by selling a huge quantum of put options at Nifty's 25,000 level, reflecting the belief that the index would clock smart gains on Monday. Open interest (OI) in Nifty's weekly 25000 strike put expiring on Thursday rose a whopping 470% to 83,472 contracts on Friday after the policy announcement. Open interest is the total number of outstanding derivative contracts. Sriram Velayudhan, senior vice-president, IIFL Capital Services, said this reflects the fresh trigger for markets from the RBI's unexpected action. "The outsized cuts in the repo rate and the unexpected significant easing of the CRR have given a bullish texture to the market," said Velayudhan. "Most mutual funds are underweight financials and IT, and with this cut, we expect fresh buying in rate-sensitives, which will prop up the market. One of the signals of bullishness is reflected in the sale of the ATM (at-the-money) put, which shows the high confidence of the traders." At-the-money refers to options which trade at or close to the current market price of an underlying index or stock. 'Bullish sign' Rajesh Palviya, SVP (head of derivatives & technical research), Axis Securities agreed with Velayudhan's take on the index. "Writing puts at the same level as the Nifty is a very bullish sign," said Palviya, who raised the range for the Nifty to 24900-25500 from 24500-25100 after the RBI action. Traders have baked in a range of 24670-25330 for the Nifty this week with an immediate bias to the upper end of the range, Palviya added. Also read | Has RBI unleashed its arsenal too soon for the economy? Traders sell more put options relative to call options when they believe markets will rise, enabling them to pocket the premiums paid by the put buyers—investors who buy put options either to punt or to hedge their portfolios against anticipated volatility. Conversely, traders sell more calls than puts when they expect markets to fall. The Nifty closed 1% higher at 25003.05 on Friday after RBI cut the rate at which it lends to banks (repo) by a greater-than expected 50 bps to 5.5% against the market estimate of 25 bps. It also reduced the share of total deposits banks must park with it (CRR) by 100 bps in tranches to 3%. The policy panel also shifted monetary policy stance to neutral from accommodative. FPIs trim positions Meanwhile, foreign portfolio investors (FPIs) trimmed their short index futures positions to 92730 contracts on Friday from 106,988 contracts a day earlier. Retail and high net worth investors (HNIs) booked some profits on their bullish index futures positions by reducing these to a net long 61524 contracts on Friday from 68669 net long contracts on Thursday. FPIs have turned net buyers of Indian shares since mid-April as the dollar weakened and the US bond yields fell. After selling ₹2.85 trillion worth of shares in the secondary market between October and March, fuelling a 9% fall in the Nifty to 23519, they net purchased shares worth ₹21,327 crore in April and May, aiding the Nifty's recovery by 5.2% to 24751 by the end of last month. Also read | RBI to soon issue easier gold loan rules for small-ticket borrowers Since then, FPIs turned net sellers worth ₹12,077 crore in the month through 5 June, as per NSDL, which hadn't released the figure for Friday. However, BSE data shows that FPIs net purchased shares worth a provisional ₹1009.71 crore on Friday, while domestic institutional investors purchased a net ₹9,342.48 crore. BSE data shows that DIIs absorbed the FPI selling at lower levels, net buying ₹3.75 trillion worth of stocks between October last year and March this year. Their buying of ₹1.2 trillion since March end to 6 June drove the recovery from a multi-month low to 21743.65 on 7 April to 25003.05. From March end to 6 June, FPIs net invested ₹10,260 crore in the cash market, NSDL data showed. Jyoti Jaipuria, founder of PMS firm Valentis Advisors, is bullish on markets after the RBI policy, as he believes the rate cut and CRR reduction, could spur consumption demand, leading to better earnings growth. He is bullish on small cap companies in the financial, chemicals, pharma and engineering segments. Also read | RBI aims to boost economic growth, liquidity with jumbo rate and CRR cuts
Economic Times
29-05-2025
- Business
- Economic Times
Sensex, Nifty struggle despite Asian gains. Here's why Trump tariff verdict fails to lift mood
Tired of too many ads? Remove Ads Here are top factors that are weighing market sentiments: Monthly expiry Tired of too many ads? Remove Ads Tariff impact Tired of too many ads? Remove Ads The Indian headline indices BSE Sensex and Nifty started Thursday with a gap up but soon slipped lower. This occurred despite strong gains in Asian markets after a U.S. federal court blocked President Donald Trump's proposal to impose heavy tariffs on imports from nearly all hitting the day's high of 24,889, Nifty plunged over 200 points to hit the day's low of 24,677 while the 30-stock Sensex fell to 81,107 following the highs of 81,816 it made in the initial major Asian indices like the Japanese Nikkei surged 711 points or nearly 2% in the intraday trade while Hong Kong's Hang Seng index was up 300 points or 1.3%. China's Shanghai Composite index was higher by 0.70% around 1 pm India time, while South Korea's Kospi also traded 2% experts attributed this lackluster trade to two primary reasons while conceding that the domestic markets are under consolidation with a broader trend towards the positive Palviya, Senior Vice President, Research-Head Technical & Derivatives at Axis Securities, said that the markets have given up their initial gains amid selling pressure because of monthly expiry. He said that markets fell amid call writing and adjustments being said that the broader trend remains positive and markets will likely gain from the next session. 