Sunday, 4 August 2019

India's big slip in global m-cap ranking; Plus, what to watch in today's market

MORNING NEWSLETTER

5 Aug, 2019 | 08:42 AM IST


Good Morning!

Last December, India overtook Germany to become the seventh largest stock market in the world. But the selloff in past few months has dragged it down to the ninth spot, with total market cap slipping below $2 trillion. The government is said to be working on a relief package for FPIs. The question is: are FPIs fleeing only because of the income-tax levy?

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STREET PULSE: Where we stand
    SGX Nifty traded nearly 70 points down at 7 am (IST), signalling pain ahead for Dalal Street. Asian shares extended losses as a sharp escalation in the trade war unnerved investors. Nikkei slipped 1.1% to the lowest since early June; Australian shares were down for the fourth straight session. Kospi tumbled 1.2% to hit its lowest since Dec 2016. The stocks rally in the US suffered its worst week in months: Dow fell 2.6%, S&P500 3.1% and Nasdaq 3.9%. Read More

    Oil prices fell on Monday amid concerns about weaker crude demand amid an escalation in trade war. Tensions in the Middle East offered some support to prices. Brent crude fell 50 cents to $61.39 a barrel while WTI crude was down 24 cents at $55.42. Read More

LOOK WHO'S

Rate cut ahead?... RBI is likely to cut the benchmark policy rate by another quarter percentage point this week, with growth concerns mounting across various consumption pockets. Majority of the 24 economists polled for an ET survey said the central bank would focus on a liquidity framework that is a key driver for taking rate-cut benefits to borrowers. Read More

Giant killer!... Hyundai Motor India raced ahead of rivals Maruti Suzuki India and M&M in July to grab the top slot in India's competitive utility vehicle segment, paced by demand for the recently launched SUV Venue. About 60% of the volumes for Hyundai came from Venue, which sold almost double the volume for Maruti Suzuki Vitara Brezza and Mahindra XUV300. Read More

WHO'S
Falling like ninepins...

India's stock market capitalisation fell below the $2 trillion mark for the first time in six months, triggered by the July selloff on Dalal Street that led to an 8.8 per cent erosion in investor wealth. The country's total value of all listed stocks dropped to $1.97 trillion on Friday, slipping below Germany's as foreign investor sentiment has soured following the increase in tax surcharge and a slowdown in the economy. Read More

Slowdown pain... Maruti Suzuki India is likely to operate just one shift at all its plants, with demand for cars slumping to multi-decade lows across the country and causing inventory to bloat ahead of the traditional festive season. These production cuts would mean hundreds of job losses for contractual staff. Read More

Meanwhile...
Iran said it has seized another foreign vessel suspected of smuggling fuel in the Persian Gulf, state media reported Sunday, adding to growing tensions over a spate of incidents involving oil tankers in the region. Read More
KEY INDICES
15,709  -45.25
12,496  -55.59
28,205  -162.3
15,422 + 90.0
Price Movers|Volume Movers|Near 52 Week High|Near 52 Week Low

Stocks to watch

    US-based private equity giant Blackstone Group is set to acquire the remaining 50% stake in Indiabulls Real Estate's commercial properties for around Rs 4,800 crore.

    Reliance Jio Infocomm and Bharti Airtel are among around a dozen companies that have shown interest in the assets of bankrupt Reliance Communications.

    Patanjali Ayurved's sales in volume terms have shrunk in cities, while growth reduced to one-third in villages as the overall market for natural products continues to grow.

    US-based Ebix and India-headquartered MakeMyTrip have joined the race to acquire cash-strapped travel company Cox & Kings.

UnQuote: How to trade now
Do not look at short-term factors like sentiment, FII flows to take investment decisions
Saurabh Mukherjea, Marcellus Investment

Day Planner:

    Earnings: Berger Paints, JSL, Torrent Power
    Markit July Serices PMI
    RBI rate-setting meet to start
    Markit July Services PMI for US

OUTLOOK
LARGECAPS
    Jagannadham Thunuguntla of Centrum Broking says some market leaders are still not undervalued and are trading at expensive valuations despite almost 50 per cent correction from their peaks.

SILVER
    Silver prices have failed to gain strength in tandem with gold. Global spot silver prices fell this past week. Reading price action chart, analysts say silver lacks strength to decisively breach $16.60.

RUPEE
    IFA Global says the likely range for the USD-INR pair is 69.05-69.45 with an upside bias as there is a lot of risk aversion across global markets.

STOCKS RECOMMENDATIONS
Pidilite Industries Ltd. 5 Aug, 2019 | 08:35 AM IST buyBuy
Heidelberg Cement India Ltd. 2 Aug, 2019 | 01:32 PM IST buyAdd


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