Tag: US stock

SGX Nifty up 45 points; here’s what changed for market while you were sleeping, BFSI News, ET BFSI

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Domestic indices look set to open on a positive note on Wednesday. But indecisiveness among market participants at highs may keep any such gains capped. Asian markets are largely mixed as the dollar hovered near a week’s high level. US stocks closed mostly lower in overnight trade. Here’s breaking down the pre-market actions:

STATE OF THE MARKETS

SGX Nifty signals a positive start
Nifty futures on Singapore Exchange traded 46.5 points, or 0.27 per cent, higher at 17,425.50, signaling that Dalal Street was headed for a positive start on Wednesday.

  • Tech View: Nifty50 on Tuesday snapped a three-day winning run and formed an indecisive candle on the daily scale, the second time in a row, suggesting a halt in the positive momentum.
  • India VIX: The fear gauge gained eased over a per cent to 14.90 level on Tuesday over its close at 15.10 on Monday.

Asian stocks mixed in early trade
Asian markets opened mixed on Wednesday as investors sought to lock in profits after recent rallies and US Stock settled mixed after an extended weekend. MSCI’s broadest index of Asia-Pacific shares outside Japan was down by 0.11 per cent.

  • Japan’s Nikkei gained 0.45%
  • Korea’s Kospi shed 0.17%
  • Australia’s ASX 200 tanked 0.31%
  • China’s Shanghai edged up 0.02%
  • Hong Kong’s Hang Seng added 0.29%

US stocks closed mostly lower
The S&P500 index closed lower while the Nasdaq Composite edged higher to a record high, as investors balanced worries about the slowing pace of economic recovery with expectations that the Federal Reserve will maintain its accommodative monetary policy.

  • Dow Jones declined 0.76% to 35,100
  • S&P 500 shed 0.34% to 4,520.03
  • Nasdaq added 0.07% to 15,374.33

Dollar near one-week high
The dollar hovered near a one-week peak on Wednesday against major peers, buoyed by higher Treasury yields and a weaker euro amid caution before a European Central Bank policy decision.

  • Dollar index held at 92.553
  • Euro flat at $1.1843
  • Pound slipped to $1.3783
  • Yen declined to 110.28 per dollar
  • Yuan depreciated to 6.463 against the greenback

FPIs sell shares worth Rs 145 crore
Net-net, foreign portfolio investors (FPIs) turned sellers of domestic stocks to the tune of Rs 145.45 crore, data available with NSE suggested. DIIs were net sellers of Rs 136.57 crore worth equities, data suggests.

MONEY MARKETS
Rupee: The rupee plunged by 32 paise to close at a more than one-week low of 73.42 against the US currency on Tuesday due to dollar buying by corporates and importers and the greenback’s gain in overseas markets.

10-year bond: India 10-year bond yield jumped 0.36 per cent to 6.19 after trading in 6.17 – 6.20 range.

Call rates: The overnight call money rate weighted average stood at 3.15 per cent on Tuesday, according to RBI data. It moved in a range of 1.95-3.40 per cent.

DATA/EVENTS TO WATCH

  • JP Current Account JUL (5:20 am)
  • JP GDP Growth Rate QoQ Final Q2 (5:20 am)
  • JP GDP Price Index YoY Final Q2 (5:20 am)
  • AU RBA Chart Pack (7 am)
  • AU RBA Debelle Speech (1:40 pm)
  • US MBA 30-Year Mortgage Rate 03/SEP (4:30 pm)
  • US MBA Mortgage Applications 03/SEP (4:30 pm)
  • US Redbook YoY 04/SEP (6:25 pm)
  • US 10-Year Note Auction (10:30 pm)

MACROS

DoT moots 4-yr moratorium on AGR, spectrum payments
The telecom department (DoT) has proposed a four-year moratorium on adjusted gross revenue (AGR) and spectrum payments apart from a reduction in spectrum usage charge (SUC) prospectively, among measures to improve the health of the debt-laden sector and retain a three-private player market.

Sebi wants T+1 settlement for trades
The Securities and Exchange Board of India has proposed a ‘trade-plus-one’ (T+1) settlement cycle from January 1, where the trades will get settled the day after the transaction. Initially, exchanges can pick stocks where they want to offer the next-day settlement. Under T+1, the buyer would get shares in the demat account and the seller the sale proceeds the day after the trade.

Cheaper smartphones could fire up Jio ARPU
After a sluggish movement since March, the stock of Reliance Industries (RIL) has gained nearly 18% within a month ahead of the company’s launch of affordable smartphones on September 10. Nearly a quarter of the total smartphones are priced below Rs 7,500 per unit. This may help the company to reach the 500 million subscriber base by FY24 and improve ARPU by 10-15%. India’s largest company by revenue and market capitalisation is slated to launch an entry level smartphone priced between Rs 5,000 and Rs 7,500 in partnership with Google.

