Asian Markets Trade Mixed Despite An Overnight Rally On Wall Street; Weak Start On D-Street?

[00:00:08]Hello, good morning. You tuned in to power breakfast on CNB C TV18. I'm Mini Mutuwala. With me is my colleague Rachna [music] Dhanrajani as well. Uh Rachna, good morning to you, but let's get started with the top headlines for today. And first up, obviously talking about the top headline, you have a US Vice President J.D. Vance who defends the deal between Washington and Iran amid criticism from Israel. Now, a 60-day negotiation period has begun for both sides. US and CENTCOM says that it has lifted a blockade on all maritime traffic in Iranian ports. International mediators will convene in Switzerland today to formalize the US-Iran ceasefire co-hosted by Pakistan and Qatar.

[00:00:52]>> Major indices on Wall Street closed higher as chip and tech names fuel a comeback following the Fed-led sell-off.

[00:00:58]Meanwhile, markets in the Asia-Pacific region open higher. Taiwan, China, and Hong Kong remain shut today on account of the Dragon Boat Festival. However, the GIFT Nifty is indicating a gap-down start for the Indian market.

[00:01:11]>> Shares of Accenture see a sharp fall after Q3 revenue misses estimates. The company's guidance has also been narrowed at the upper end, and the company's weak outlook has rattled Indian IT companies. Infosys and Wipro ADR also slide on the news.

[00:01:29]>> Brent crude oil was around $79 per barrel as investors welcomed improving shipping conditions in the Strait of Hormuz following the implementation of the US-Iran [music] interim peace agreement. Meanwhile, gold slips below $4,200 an ounce following hawkish signals from the Fed.

[00:01:48]>> Reliance's 49th annual general meeting to take place today at 2:00 p.m. Key expectations for the next year include a ramp-up, a new energy segment, [music] and the street is hopeful of a Geo IPO announcement.

[00:02:10]>> Okay, let's take a quick look across Asia, and it's a very thin session today. Much of Asia is out for the Dragon Boat Festival. China, Hong Kong, and Taiwan all closed, so liquidity and cues are light today. That leaves us with Japan and Korea. The standout is of course Kospi here above 9,000 for the first time ever, and no surprises there.

[00:02:27]We are in a worldwide memory boom, and two of the three memory makers are based out of Korea, that's Samsung and SK Hynix. Then there's Japan's Nikkei, which is also a near record high around 70 71,000. Uh though watch for profit taking after that run. Wall Street will also be shut today for the Juneteenth, and much of Asia, like I said. And uh but the ones that are open are much to watch out for as they're hovering near record highs. In India, too, we saw a five-day streak with Nifty gaining but this week. Uh we uh we see now the Nifty implied open uh is showing a gap-down start of 200 points uh down, as we can see. But yesterday also we saw similar cues. It was all throughout the day red, green, red, green, but it ended up being in the green. So, will Nifty hold the sixth day streak is what we'll watch out for today?

[00:03:14]>> Absolutely, Rachna. How will we move back to the green will be key to watch out for. But on to the updates from West Asia, right? US Vice President J.D.

[00:03:21]Vance has uh defended the MOU with the on amid criticism from US lawmakers and Israeli officials warning the top US ally that you can't kill your way out of the security problems. The 14-point agreement extends a ceasefire announced in April by another 60 days, including Lebanon, to allow the two sides to negotiate uh a final truce. Now, the two parties will uh meet in Geneva, Switzerland, where talks will be co-hosted by Pakistan and Qatar. Today's agenda prioritizes the immediate implementation of agreements 14 core points that they have highlighted.

[00:04:02]Now, the White House has said that the US Vice President will not be attending the talks in Geneva today. Listen in the comments on critics and the peace day.

[00:04:16]>> If I was in the cabinet of the Israeli government, I might not be attacking the only powerful ally that I have anywhere left in the entire world. And the second message I would give to some of those cabinet members, Bibi, to his credit, has not gone down this path, but to some of these cabinet members in Israel who are attacking the president of the United States, the other thing that I would say is that over the last 3 months, >> [clears throat] >> 2/3 of the defensive weapons that have protected your homeland have been built by American hands and paid for by American tax dollars.

[00:04:49]>> That's US Vice President J.D. Vance. In the meantime, the US military has lifted its blockade of maritime traffic entering and exiting Iranian ports and coastal areas, adding that US naval ships would remain in the general area.

