Sensex's 6,600-point fall in 36 sessions may have made the market look like a redux of 2008 post-Lehman market crash. But market veteran Prashant Jain says the Indian market today is far better than that in 2008. Pre-fall in 2008, India's market cap-to-GDP ratio bordered 150%, today it is at the bottom at around 55-60 per cent. In 2008, leverage was extremely high in the system and we were in the early stages of an NPA cycle. Crude oil prices were extremely high before they cracked. Today, we are at the other end on both. Our profits-to-GDP was at near peak in 2008, now, it is near the bottom. Which is what makes him optimistic on equity for the year ahead, says he.
STREET PULSE: Where we stand Nifty futures on the Singapore Exchange traded 435 points lower at 7am (IST), signalling a another major selloff ahead on Dalal Street. Elsewhere in Asia, it was a sea of red for Asian markets at the open.
HERE'S WHAT TO WATCH  | Tokyo's benchmark Nikkei 225 fell 2.24 per cent and the broader Topix tanked 2.42 per cent. Australia's ASX was down 2.6 per cent an hour into trade, with New Zealand's benchmark NZX50 down nearly three per cent in early afternoon trade. South Korea's KOSPI was down 1.22 per cent. |
| On Wall Street, the 30-stock Dow fell into a bear market, down more than 20 per cent from last month's record close. In overnight trade, the Dow shed 1,464 points, or 5.86 per cent, to end at 23,553. The S&P500 dropped around 141 points, or 4.9%, to finish near 2,741, while the Nasdaq lost around 392 points, or 4.7%, near 7,952. |
| Oil prices fell, adding to steep losses in the previous session after the US banned travel from Europe. Brent traded $1.03, or 2.9 per cent, down at $$34.76 a barrel. WTI crude fell by $1.13, or 3.4%, to $31.85 after falling 4% in the previous session. |
| The rupee recovered 49 paise to settle at 73.68 against the US dollar on Wednesday amid positive domestic equities and weakening of the American dollar in the overseas market. |
| WHO'S |  |
BORDERS SHUT… India imposed stringent travel curbs to the country as the WHO declared the Covid-19 outbreak a pandemic with more than 118,000 confirmed cases and 4,291 deaths in 114 countries. The government late on Wednesday suspended "all existing visas, except diplomatic, official, UN/international organisations, employment, project visas" until April 15. The US on Wednesday banned travel from Europe. The WHO has classified the coronavirus outbreak as a global public health emergency on January 30 and had been reluctant to call it a pandemic over concerns that it would create unnecessary panic.
Read More L&T TO FIGHT AT1 WRITEDOWN… L&T may break ranks with other investors holding Yes Bank's Additional Tier 1 (AT 1) bonds and move the Bombay High Court on Thursday against an RBI proposal to write their value down to zero as part of a rescue plan for the lender. On the other hand, other AT 1 holders represented by the Axis Trustee have decided to defer moving court to March 16 after starting negotiations with the RBI to convert a part of the bond exposure into equity, said people aware of the matter.
Read More YES BANK CONTAGION… The Yes Bank crisis is having a contagion impact on other private banks, forcing these lenders to clarify their position and address depositor concerns on their capital base and liquidity. RBL Bank, Karnataka Bank and South Indian Bank, in separate communications to their customers, have clarified that rumours around their financial health and stability are untrue and not based on facts. This also follows an RBI clarification about the safety of banking deposits on Sunday.
Read More | LOOK WHO'S |  |
BUY ON DIPS… Retail investors stepped up their flows into equity mutual fund schemes in February undaunted by the fall in the stock market in the later part of the month. Equity schemes received flows of Rs 10,796 crore in February — the highest monthly flows in 11 months — against Rs 7,547 crore in January. The industry, however, saw its assets decline to Rs 27.2 lakh crore in February from Rs 27.8 lakh crore last month on account of outflows from liquid schemes. Flows into equity mutual funds were on account of a mix of lumpsum investments and SIP.
Read More SBI PARTNER HUNT ON… SBI is striving to rope in local financial services groups like ICICI, HDFC, Kotak and Axis along with a few private investors as part of a strategy to infuse capital and revive Yes Bank. SBI is simultaneously examining a deal with bondholders for conversion of Yes Bank's additional Tier 1 (AT 1) securities into shares of the private bank. The bank would like to arrange equity capital of Rs 20,000 crore and Rs 30,000 crore of bulk deposit and certificate of deposits (CDs) to build a buffer to stabilise the bank in case of withdrawals and fund transfers once the moratorium is lifted. The AT1 bond swap proposal involves converting around Rs 8,500 crore bonds into Rs 1,700 shares.
Read More Meanwhile... AMFI JOINS BOND FIGHT… Amfi has written to both the central bank and the capital markets regulator to write down equity and preference shares before Additional Tier 1 (AT1) bonds, also called perpetual bonds, are removed from balance sheets. "We, as an industry, believe equity write-down should happen first, and then preference shares and only then the AT1 instruments should be written down," N Venkatesh, chief executive of Amfi. Many mutual fund schemes hold AT1 bonds of Yes Bank. These funds stand to lose their money if the RBI draft restructuring scheme is approved.
Read More 
Sell
No comments:
Post a Comment