ET NEWS

Oil prices cooled slightly on Tuesday after their skyrocketing rally, with Brent crude futures dropping over 1% to near the $111 per barrel mark following a report that US President Donald Trump is willing to end the war with Iran, even if the Strait of Hormuz remains largely closed.Trump told his aides that he is willing to end the war even if a large part of the operations through the Strait of Hormuz remains set to open at a later date, the Wall Street Journal ‌reported on Monday, citing administration officials.Brent crude futures fell to $111 per barrel, a day after reaching their highest levels since March 19. WTI Crude, meanwhile, dropped to $102 per barrel today, as seen at around 8 am IST. This led to a spike in GIFT Nifty, as investors hoped for some relief on Dalal Street after the incessant selloff.All is well?Despite the optimism, some caution is warranted. The war, which began earlier this month with US-Israeli strikes killing Iran’s former supreme leader Ayatollah Ali Khammenei and resulting in massive retaliation from Tehran, has spread across the Middle East. Yemeni Houthis launched their first attacks on ⁠Israel over ‌the weekend, widening the ongoing war and adding to inflation woes. Trump warned the US would obliterate Iran's energy plants and oil wells if it does not open the Strait of Hormuz. This comes as Iran attacked and set ablaze a fully loaded crude oil tanker off Dubai on Monday.Thousands of soldiers from the US Army's elite 82nd Airborne Division have started arriving in the Middle East, Reuters reported, adding that this is part of a reinforcement that would expand Trump's options to include the deployment of forces inside Iranian territory, even as he pursues talks with Tehran.White House press secretary Karoline Leavitt later said Trump wanted to reach a deal with Tehran before an April 6 deadline he set last week after extending an earlier deadline he had set for Iran to open the Strait of Hormuz. Leavitt said US’ talks with Iran were progressing, adding that what Tehran says publicly differs from what it tells US officials in private.What lies ahead?Macquarie has warned that crude prices could surge to an unprecedented $200 a barrel if the Iran conflict drags into mid-year and keeps the vital Strait of Hormuz shut. “If the strait were to stay closed for an extended period, prices would need to move high enough to destroy a historically large amount of global oil demand,” the Macquarie analysts said in the March 27 report, as reported by Bloomberg. “The timing of the re-opening of the straits, and physical damage to energy infrastructure, is the main determinant of the longer-term impact on commodities,” it added.Ambit Institutional Equities, in its report, said that even if geopolitical tensions cool off, oil prices will remain elevated, with $80 being the new normal for Brent due to infrastructure damage, geopolitical risk premiums, and inventory restocking.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

Nasdaq is set to overhaul the way companies enter its flagship Nasdaq-100 index, introducing a series of rule changes aimed at accelerating the inclusion of newly listed large-cap firms. The move comes as the exchange operator attempts to modernise its benchmark and address structural shifts in global equity markets, according to Reuters.At the heart of the changes is a new “fast entry” mechanism designed to significantly reduce the waiting period for high-value companies seeking entry into the index. Under the revised framework, eligible firms could be added within weeks of listing, a sharp contrast to the current process that can stretch to a year or more.The decision reflects a broader shift in corporate behaviour, where companies are choosing to stay private for longer periods, often reaching massive valuations before debuting on public markets. As a result, several firms are now entering exchanges as fully mature, large-cap entities rather than early-stage growth stories.Nasdaq’s new rules are expected to take effect from May 1, although their impact on index composition will likely begin to show from June. The changes are part of a wider effort to ensure that the Nasdaq-100 remains representative of the largest and most influential companies trading on the exchange.The urgency behind the revamp is also tied to a long-term decline in the number of publicly listed firms in the United States. Data cited by Reuters indicates that the count of listed companies has fallen by more than a third since 2000, raising concerns about the depth and diversity of public markets.The updated framework introduces a structured approach for early inclusion. Newly listed companies will be assessed based on their market capitalisation within the first week of trading. If they rank among the top constituents and meet other eligibility criteria, they could be fast-tracked into the index shortly thereafter.In addition to the fast-entry provision, Nasdaq is introducing a new methodology for calculating market capitalisation. This will include both listed and certain unlisted share classes, offering a more comprehensive view of a company’s size. This adjustment aims to better capture the true scale of modern corporations, many of which have complex share structures.The exchange is also removing the requirement for companies to float a minimum percentage of shares. However, firms with lower public float will carry reduced weightings within the index, ensuring that liquidity considerations remain embedded in the system.Further changes include a more systematic update of outstanding share data on a quarterly basis, replacing the existing ad-hoc approach. Additionally, companies that fall below a minimum weight threshold for two consecutive months may be removed from the index, making room for larger eligible firms.The revamp comes at a time when competition among global index providers is intensifying. Other major benchmarks are also exploring reforms to accommodate a new generation of high-profile listings, particularly in technology and artificial intelligence sectors.Inclusion in a benchmark such as the Nasdaq-100 remains highly coveted. It typically leads to increased institutional ownership, improved liquidity, and greater visibility among global investors. By speeding up access to the index, Nasdaq is positioning itself to better capture the next wave of market leaders expected to emerge from the current pipeline of large-scale initial public offerings.

