Key developments that will drive the markets this week

Let us look at all important news that could impact market sentiment in the week ahead.

Mar 30, 2021 07:03 IST India Infoline News Service

Last Friday, Sensex fell 849.74 points or 1.70% to end at 49,008.5 and while the Nifty50 declined 236.7 points or 1.6% to close at 14,507. Stock markets were shut on Monday for the occasion of Holi. Let us look at the events that may drive the market in the truncated week ahead.




COVID19 spike spurs lockdown fears

India on Sunday reported 62,258 new coronavirus infections, the highest single-day rise so far in 2021. Maharashtra, Punjab, Chhattisgarh, Karnataka, Gujarat, and Madhya Pradesh have accounted for 79.57% of the new COVID-19 cases are reported in India. Of these, Maharashtra reported the highest daily new COVID-19 cases at 36,902. It is followed by Punjab with 3,122 while Chhattisgarh reported 2,665 new cases. Maharashtra CM, Uddhav Thackeray, on Sunday had directed the administration to plan strategies for a smooth implementation of a lockdown in the days to come—an announcement that will likely loom on investors’ minds as markets open Tuesday. The Maharashtra government announced a night curfew starting from 28th Mar 2021. The night curfew has been imposed in Maharashtra in view of the alarming rise in the number of coronavirus infections being reported daily.

Archegos Capital margin call trigger

On Friday, Archegos Capital Management, run by former Tiger Asia manager Bill Hwang, was forced to unload of shares worth $20bn following its inability to meet margin obligations to brokers. The warnings on big losses triggered a sell-off in banking stocks around the globe on Monday, with Morgan Stanley falling nearly 4% and Goldman sliding 1.5%. Nomura shares closed down 16.3%, a record one-day drop, while Credit Suisse shares tumbled 14%. Without naming Archegos or quantifying the loss, Credit Suisse said the loss could be “highly significant and material” to its results for the first quarter. Nomura too did not name Archegos, but said it faced a potential loss of $2 billion from an unnamed US client.

Archegos is run by Bill Hwang, who was a fund manager at Julian Robertson’s famous hedge fund Tiger Management in the 90s. Hwang then set up his own fund called Tiger Asia, with Robertson’s backing. In 2012, Tiger Asia and Hwang were charged with insider trading and market manipulation by the Securities Exchange Commission and had to pay $44 mn in penalties. Hwang then converted Tiger Asia into a family office.
US bond yields

US bond yields rose on Monday, with the 10-year yield hovering above 1.69%. Treasury yields have been rising rapidly in the past week over concerns about possible inflation growth amid the economic recovery from the coronavirus pandemic. However, data out Friday for the personal consumption expenditure price index, showed muted price inflation in February. Data on Friday showed U.S. consumer spending fell in February by the most in 10 months, as a cold snap gripped many parts of the country and the boost from a second round of stimulus checks to middle- and lower-income households faded. Fed Chairman Jerome Powell said earlier this month that the central bank did expect inflation to rise this year but said this “transitory rise” would not be enough for the Fed to adjust its policy.
 
Auto sales
Automobile companies are set to furnish their auto sales numbers for the month of March on 1st April. Car makers reported robust sales in the month of February. In the penultimate month of FY2021, cumulative sales numbers of 14 PV makers for February 2021 add up to 3,08,611 units, which is crisp 23% year-on-year growth. A number of PV makers companies, particularly those with popular SUVs, are witnessing unprecedented demand, especially for new models. The trend is likely to continue in March as well. However, as the cases COVID19 rise and with many parts of the country contemplates a strict lockdown, it needs to be seen whether auto sales industry witnessed any impact from this phenomenon.

Listing

Nazara Technologies shares will be listed on the stock exchanges on 30th March. The public offer of the Rakesh Jhunjhunwala-backed mobile gaming company was subscribed 175.46 times, according to subscription data on the exchanges. The portion set aside for retail investors was subscribed 75.29 times, non-institutional investors' portion was subscribed 389.89 times and qualified institutional buyers segment attracted 103.77 subscription. Nazara Technologies is present in the fast-growing segment of interactive gaming, eSports and gamified early learning solutions and is one of the best plays on the internet sector. The company owns properties like World Cricket Championship (WCC) and CarromClash in mobile games, Kiddopia in gamified early learning, Nodwin and Sportskeeda in eSports and eSports media, Halaplay and Qunami in skill-based, fantasy and trivia games

US Stocks

Wall Street’s major indices traded lower Monday led by losses in tech shares following reports that a large investment fund was forced to sell massive holdings, which could ripple through the broader market. The Dow Jones Industrial Average was down 25 points, or 0.1%, to 33,047. The S&P 500 index fell 12 points, or 0.3%, to 3,962, while the Nasdaq Composite tumbled 101 points, or 0.7%, to 13,038.

Stocks were weighed down after reports that Hwang’s Archegos Capital Management sold over $20 billion in holdings, momentarily sending shock waves throughout the market. Global investment banks Credit Suisse Group and Nomura Holdings on Monday said they were likely to take hits due to the volatility in the market, but didn’t directly name Hwang’s fund. On the health front, the global coronavirus tally rose above 127 mn on Monday, according to data aggregated by Johns Hopkins University, with the U.S. accounting for a quarter of that number, at more than 30 mn.

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