[00:05:03]Manisha Gupta joins us now with all the updates from the commodity space. Good morning, Manisha.

[00:05:08]>> Morning and thank you for that. Really, as we have seen a very sharp decline coming in for the crude oil prices given the fact that we are now looking at the US-Iran agreement leading to signing. Uh ships movement through the Strait of Hormuz. There also are names of ships that seem to be moving out of Iran as well. The US Central Command has lifted restrictions on traffic to and from Iran ports as well. The standard tankers have begun to exit the strait. More importantly, you have statements from UAE and Kuwait as well saying that they will now start to begin increasing production. So, we're looking at a kind of a situation by the second half or the last quarter of this year and most part of 2027 as well is what the markets are working with. But, it's not just the crude oil prices. You have seen a big reaction come in for the metal place as well. So, while the US Iran agreement has led to uh ships moving through Strait of Hormuz, it also is about the hawkish signals from the US Fed leading to a very strong rise in dollar index.

[00:06:01]Now, that seems to be weighing on metals. You have gold prices which fell 1 and 1/2% overnight. Copper fell 2% Silver prices now are down by 4% in this week, while aluminum has declined 3% in this week as well. So, metal prices sharply down, and that exactly is what we are looking at in terms of crude as well. A sharp sell-off across commodities.

[00:06:22]>> Okay. Uh sharp sell-off across commodities is what we're keeping an eye out on this morning. But, Manisha, thank you so much for that. On that note, we're going to slip into a very short break. Up next, we'll tell you how the overnight cues are going to be impacting our Indian markets. Stay tuned in.

[00:06:55]Welcome back. You're watching 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 today.

[00:07:05]First up, Hormazd joins in to get to get us all the market cues we need to watch out for today. Good morning, Hormazd.

[00:07:11]>> Good morning, Rachna. You know, on Fridays we generally look forward to the weekend, but today is a very important and also to say a decisive / are ya par day for the Indian markets, right? The GIFT Nifty is indicating a 200-point gap down, and we know exactly why. And that's because of the ADRs overnight. Uh Infosys and Wipro, both of them ending with losses of anywhere between 4 to 10% in overnight trade, and that is going to have an impact on the Indian markets today. And if IT is going to put the pressure on on the markets, the the two names that could potentially offset that pressure, the most important one is Reliance Industries. That is going to be the stock to watch out for as we head into the AGM today. That's going to be the big factor. And then, of course, the the fact that the banks have been the ones that have been outperforming. They've been doing the heavy lifting. The Nifty Bank is up 3,000 points almost in the last six trading sessions. That's going to be the factor to watch out for to offset any potential pressure that you see because of the IT names. Of course, IT continues to be the one because Accenture was down 18% overnight, and you saw the impact on the ADRs as well.

[00:08:16]And the for the index, well, 24,000 remains the most important level on the downside that the bulls will be looking to defend. Well, as of now, it looks like we are most likely to open around those levels immediately at the start of the trading session. On the upside is the 100-day moving average of around 24,250 is where any for for the first level of resistance that comes in. But today is going to be defending the downsides more than protecting the upsides. That's going to be the key to watch. The Nifty Bank, though, that has a stronger setup compared to the Nifty also simply because of the fact that it is now at the higher end of the range of 57,000 to 58,000. That's going to be the one that the bulls would still continue to hope that it does the heavy lifting to offset any pressure that the IT stocks would likely to put. For now, the GIFT Nifty is indicating a gap down.

[00:09:01]Oil prices falling is a positive, but today the focus is going to be on IT versus banks. And the key, the ace in the pack, could be Reliance Industries.

[00:09:10]>> Mhm, absolutely, Urvi. Thanks so much for that. Arya will keep an eye out for that. And Nifty Bank putting their hands up again, right, Urvi? So, we'll watch out for that. But on that note, let's move on and go across to Riya, who's here to tell us the stocks that you should be keeping on your radar. Good morning.

[00:09:25]>> Well, good morning. Let's start off with Amber Enterprises today, which will be in focus as the company has entered manufacturing contract with Oppo Mobiles. And under this collaboration, Amber Enterprises or be manufacturing the mobile phones for both of these brands. Bosch Home Comfort will also be in focus as the promoter has chosen to exercise the green shoe option in their OFS. The oversubscription is 0.75% of the equity in addition to the base offer of a 7.22% for Brigade Enterprises. The company has announced that the environmental clearance for the residential project called Brigade Morgan Heights in Chennai has been revoked by the state level environment impact assessment authority.