Probe into PSB frauds on hold
Investigations into alleged fraud caused to public sector banks totalling over Rs 50,000 crore have been put in abeyance by the Central Bureau of Investigation (CBI) for want of general consent from states. Of these, complaints over Rs 20,000 crore are from Maharashtra alone, ET reported. Claiming vendetta by the Centre, eight states ruled by non-NDA parties including Maharashtra, West Bengal, Chhattisgarh, Mizoram, Kerala, Rajasthan and Punjab in the last one year have withdrawn general consent accorded to the CBI under the Delhi Special Police Establishment Act to probe cases in their jurisdictions.

Rocky start for Bitcoin as legal tender
El Salvador faced a rocky transition in its adoption of Bitcoin as legal tender on Tuesday. The government’s app for facilitating transactions — its “digital wallet” — went offline temporarily, protesters took to the streets of the capital to denounce the move, and the price of Bitcoin dropped sharply, demonstrating the volatility of the cryptocurrency market. The country is the first to use Bitcoin as an official currency, encouraging businesses and citizens to use it in everyday transactions, and authorities struggled to smooth out glitches in the new system.



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How Reddit revolt propelled this stock to unbelievable levels, BFSI News, ET BFSI

Personal Finance

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NEW YORK: There’s some irony in the fact that Reddit, an online chat community full of gamers, has propelled GameStop Corp. to unbelievable levels. After all, video game fans have loved to hate the struggling retailer for decades.

Over the past week, a collective of individual traders on Reddit’s r/WallStreetBets community sent GameStop stock to astronomical heights in an experiment to stick it to hedge funds, which had sold the stock short. At the beginning of this year, GameStop was trading at $17. By Wednesday afternoon, it was over $340, valuing the unprofitable company at more than $25 billion.

GameStop’s resuscitation may seem like it should be inherently good news for video game fans. But unlike the beloved retailer Toys R Us Inc., GameStop was never very popular among gamers. The Reddit community choosing GameStop as the stock to pump may have been one giant practical joke.

“It’s like in movies when the bullies vote for the nerd to be prom queen just to prank her,” said Andy Cortez, a host and producer for the video game YouTube channel Kinda Funny.

Gamers have a long list of complaints about Grapevine, Texas-based GameStop, from the way they treat employees to their pushy and controversial sales tactics.

Over the years, many gamers begrudgingly shopped at GameStop only because they had little choice. The store made it easy to trade in old games for money or to be used toward other purchases, which cash-strapped fans could appreciate. But the values became a punchline. A brand new game, which cost $60, might fetch $30 at your local GameStop. Older games would return a few bucks at most. Social media is full of jokes about how you can trade GameStop’s stock back to the retailer for a fraction of the price.

The company also became known for questionable practices such as selling opened copies of games as if they were new. Sometimes, customers would take home a “new” game only to discover that someone else’s save file was already on the cartridge.

Many video game fans grew tired of the way GameStop treated staff and the way those employees had to act with customers. Worker performance was tied to the number of game pre-orders and rewards cards they sold, which led to constant hawking. It was impossible to call or visit a GameStop store without being pushed to pre-order whatever games were coming out next.

In 2017, GameStop made headlines for its controversial Circle of Life program, which essentially punished employees for selling new instead of pre-owned games. As a result, some staff said they would lie to customers about whether they had new copies in stock.

Video game publishers have little love for GameStop, either. When customers bought pre-owned games, the people who actually made those games didn’t see a dime, which led companies like Electronic Arts Inc. to pioneer strategies to get people to buy new copies. The publisher decided to put a one-time-use code in each copy of some games, rewarding whoever got to it first — and punishing the secondhand market.

So, for many gamers, seeing GameStop as the butt of a joke on Wall Street is a dose of schadenfreude.

Such widespread disdain for the retailer from all corners of the gaming industry has probably helped fuel the frenzy behind GameStop on Reddit.

The stock surge makes no sense. GameStop has struggled as many former customers switched to buying digital copies directly on their consoles. The coronavirus pandemic, which has kept most people out of the malls where many GameStops operate, exacerbated the company’s decline, and it reported sales fell 30% in the quarter ended October 31.

The r/WallStreetBets campaign shows that most investors driving up the shares are motivated by a populist desire to take down hedge funds with big short positions. But the whole play has also been egged on by internet jokes, or memes. And to gamers, there are few bigger memes than GameStop.

“If this was just Google or something, no one would care that much,” said Allen, a r/WallStreetBets poster who asked only to be identified by his first name, in a phone interview. “But the fact that it’s GameStop, that we’re going to take on a hedge fund because they shorted GameStop, it’s funny. There are great memes to be made out of it.”

Allen said he now has over 1,000 shares in the retailer, which he bought a few months ago for less than $20. He said he sees this as an opportunity for GameStop to become a better corporation without the pressure from Wall Street short sellers. “If this company is going to go out of business, they deserve to go out of business on their own terms,” Allen said.



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