'Index is subdued but action is happening in the mid and smallcap stocks,' he Nifty Midcap 100 was up 0.30% while the Nifty Smallcap 100 was half-a-percentage point a similar sentiment, Nilesh Jain, Head Vice President, Equity Research Technical and Derivatives at Centrum Broking said Indian markets have been under consolidation for the past 2-3 sessions. He said that monthly expiry is the reason behind today's lackluster trade and the long term trend remains ongoing trade negotiations between India and the U.S., the impact of a Federal court blocking Trump's tariff decisions will have a limited impact on India, two experts said."India was comparatively less impacted than its Asian peers from the outset, as the higher tariff rates were primarily imposed on other countries. Furthermore, news of favorable trade discussions between the U.S. and India helped ease concerns about a significant impact on Indian exports to the U.S. These factors may explain why Indian markets have not shown any major reaction to the recent U.S. court ruling on tariffs," Ajit Mishra, Senior Vice President - Research at Religare Broking Indian markets are in a consolidation phase, said Aamar Deo Singh, Senior Vice President-Equity, Commodity & Currency at Angel One opining that the U.S. federal court's decision will have a limited impact on India.'We still have to set-up manufacturing capabilities to first come to the level where we become large exporters,' he metal sector held its ground firmly on the D-Street, with the Nifty Metal index jumping by 1.5%. Barring APL Apollo Tubes, the other 14 stocks were trading in the green, jumping up to 10%. Lloyds Metals And Energy, Jindal Stainless, Hindustan Zinc, Jindal Steel & Power, Tata Steel, NMDC, Hindustan Copper, Steel Authority of India (SAIL), JSW Steel, Adani Enterprises, National Aluminium Company (NALCO) and Hindalco Industries were up between 3% and 0.12%.Welspun was the top gainer, jumping by 10% in the day's trade. The company had announced its earnings on Wednesday where the company reported 143% surge in its Q4FY25 net profit. SAIL , too, reported its earnings on Wednesday, reporting an 11% growth in its Q4 PAT.A three-judge panel of the US Court of International Trade ruled that Trump overstepped his authority when he invoked the 1977 International Emergency Economic Powers Act to declare a national emergency and justify the sweeping tariffs overturned decades of US trade policy, disrupted global commerce, rattled financial markets and raised the risk of higher prices and recession in the United States and around the Read: Turnaround stocks: IFCI, Shree Renuka Sugars among six BSE 500 stocks to swing to profit in Q4 (Inputs from Agencies)(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Mint
19-05-2025
- Business
- Mint
Centre tweaks provision to ease compliance for brokers
New Delhi: The government has eased compliance for stock and commodity market brokers by providing clarity on investments that do not involve client money. The Department of Economic Affairs (DEA), ministry of finance has amended Rule 8 of the Securities Contracts (Regulation) Rules, 1957 to clarify that any investments made by a member (broker) shall not be treated as business activity, unless such investments involve client funds or securities or result in a financial liability for the broker, according to a notification on Monday. Rule 8 of the Securities Contracts (Regulation) Rules, 1957 (SCRR) restricts brokers from engaging, as a principal or employee, in any business other than securities or commodity derivatives. However, according to the rule, they may act as brokers or agents in other businesses, provided such roles do not entail personal financial liability. 'This (change) opens the room for brokers to easily utilise their own funds for a variety of purposes, to buy assets, etc., which was a time-consuming affair earlier,' said Rajesh Palviya, SVP, Axis Securities. 'One of the reasons for the government easing the rules is the stringent norms for client margin funding, among others,' said Palviya. 'Under this, the broker has to collect an upfront 20% margin from clients who wish to trade stocks on an intraday basis. As room for misutilisation of client funds is already tightened, there was a thinking this rule too should be eased.' The industry had concerns over the interpretation of Rule 8, which prescribes eligibility criteria for membership in stock exchanges. 'After taking note of the concerns raised by various stakeholders over certain provisions in the said Rules, the DEA had released a Consultation Paper in September 2024, inviting stakeholder comments,' the ministry said in its statement. 'Given the growth in the scale and interconnectedness of the financial sector and the evolution of nature of business of brokers with time, the DEA felt it necessary to review the appropriateness of safeguards embedded in the Rules so that the intent of the Rules is served without constraining activities of the stakeholders,' it added. The amendment, issued through a gazette notification, follows stakeholder consultations and aligns with the government's broader drive to simplify financial sector regulations. 'The amendment has been carried out after due consideration of feedback from the stakeholders and is part of the broader emphasis of the Government to provide regulatory clarity and enhance ease of doing business in the financial sector," the finance ministry statement said. 'It will ensure that market intermediaries continue to support the development of India's capital markets in a transparent and well-regulated manner.' By updating the rule, the government aims to reduce compliance burdens and facilitate the smooth functioning of market intermediaries, while maintaining transparency and investor protection. The reform is seen as part of India's ongoing efforts to modernize its capital market ecosystem and attract greater participation.
