Asian Markets Trade Higher Despite A Weak Close On Wall Street; Flat Start On D-Street Today?

[00:00:08]Hello, good morning. You've tuned in to CNBC TV18. You're watching Power Breakfast with me, Mini Mothiwal, along with me is Rachna and Rajani as well.

[00:00:16]Rachna, good morning.

[00:00:17]>> Good morning, Mini. Let's start with the headlines today.

[00:00:20]And US President Donald Trump and Iran's President sign memorandum of understanding to end the war and open the Strait of Hormuz ahead of schedule.

[00:00:29]Both the sides say the deal is in effect and US officials say it includes Iran not developing a nuclear weapon and the reopening of the Strait of Hormuz.

[00:00:40]>> The US Federal Reserve holds rate steady in the first meeting with Kevin Warsh [music] as the chair even as Fed officials hint at a possible rate hike later in the year. Major indices on Wall Street closed about a percent lower or more and markets in Asia open up higher while gift Nifty is indicating a muted start for the Indian market.

[00:01:02]>> Brent trades at $78 per barrel reaching its lowest level since early March as expectations of increased supply continue to weigh on prices after the signing of a peace agreement between US and Iran. Meanwhile, gold holds steady above $4,300 an ounce.

[00:01:21]>> India's largest stock exchange NSE files its IPO DRHP with market regulator SEBI for a 14.89 crore share IPO entirely through an OFS.

[00:01:35]SBI, CPPI, and other shareholders will sell stake while LIC will not participate.

[00:01:44]>> Prime Minister Narendra Modi holds bilateral talks with the US President for >> For the first >> These bilateral talks are for the first time in 16 months that are happening. PM Modi raises the safety of seafarers after three Indian nationals were killed by US strikes. President Trump says trade deal is very close and promises to visit India soon. Trump also says if India is attacked in the future, the US will be there to help.

[00:02:17]All right, let's take a look at the Asian markets this morning. Asia's up struggling of Wall Street's drop. A Nikkei, Hang Seng, Shanghai, Kospi all are in the green as you can see. Nifty implied open however in the red for now.

[00:02:30]This is all against the Wall Street that saw a fall of over a percent across Dow, S&P, and Nasdaq. There you have it on the screen. Gift Nifty now the implied open shows about 30.5 in the negative.

[00:02:43]Nifty futures up 93 but Asia holding up strong for now. But we'll have to see as it goes on. Today is a very important day, Vinnie. We already saw the deal getting signed ahead of the schedule.

[00:02:55]So, we'll have to see how the markets react to that.

[00:02:57]>> Absolutely. We'll have to wait out for how the markets react to that. Do not forget that you know Dow futures now are up and positive on the trading side as well. So, US futures also have moved up.

[00:03:06]India muted start like Rachna mentioned 30 point down tick as of now but on to the updates from the West Asia front the US it's officials US president it's official now US president Donald Trump as well as Iran's president have signed a memorandum of understanding to end the US and Israel's war on Iran. Both sides say that the deal is in effect and US says it includes Iran not developing or buying a nuclear weapon, ending the war on all fronts, and reopening of the Strait of Hormuz. Now, Trump also addressed the media ahead of the deal signing and said that the removal of the nuclear stockpiles from Iran would begin immediately. The US president also clarified on the $300 that Iran was demanding as compensation. Listen it.

[00:03:55]>> Technical discussions on the removal of all stockpiles of enriched materials will begin immediately. We're going to start that immediately.

[00:04:03]And unlike Barack Hussein Obama who sent Iran pallets of cash and any relief they receive under this deal, they'll have to get based on merit and it won't be from us. We don't have to give them anything.

[00:04:17]>> Can you explain though what the difference is between giving Iran US dollars and unfreezing US dollars for them?

[00:04:25]>> Well, the unfreezing is the easy one to answer.

[00:04:29]We have taken a lot of their money.

[00:04:32]And we have their money. We have taken their money. It's not our money.

[00:04:36]It's their money and we froze it at a certain point in time.

[00:04:42]I guess we're going to have to give it back. You know, if we didn't give it back, nobody would ever invest in the dollar again.

[00:04:49]>> All right, that was President Donald Trump signing the deal ahead of the schedule and talking about how Iran has promised them no nuclear weapons. But now let's go to Manisha ma'am to get all the updates of from the from the commodity space. Manisha, take it away.