[00:10:04]Although the company has said this is not legally sustainable and they have filed an appeal on this matter. So those developments will be closely tracked.

[00:10:12]Bharat Forge will also be in focus today as Kalyani Strategic Systems as well as AM General have signed a strategic partnership to offer a distinct mounted artillery gun system for world armies.

[00:10:23]And in fact, AM General has also offered a proposal to participate in the US Army's MTC program, which is the mobile tactical cannon program. Moving on to Endurance Technologies which will be in focus as the company has announced that after starting the commercial production for their 2 W 2 W battery packs, they have also planned a capex for their 4 W battery packs. The capex will be around 62 crore rupees and this will be completed by quarter three of FY27 as per the company. Moving on to Diamond Power Infra, the board has given its nod for a 2,000 crore QIP versus the earlier 1,000 crore that was announced earlier to meet MPS norms. And lastly, keep an eye out on TruAlt Bio Energy as well company has received a 150 crore government support for its 10 crore liter sustainable aviation fuel project.

[00:11:12]>> [clears throat] >> All right, here. Thank you so much.

[00:11:13]Quite a long list of stocks in news today for our viewers to watch out for.

[00:11:16]But finally, let's get Sudarshan for the cues from the F&O space. Sudarshan, good morning.

[00:11:22]>> Good morning, Dasna. So, will it be a good Friday or will it be a Friday? Now, it depends on the big cues that we have today. First, we have Reliance AGM.

[00:11:31]Second, financials remain on a very strong wicket, but the one segment that's going to drag the market is the IT after Accenture has missed the estimates and also not only on the earnings front, but also on the guidance front. But financials and Reliance AGM will be the key to watch. Now, coming to FIs, they have covered shorts for the seventh straight day and it's very positive and the another cue that's positive for us is Brent crude. Crude continues to remain the level below $80 per barrel. Now, yesterday FIs in India next futures, they have bought more than 500 crore. In the stock futures, they have sold almost 1,700 crore, but good part is they have added long positions and reduced short positions. Added more than 1,000 contacts, reduced by more than 2,200 contacts. Longs exposure remains around 13% on the short side, exposure is 87%. On the option data, the range that market is working with is from 24,000 to 24,500. So, even if GIFT Nifty is indicating a gap down start, might open around 24,000, but in all probability, Nifty would like to protect the levels above 24,000 thousand and tries to move ahead around 24,100 to 24,200. So, first support 23,830 if Nifty fails to hold 24,000 because that's your 20 DMA. First resistance will be 24,200, that's your 100 DMA and next resistance comes around 24,500. One stock remains in the band, that is KEC International. Some of the stocks that will be in the focus IT pack will be in the focus after Accenture earnings.

[00:12:58]Muthoot Finance because there's sharp drop in gold prices, so keep an eye on that. And PG Electroplast over the last few days has been seeing fresh longs.

[00:13:05]>> Okay, Sudarshan, thank you so much for that. I hope it turns out to be a Friday here today as well, but thanks so much for that, too. We'll keep an eye out on those levels for the Nifty. But let's move on and talk about the US markets quickly, right? Wall Street rebounded on Thursday, a day after Federal Reserve officials flagged the possibility of rate hikes this year, sparking the sell-off in uh the equities. Now, investors return to risk assets with NASDAQ jumping nearly 2% while the S&P 500 as well as the Dow Jones also ended with gains in the trading session. So, yes, that's what we have in terms of the US markets structure.

[00:13:40]>> Yes, and that it's a holiday in the US today.

[00:13:43]>> They are enjoying the long weekend.

[00:13:45]>> Definitely. Uh let's slip into a short break now. Up next, we get you the cues from the world of artificial intelligence, so stay tuned.

[00:14:22]>> Welcome back to Power Breakfast on CNBC-TV18.

[00:14:25]>> Now, Reliance is set to announce its road map for the next 12 months at the 49th annual general meeting. We have Sonal joining us to take us through the details. What are you watching out for?

[00:14:34]Good morning, Sonal.

