What changed for the market while you were sleeping

Good morning, dear reader!

After Monday’s smart rally, the domestic equity market should start from where it had left, if one were to go by the Nifty50 futures on the Singapore Stock Exchange. Wall Street ended flat in overnight trade, but Asian markets are surging this morning.

Here is your daily dose of all the big and small events – including Apple’s new iPhone launch –from around the world that may have changed your market while you were sleeping. Read on!

Goldman sees dollar rally ahead
The investment bank is unwavering in its view that the dollar rally that began in the early days of 2014 will continue in 2016. Why? Because the Wall Street bank sees the Fed hiking interest rates four times, not two, this year. And going by what Fed members Dennis Lockhart and John Williams are suggesting (a rate hike in April, possibly), the bank may not be too off the mark. A strong dollar, though, may hurt India Inc, as that will make it hard to pay back those dollar-denominated debt, affecting earnings. The exceptions to this are pharma and IT companies, which will benefit from the resultant weakness in the rupee.

World’s biggest company goes small
The world’s largest company by market cap, Apple, on Monday night revealed its small-size iPhone, called iPhone SE, priced at $399 (roughly Rs 26,000). The move is its second attempt to reach out to the mid-level consumers and emerging markets like China and India, among others. You won’t have it in a nearby mobile electronic store till May, when the phone will be released at large. Wall Street was quite indifferent to the mega event, as the Apple stock slipped 0.01 per cent.

Manufacturing does not paint a pretty picture
Activity in the economy’s manufacturing sector has likely slowed as the yearly SBI Composite Index shrunk to 49.5 from 51.3 in February. Data compiled by SBI Research also highlighted a decline in bank credit to the export sector due to low external demand. The report has raised concerns over the strength of the economic activity in March. Seen in tandem with the IIP data, which showed a contraction of (-)1.2%, economic activity does appear to be sluggish in March quarter.

Commodity trading to get a big push soon
The government is mulling allowing 100% foreign direct investment via the automatic route in 25 other segments of NBFCs (non-banking finance corporations). Commodity broking will one of the segments to benefit from the move. Given the nascent stage that commodity trading is in India, this will help bring know-how, risk management practices and more participants. Geojit BNP Paribas Financial Services and Religare Securities are likely to benefit big time from the move. That should give you an idea who will be hogging the limelight in the stock market this morning.

Rajan favours writing down bad debt
RBI governor Raghuram Rajan has argued that in order to bring global growth to pre-2008 levels, governments across the world may have to write down debts to revive domestic demand. Well, given the negative press governments get for bailing out private companies, a fact Rajan acknowledged that too, such a move may be difficult to come by. But, is this a sign for the domestic banks to follow and start cutting their losses to improve the health of their balance sheets? Only time will tell. For now, banks are busy chasing Vijay Mallya.