[00:05:03]>> Thank you so much for that. Well, we have seen an expected reaction coming for commodities. Crude prices for one have extended decline to a 3-month lows right now. Yesterday till evening, it was mixed statements coming in from the US president. But as soon as the markets got to know that an interim deal indeed has been signed and the final official signing will still happen on 19th of June. The street clearly has seen extension of decline coming for the crude oil prices. We are just about holding $78 right now. Yesterday was a 3% of a gain. The markets are trading with nearly 2% of a cut at this point in time. Taking a weekly decline to nearly 15%. So, the agreement is expected to lead to ending the war, reopening the Strait of Hormuz, and waving US sanctions on Iraq oil. A very important statement from IEA says that if agreement is implemented successfully, we could be looking at a 5.05 million barrels per day of a surplus or a glut in 2027.

[00:05:58]So, while the crude prices have declined, we've seen gold and silver prices gain between 2 to 3% in the overnight markets. The US-Iran signing an interim agreement is positive for this one, but one thing that the street will watch out for is the Fed Reserve.

[00:06:10]While they have held the key rate steady, but the FOMC's dot plot shows 25 basis points of an increase by the end of this year. That does not augur well for gold and silver, but that is something that the street will continue to keep an eye on.

[00:06:23]>> Mhm. Thank you so much for that, Manisha. We'll keep an eye out on the world of commodities, precious metals, as well as all prices. But on that note, we're going to slip into a very short break. After the break, we'll come back and tell you how these overnight cues are going to be impacting our Indian markets. Stay tuned.

[00:07:01]Welcome back. You're still tuned in to Power Breakfast. Now, how will overnight cues impact the Indian market? We have our research team joining in with how the trade setup looks like and the stocks that are likely to be in news.

[00:07:13]First up, Hormazd joins in to get us all the market cues we need to watch out for today. Hormazd, good morning.

[00:07:18]>> Good morning, Rachana. And you know, we are heading into another weekly expiry session today, this time for the Sensex contracts. And there's plenty to ponder over. But the GIFT Nifty is indicating a slightly sluggish start. But the oil prices, of course, are where they were yesterday, below the $80 a barrel mark.

[00:07:32]That's the positive. Now, we are coming on the back of a four-day recovery. And from last week's low, the Nifty is up over 1,000 points. And that's where the good part ends, though. A couple of things that may put a spanner today to this recovery. First is the Fed rate decision post which the US market sold off. Yes. The second one being the fact that today is the Sensex weekly expiry and of course the fact that the dollar is stronger and the bond yields also rose in the US markets overnight. So we need to factor all of that in. We need to watch out for Reliance Industries as well. That's the one stock to watch out for over the next couple of days ahead of his AGM tomorrow. So that was one stock that also led the Nifty up move yesterday in the last 30 minutes and we of course react to the NSE DRHP that was filed overnight.

[00:08:12]For the index well, 24,000 is the important level. The bulls would hope that that sustains even if we manage to fall a little from the higher levels.

[00:08:19]The next major resistance though, first of course 24,150 and then we go to the 100-day moving average which is at 24,250 and the 23,900 24,000 zone should become a strong support zone. For the Nifty Bank, the range remains the same, the same 1,000 point range, 57,000 to 58,000. That remains the one to watch out for and of course 57,000 being the support on the downside. But for now, the Gift Nifty is indicating a slightly sluggish start. It's a weekly expiry, so expect some volatility but the bulls would hope that the key levels hold on the downside.

[00:08:48]>> Absolutely. Bulls are hoping for holding that key levels. We'll keep an eye on that through the day as well. Thanks so much for that, Urmas. Let's move on and go across to Riya who's here to take us through the important stocks to keep on your radar this morning. Good morning, Riya.