Mumbai: Trading in equity derivatives is set to become more expensive from April 1, as a set of measures by the government and the central bank aimed at moderating speculation are set to kick in. The steps - including higher taxes on futures and options trading and tighter lending norms for brokers - will raise trading costs and squeeze volumes. The government, in its Budget 2026-27, has raised the securities transaction tax (STT) on futures to 0.05% from 0.02%, a 150% increase. On options, STT on premiums and exercise of options will both rise to 0.15% from 0.10% and 0.125%. RBI's tighter lending norms for capital market intermediaries, including brokers, requiring all credit facilities to be fully secured with 100% collateral, will also take effect on Wednesday. "While the STT hike and stricter RBI lending norms aim to curb speculative intensity, such a broad-based approach inevitably raises entry barriers and increases friction across the entire ecosystem," said Ankur Jhaveri, MD & CEO - Institutional Equities, JM Financial Institutional Securities. Volumes in equity derivatives could drop 15-20%, increasing impact costs in the cash market, according to him. Brokers collect STT from clients soon after the trade, making it an upfront cost for traders, regardless of the profit or losses. "We expect the biggest impact to be on retail traders following the STT hikes," said Dhiraj Relli, managing director and chief executive officer at HDFC Securities. "Derivatives volumes could drop around 20% for retail participants, and closer to 30% when you include proprietary traders." The futures segment is likely to see sharper cuts in trading activity compared to options on account of the STT increase, said brokers. This tax on futures trade is levied on the transaction value, increasing the outgo. "The higher tax is expected to increase trading, arbitrage and hedging costs which may impact to the overall cost and liquity in derivatives," said Roop Bhootra, whole-time director, Anand Rathi Share and Stock Brokers. Prop Traders RBI's tighter norms are aimed at bringing down banks' loans to brokers and proprietary traders, increasing their cost of capital. Proprietary trading desks rely heavily on bank-backed funding and guarantees to take higher trading exposures.“RBI regulations will reduce leverage for proprietary traders, who will now need 100% collateral for bank guarantees, and raise the cost of capital for brokers due to full cash margin requirements for intraday funding,” said Bhootra. Local proprietary and highfrequency trading firms — key contributors to market volumes — face the highest direct impact, said Jhaveri. For these traders, higher STT and reduced leverage are a double whammy, according to Relli. “This could reduce volatility on expiry days when such players are typically most active,” he said

Mumbai: Banks believe mark-to-market (MTM) treasury losses are expected to be significantly larger than estimated due to a sharp rise in 10-year yield, which crossed the psychological mark of 7% on Monday - its highest level since 2024. The 10-year yield closed at 7.03% on Monday, the last trading day of this fiscal year, versus its previous close of 6.94%. The money market will be closed on Tuesday due to Mahavir Jayanti. The yield jumped 37 bps in March, the biggest monthly move since February 2017. 129913805 The sharp rise in yields comes amid rupee crossing the 95-mark prompting RBI to step in to support the local currency. The last day of the fiscal year has seen rupee and bond movement in directions that were widely unexpected by treasury heads of commercial banks. "The fear around what comes next is so high that traders don't want to hold on to any positions right now. It doesn't look like the war will end anytime soon or that the shock will reverse quickly, so markets may have to start building positions around this new reality," said Alok Singh, head of treasury at CSB Bank. The jump in yields comes despite a lower-than-expected borrowing calendar. RBI on Friday said that it plans to issue ₹8.2 lakh crore of government securities in the first half of FY27, below market expectations of ₹8.53-8.85 lakh crore. "We will now have to watch out for the g-sec auction on Thursday. There we will be able to gauge what yield levels are comfortable for RBI depending on which bids it rejects and which it accepts," said a bond trader at a primary dealership. Market participants are now gearing up for supply in the next financial year, which is expected to push yields even higher, especially now that the 7% level has been breached. Investors are also factoring in a prolonged West Asia conflict and the risk of further escalation, assessing its potential to weigh on growth while fuelling inflation in a net energy importer like India. "Many stop losses were hit as yields crossed 7%. There are also fears of a potential rate hike as traders are now factoring in a prolonged war as the base case," said another bond trader at a private sector bank. Overnight call rate also jumped on March 30, the last trading day of this FY to 6.92% versus 5.46% previously. The call rate rose as banks were reluctant to lend funds on the last day of the fiscal year, traders said. TREPS rate jumped too, closing at 6.16% versus 5.44% previously, CCIL data showed. To inject liquidity into the banking system and offset the shortage of lending in overnight markets, the RBI conducted two variable rate repo (VRR) auctions of ₹50,000 crore each.