[00:14:38]>> Good morning, Vinnie. Well, uh you know, let's first talk about what the road ahead is for FY27. The company had announced a large capex, and a lot of it is expected to ramp up in the FY27 itself. The solar and battery manufacturing plus generation that the company had spoken about, electrolyzer giga factory for the new energy ecosystem. So, new energy could continue to be the focal point in the AGM today as well. And they are the notable growth areas for the company going forward as well. Now, let's talk about what they did do in FY26. Huge capex, a 10% increase on a YOY basis. The consolidated capex came in at 1.44 trillion. Uh if we talk about the retail and digital business, the capex there was 54,200 crore rupees. That number would decline on a 25% basis on a YOY basis, but all the chemicals capex rose around 22% YOY because there were some petchem projects or expansions that came online as well.

[00:15:31]But let's talk about the other segment where reported capex was up 2.1 times on a YOY basis at 52,500 crore rupees. A big chunk of that was new energy business which was around 30,000 crore rupees. So cumulative capex in new energy so far has been 70,000 crore rupees out of which they have spent 40,000 crore rupees till FY25 itself. So new energy will be the focal point. We investors will be now eyeing new business insights because they have spoken about progress there. CLSA also said that they will be watching any further details on new energy BESS or battery energy storage system production will start in 2026. The big one of course has to be the Jio IPO hope because in quarter four Mukesh Ambani had indicated they are advancing steadily towards the listing of Jio platforms. So that is an important commentary we'll be watching out for.

[00:16:22]Uh let's talk about retail's next wave as well because Kotak analyzed last decade of capex from Reliance. They said they spent 1.9 trillion only in the retail business in the last decade, out of which 84% was spent just in the past 5 years. So retail has been a big growth driver for the company. If we talk about future for oil to chemicals business, exploration and production as well, uh the capex however there slowed down. Uh the share of total capex also came down to 21% in these two segments. The other business levers will be increased focus on diversification which the company has been very vocal about. Of the total 1.7 trillion capex incurred towards other businesses, 60% has been incurred just in the last 3 years. So capex continues to be the growth driver. New energy, Jio, these could be the other factors that we will be watching out very closely. Okay, Sonal, thank you so much for that. Important factors to watch out for under Reliance obviously will be in focus today as well. I so keep an eye out on the AGM today starting at 2:00 p.m.

[00:17:25]Okay, now getting you the latest updates in the world of tech and AI in a special segment AI pulse. Rachna moves to the wall to take us through those details.

[00:17:31]Rachna, over to you.

[00:17:32]>> Well, first up is Accenture that logged its worst single-day fall on record sinking as much as 18% to its lowest since 2017 after cutting its full-year revenue growth outlook to 3 4 3 to 4% from 3 to 5% CEO Julie Sweet pointed to $400 hit to Middle East sales from the Iran conflict plus cautious client spending and AI reshaping demand. The read-through hit Indian IT. Infosys and Wipro areas fell 7 to 8% in US trade after the results and Indian IT counters are in focus today when they open this morning. To the chip wars then and Intel jumped around a 10% after President Donald Trump said on Truth Social that Apple has agreed to design and build chips with Intel in the US. The caveat, neither company has confirmed it. Intel would not comment on it and Apple did not respond and even if it holds, analysts say that it would not displace TSMC for Apple's advanced silicon.

[00:18:25]Another Nvidia challenger is stepping up. Amazon's AI chief told Bloomberg that AWS is in talks to sell its training chips directly to other companies for their own data centers, a shift from renting them out through its cloud. Training already carries around $225 billion in commitments from OpenAI, Anthropic, and Uber. On infrastructure then, Meta has contracted to buy around 1.6 gigawatts of computing capacity from Crusoe at two US sites tied to former Stargate project Oracle and OpenAI have step step back from. And we end in India. The Telegram block here has triggered a record rush to VPNs with downloads up 49% in a single day, the biggest spike since early 2025. Now, the government cut access until June 22 over exam fraud fears tied to the NEET retest. Telegram has challenged the order in the Delhi High Court, which rules this morning, but here's a plot twist. Telegram's own users in India actually rose 17% the day that ban hit from the government. So, we'll have to see what happens today when the Delhi High Court rules, and for the students who are appearing for the retest of the medical examination.

[00:19:31]>> Okay, Rachna. Thank you so much for that. But, with that we're absolutely out of time on this edition of Power Breakfast. Nifty implied open is still indicating a red and a captain start for the Indian market. So, watch out for that. But, up next we have Anuj Malika to take you through all that market action.