[00:09:00]>> Well, good morning. Let's start off with Shyam Metallics first. The company has set a target for a 2031 to achieve a revenue of 42,647 crores which is 2.3 times their FY26 revenue. Even for the EBITDA, they have a target of achieving around 6,236 crores in EBITDA. This is 2.7 times the current FY26 EBITDA, so positive outlook there and in fact they have also set out a capex target. They are expecting to deploy around 1.1 billion dollars in capex over the next 4 to 5 years. And moving on to Bosch Home Comfort, the parent company is likely to sell up to 7.9% stake in the company via an OFS on uh 18th on the 18th and 19th of June with a floor price of rupees 1,150 per share. So, that will be something that will be closely tracked. Uh moving on to Anthem Biosciences, which will be in focus as the promoter will be selling uh nearly 3% stake in the company uh for uh nearly 1,300 crore rupees via a block deal. Uh the floor price is will be set at uh rupees 715 per share, which is uh nearly a 7% discount to yesterday's closing price. Uh DOMS will also be in focus today as yesterday in a block deal the promoter uh Fila has sold around 7% stake in the company for 900 935 crore rupees uh with the price at uh 2,200 uh per share. Uh and on this front SBI Mutual Fund and Axis Mutual Fund were were the buyers. Uh Corona Remedies also on the in focus on the back of a block deal. Uh CPI Investments has offloaded roughly 749 crores worth of stake in the company at a price of 1,730 per share. And HDFC uh Mutual Fund as well as ADIA were among the buyers on this deal. Uh Lupin will also be in focus today as they have launched a Derby, which is a generic drug in uh the US with a 180-day exclusivity uh period.

[00:10:48]Uh and uh the estimated annual sales for this drug in the US are at around 53.5 million dollars.

[00:10:55]>> All right. Thank you so much, uh Ria.

[00:10:57]Now, we go to Sudarshan to get all the cues from the F&O space. Sudarshan, good morning.

[00:11:01]>> Good morning, Rachna. So, yesterday we managed to hold on to levels about 24,000.

[00:11:06]FI's turning buyers and with an improvement in macro data indicates you that we might continue to see an up move in the market and Nifty in all probability over the next few days may touch or may cross the levels of 24,500.

[00:11:20]What's working for the market? Your crude continues to remain the levels below 79. Rupee continues to strengthen against US dollar. And volatility index continues to hold the levels above 40.

[00:11:32]Now, coming to the FI's data in the index futures yesterday, they have bought stock futures. The selling number was slightly 400 crore just. And if you come to the index longs and short data, on the long side, they have added the positions of 700 contacts. But good part is they continue to reduce the positions on the short side. Yesterday also they have reduced positions by 4,200 contacts. Now, longs exposure has increased to 13% on the short side exposure 87%. Come to the option set on the pool side 24,000 was the most active put options where we have seen a maximum increase in the open interest, but at the same time premium for this option two has come down. While on the call side 24,100 and 24,300 were the most active ones. So, in the immediate term the range for Nifty would be 24,000 to 24,300. So, support I have taken 23,900.

[00:12:22]First resistance will be 24,100. The next resistance comes around 100 DMA of 24,300. One stock remains in the band that is Gains Technology. Some of the stocks, OMCs will continue to be continue to be in the focus because of the sharp fall in the crude prices that we have seen over the last few days.

[00:12:37]Samudera Mudas has seen fresh shots yesterday because of guidance cut by BMW and Trend has seen short covering.

[00:12:44]>> Okay, Sudarshan, thank you so much for that, but let's move on and talk about the Fed rate decision, right? Fed has kept the rates unchanged under Kevin Walsh's first meeting as a Fed chair.

[00:12:54]Now, Kevin Walsh refused to give the forward guidance in his statement. Steve Liesman has more details on this one.

[00:13:01]Let's go cross to him.

[00:13:04]>> Hawkish message on rates reflecting that he inherited an inflation problem saying the committee is strongly committed to dealing with that inflation problem.

[00:13:12]>> We recognize that inflation has been running well ahead of the Fed's long-stated inflation goal of 2%.

[00:13:20]That's been going on for more than 5 years.

[00:13:23]I am pleased to report that members of the FOMC are unambiguous and unanimous. This committee will deliver price stability.

[00:13:34]>> Warsh clearly has embraced at least for now the existing hawkish bent of the committee where nine officials now project at least one rate hike this year and 62 or more. Only eight expect to hold rate steady and only one cut is projected. And markets have taken Warsh and the Fed seriously. The two-year sold off hard and the first hike is now seen with a 66% probability to happen in September. It had been December. A second hike now has a 55% probability for January and there wasn't one priced in before the meeting. Warsh also pledged a rethink of how the Fed does business appointing task forces to review Fed communications, balance sheet policy, data sources, productivity and jobs, and the inflation framework. Warsh stuck to his long-standing view that AI and productivity will be transformative for the US economy, but it seemed as if any incorporation of that into policy would have to await dealing with the current inflation problem and hitting the 2% target.

