Snapping five session losing streak, Indian benchmark indices closed higher on Friday, reversing weak cues from Asian peers. The BSE Sensex surged 641 points or 1.3% to close at 49,858, and the NSE Nifty ended at 14,736.80, up by 178.95 points or by 1.23%. Let us look at the events that may drive the market in the week ahead.
India recorded 43,846 new coronavirus cases in a day, the highest single-day rise so far this year, taking the nationwide COVID-19 tally to 1,15,99,130, according to the Union Health Ministry data updated on Sunday. The death toll increased to 1,59,755 with 197 daily new fatalities, the highest in 97 days, the data showed. The 197 new fatalities include 92 from Maharashtra, 38 from Punjab, 15 from Kerala and 11 from Chhattisgarh. The rise in active cases has triggered fears of a second wave in the country even as vaccination taking place at a swift pace. About 10.60 lakh COVID tests were conducted and 27.23 lakh people were vaccinated on Friday. India, so far, crossed the vaccination tally of 4 crore, reporting 4.21cr vaccinated people in the country.
US-China trade meet
In their first trade meet since President Joe Biden took office in January, US and China were quite confrontational and were critical of each other’s policies. On Thursday, US Secretary of State Antony Blinken and National Security Advisor Jake Sullivan met China's top diplomat Yang Jiechi and Foreign Minister Wang Yi, reports suggested. The US-Chinese relationship would be competitive if necessary, cooperative if possible, and hostile if need be, Blinken said in his opening remarks. China's actions threatened global stability, he warned. In retaliation, Yang said: "It is important for our two countries that we conduct our affairs well instead of shifting the blame on someone else in the world." Two of the world’s biggest economies also criticised each other over human rights, trade, and international alliances. It needs to be seen whether President Biden continues in the footsteps of his predecessor Donald Trump as far as trade relations with China are concerned. Under former President Donald Trump's administration, ties between China and the US reached their lowest level since diplomatic relations were established in 1979.
US Bond yields
Yields on US Treasuries have surged to their highest level in more than a year from record lows hit in 2020, as Federal Reserve commitments to hold rates near zero for years to come encouraged investors to bet economic growth and inflation will heat up. The 10-year Treasury yield rose from 1.64% late on Wednesday to 1.7% on Thursday — a 14-month high. US bond yields are the ultimate barometer of risk worldwide. If the yields are going up, investors tend to become cautious, which also tends to impact FIIs’ risk sentiment. In general, this does not bode well for Emerging markets (Ems) like India. In its policy review last week, the US Federal Reserve pledged to keep the interest rate low till 2023 and continue its $120 billion bonds buying programme per month, while it raised GDP forecast to a 6.5% for FY21 and forecast unemployment rate to fall to 4.5% in the current year.
Barbeque Nation's share sale via initial public offering (IPO) will open for subscription on Wednesday, March 24th, in the price band of Rs498- Rs500 per equity share. The public offer of the company will close on Friday, March 26th, remaining open for investors for a period of 3 days. Through its initial public offer, Barbeque Nation plans to raise around Rs453cr at the upper end of the price band. The IPO consists of a fresh issue of shares worth Rs180cr and an offer for sale of up to 5.46mn equity shares by the present shareholders and promoters. According to data on stock exchanges, the Barbeque Nation IPO market lot size is 30 shares. The minimum order quantity of the IPO is 30 shares. A retail investor can apply for a maximum of up to 13 lots, specifically 390 shares or Rs195,000. The shares are proposed to be listed on stock exchanges BSE and NSE. The date of the listing is not decided as yet.
The stock exchanges will have a very busy week as a slew of IPOs are set to list on the exchanges. Anupam Rasayan is set to debut on the bourses on March 24th, Craftsman Automation and Laxmi Organic Industries will list on March 25th, and Kalyan Jewellers on March 26th, as per the schedule available in their RHPs.
Wall Street’s main indexes ended mixed on Friday dominated by concerns about rising bond yields. The Dow Jones Industrial Average fell 234.33 points, or 0.7%, to 32,627.97. The S&P 500 declined 2.36 points, or 0.1%, to 3,913.10, while the Nasdaq Composite climbed 99.07 points, or 0.8%, to 13,215.24.
The yield on the benchmark 10-year Treasuries crossed 1.75% to hit a 14-month high a day after the Fed projected the strongest growth in nearly 40 years as the COVID-19 crisis winds down. The Fed also repeated its pledge to keep its target interest rate near zero for years to come. A recent $1.9 trillion spending stimulus sparked fears of rising inflation and contributed to the jump in longer-end Treasury yields. Underscoring the staggered recovery in the labor market, data showed the number of Americans filing for jobless benefits unexpectedly rose last week.