While the market may seem to be doing well, the rally has actually polarised the market. Large pockets of the market are at historic lows and this has created value across the market-cap curve. The midcap index trades at a 11-12% discount to largecap peers, while the smallcap index is at a 22% discount. As one analyst points out, while smallcaps and midcaps have a lot of inherent value at their current valuations, even in the largecap space, the cyclical space trades at a discount to the broader market.
STREET PULSE: Where we stand Nifty futures on the Singapore Exchange traded flat at 7 am (IST), indicating fatigue on Dalal Street. Stocks were mixed in Asian trading as investors mulled over the implications of a surge in the number of coronavirus cases in Hubei, after it deployed a revised methodology.
HERE'S WHAT TO WATCH  | Korean stocks climbed and Shanghai was flat at the open. The Hang Seng Index was on course to claw back all its losses since the end of the Lunar New Year holiday. The yen edged up, the yuan ticked down, as Treasuries rose. |
| Wall Street closed at record highs in overnight trade as news that the coronavirus outbreak could be running out of steam kept buyers in the ring. Dow rose 274 points, or 0.94%, to 29,550, the S&P500 gained 21.63 points, or 0.64%, to 3,379 and the Nasdaq 87 points, or 0.9%, to 9,725. |
| Oil prices rose for the third day on expectations that major producers are likely to enact deeper output cuts to offset the slump in demand caused by the coronavirus outbreak in China. Brent crude rose 17 cents to $55.96 a barrel while WTI gained 29 cents to $51.46 |
| The rupee pared early gains to settle 6 paise down at 71.34 against the US dollar on Wednesday ahead of the release of key domestic macroeconomic data. |
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Yes Bank Has New Suitors… JC Flowers & Co, a private equity fund specialising in the turnaround of financial firms around the world, is leading a consortium that plans to invest as much as $2 billion in Yes Bank. About half-a-dozen investors, including JC Flowers & Co, Tilden Park Capital Management, OHA (UK) (part of Oak Hill Advisors) and Silver Point Capital, have sent in 'non-binding' expressions of interest, and the investment could be in two stages.
Read More S igns of Demand Revival… Sales growth of refrigerators, ACs and washing machines in 2019 was the best since demonetisation, signalling a revival in discretionary purchases and kindling hopes that the economy is on the mend. Volume sales in the overall consumer electronics and major domestic appliances market grew 9% year-on-year in 2019 against 1% in 2018 and 4% in 2017, as per data released by GfK India. Industry executives attributed the revival largely to pentup demand.
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Overseas Assets Under NCLT Ambit… In the first instance of overseas incorporated subsidiaries being brought under the ambit of local insolvency laws, the NCLT has ordered the inclusion of Videocon's oil businesses in Brazil and Indonesia as part of insolvency proceedings being conducted in India. The assets include stakes in overseas oil blocks held through Videocon arms incorporated in the Cayman Islands and British Virgin Islands. These were purchased after Videocon entered an agreement with BPCL 14 years ago to search for foreign investment opportunities jointly.
Read More IIP Down, Inflation Up… Factory output shrank in December after a mild pickup in November while retail inflation accelerated to a 68-month high in January in twin blows to the struggling economy. Data released by the statistics office showed industrial output contracted 0.3% in December compared with a 1.8% rise in November. April-November industrial growth was 0.5% against 4.7% in the year-earlier period. The simultaneously released CPI showed retail inflation raced to 7.59% in January from 7.35% in December, strengthening the likelihood of a prolonged pause in interest rates by RBI despite muted growth.
Read More Meanwhile... Tax Dispute Settlement… The Direct Tax Vivaad se Vishwas Bill, 2020 will now cover pending litigation in debt recovery tribunals as well besides those in various courts and tribunals, the Union cabinet said while approving the change to the bill. "It has been decided to cover disputes pending in DRTs also," Union minister Prakash Javadekar said after the Cabinet meeting. "Disputes of search and seizure where the recovery is below Rs 5 crore can be taken in this scheme," he said.
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