Foreign investor buying:
Foreign institutional investors (FIIs) have infused a record Rs1.09 lakh crore in the last two months of 2020. In this month till date, FIIs have poured nearly Rs40,000cr in Indian equities. The inflow of funds has increased post Presidential elections in the United States and weakness in the dollar index. The US dollar index, which contains six component currencies, fell below 90 mark for the first time since April 2018, which helped emerging markets currencies to gain strength.
The Federal Reserve during the week decided to keep rates unchanged and reaffirmed to continue its support through stimulus measures until the economy reaches maximum employment. This could prove to be a tailwind for FII inflows in domestic equities for the forthcoming months.
US stocks ended lower on Friday weighed down by uncertainty over the passage of the coronavirus stimulus. The S&P 500 lost 13.07 points, or 0.35%, to 3,709.41. The Nasdaq Composite lost 9.11 points, or 0.07%, to 12,755.64. The Dow Jones Industrial Average fell 124.32 points, or 0.41%, to 30,179.05.
A last-minute roadblock emerged on Friday as Democrats accused Republicans, namely Pennsylvania’s Sen. Pat Toomey, of attempting to encumber the incoming Biden administration by cutting off the Federal Reserve’s emergency lending abilities created by the CARES Act meant to protect the already battered economy. Congressional lawmakers averted a government shutdown on Friday by passing a short-term spending bill that keeps the government open at current spending levels through midnight-when they must decide on a possible shutdown.
However, over the weekend, US lawmakers inched closer to a deal on a $900bn economic relief package ahead of a Sunday night funding deadline, after striking a late-night compromise over Republican demands to curb the Federal Reserve’s crisis lending powers. Leading negotiators in both the parties have agreed on broad strokes of a $900bn stimulus framework that would deliver direct payments to most US taxpayers. The bill would also provide a federal $300/week bonus to millions of unemployed workers, bankroll more than $300bn in tax relief to small businesses and provide states with cash for Covid19 vaccine distribution, among other things.
The race to get India vaccinated has begun in fervor. News reports have suggested that Indian officials, under anonymity, have said that the vaccine drive is expected to begin by January. A few vaccine candidates were likely to get emergency-use authorization from the drug regulator in the next few weeks. Two companies have already applied for consideration, and six more are in various stages of clinical trials. The Covishield vaccine made by Serum Institute of India, which has partnered with British pharmaceutical company AstraZeneca; and Covaxin, being developed by Bharat Biotech in collaboration with the Indian Council of Medical Research (ICMR) have already applied for authorization.
India has already started preparation for roll out of vaccine across the country once it gets green signal from the government body in coming weeks. The government already stated that healthcare staff, frontline workers and people with the age of more than 50 will get the vaccine first in terms of priority.
Antony Waste Handling Cell's Rs300cr initial public offer (IPO) will open for subscription on December 21. The IPO will be open for three days i.e. December 21-December 23. The company has fixed price band for its public issue at Rs313-315 per share. The shares are likely to be listed on the bourses on January 1, 2021. The IPO comprises fresh issuance of shares worth Rs85cr and an offer-for-sale of 68,24,993 equity shares by existing shareholders. The company allotted 2,857,003 equity shares at Rs315 apiece to 10 anchor investors to raise Rs89.99cr. The anchor investors include Massachusetts Institute of Technology, Tata AIG General Insurance Company Ltd, SBI Equity Savings Fund and SBI Infrastructure fund, among others. Tonbridge (Mauritius) Ltd, Leeds (Mauritius) Ltd, Cambridge (Mauritius) Ltd, and Guildford (Mauritius) Ltd will be offering shares through the offer-for-sale.
The European Union’s chief negotiator has signaled that post-Brexit trade talks will continue if Sunday’s deadline passes without an agreement, saying they had reached a “crucial moment”. Whether nine months of talks between the UK and European Union result in a trade accord will depend on the two sides bridging their disagreements over fishing, the last remaining major obstacle. But that is proving difficult: European countries with large fishing industries are resisting any further concessions proposed by the European Commission. Nevertheless, officials from both sides said the gap can still be bridged. Failure to reach a trade deal would mean the UK doing business with its largest and nearest commercial partner on terms set by the World Trade Organization -- meaning millions of businesses and consumers would face the cost and disruption of tariffs and quotas.
In India, all eyes will be on the foreign exchange reserves data which is scheduled to be announced on December 25. Foreign exchange reserves in India increased to a new record of $579,346mn on December 4 from $5,74,820mn in the previous week. Globally, focus this week will be on the slew of data releases from United States. Q3CY20 GDP data, New home sales for November and Initial jobless claims data are set to be released this week.