[00:14:29]>> All right, Kevin Warsh is first. As the Fed chair, he also explained why the Fed statement had been shortened and made simpler. Here's what he said. Listen in.

[00:14:39]>> a difference in today's policy statement.

[00:14:42]It's a bit shorter, a bit simpler, and it dispenses with some older language.

[00:14:47]That statement just gives you the facts as best we can judge it.

[00:14:52]Absent also is so-called forward guidance, which we agreed was not well suited to the current policy conjuncture. You also received the usual summary of economic projections.

[00:15:04]It's been the practice of this committee for participants to submit these projections, and I have encouraged my colleagues to continue to do so.

[00:15:13]I, however, refrained from offering any projections of my own consistent with my long-held views on the SEP, at least as currently structured.

[00:15:24]>> And consequently, when you look at it, US markets ended lower on Wednesday as investors grew uncertain over the path of monetary policy. Several Federal Reserve officials indicated that there could be a rate hike this year to tackle inflation. Dow Jones fell uh more than 500 points. We saw S&P 500 also, as well as Nasdaq, close in the red, both closing uh with cuts of uh more than a percent. While, obviously, this morning I've seen the futures rise, but at least the close overnight came in in the red.

[00:15:54]>> All right, Vinny. Thank you so much.

[00:15:55]But, now it's time again to slip into a short break. Up next, we get you all the cues from the world of artificial intelligence. So, stay tuned.

[00:16:19]>> Welcome back to Breakfast on CNBC TV18.

[00:16:21]Now, getting you the latest updates in the world of tech and AI in our special segment AI Pulse. We have Rachna to take us through all these details. Rachna, over to you.

[00:16:28]>> Well, they first start at the G7 at a closed-door lunch in Evian Wednesday.

[00:16:32]Anthropic's Dario Amodei and Google DeepMind's Demis Hassabis called for a US-led coalition to set the rules for AI. And Canada's Mark Carney backed it.

[00:16:41]Amodei went further, saying that a coalition should structure frontier model access and chip trade in a way that it shuts China out. OpenAI's Sam Altman pushed instead for neutral testing standards. Now, this is all according to CNBC. There's also Sarvam's Pratyush Kumar, who is the only Indian voice in that room. And that pitch also met pushback because Emmanuel Macron warned that if Washington can turn off the switch overnight on AI, it hits customers and the AI firms themselves.

[00:17:10]Prime Minister Narendra Modi also echoed it, per the FT, saying democratic nations need unfettered access to protect critical infrastructure. Now, the G7 is weighing a trusted partners scheme to root around US curbs. The backdrop being Anthropic's Claude 5 and Methos 5 pulled worldwide that we saw last week, which brings it home. Those curbs have exposed India's sovereign AI gap. India is Anthropic's second largest market, so is ChatGPT's, and 41% of Indian workers now use AI nearly every day ahead of China and the US. But, that lays bare the dependence. No domestic frontier chips, no frontier scale model, lagging data centers, and the call now is the call now for the government is to spend big on all of it. On infrastructure, the money keeps coming.

[00:17:54]Canada's CPP Investments has committed up to $741 million to data center operator Control S, $423 million for an 8.2% stake, and $317 million for a hyperscale joint venture. It follows AirTrunk's $30 million pledge and the Meta Reliance deal in Gujarat that we saw last week. And finally, Amazon is owning up to its lag. AI chief Peter DeSantis told CNBC that it hopes to compete with OpenAI and Anthropic at the frontier in the coming year. Its latest model, Noah, launched in December and now claims around 50,000 customers, but there's still a long way to go.

[00:18:30]That's all we have for now from the world of artificial intelligence, but we'll get you more updates through the day.

[00:18:35]>> Thank you so much for that, Rachna. But, with that, we're absolutely out of time on this edition of Power Breakfast.

[00:18:41]Thank you so much for tuning in. Up next, it's our morning call.