Amid volatility in stock markets generated by tension between Russia and the US over Ukraine, LIC chairman M R Kumar on Monday said that the insurance behemoth was watching the geo-political situation carefully, though it was keen on listing of the IPO in March. The Life Insurance Corporation (LIC) has already filed the DRHP with the Securities and Exchange Board of India (SEBI) for its initial public offering (IPO). "We are watching the situation closely and carefully...but we are very keen on having listing in March," Kumar said, when asked about the impact of the evolving geopolitical situation on the upcoming IPO.
From the Sensex pack, Tata Motors, Sun Pharma, Wipro, Tata Consultancy Services, UltraTech Cement, Tech Mahindra, Bajaj Finserv, HCL Technologies, Infosys and IndusInd Bank were the major laggards. NTPC, Power Grid, Reliance Industries, Tata Steel, HDFC and HDFC Bank were the major winners.
'In case the El Nino pattern plays out negatively and/or the political situation becomes messy, we may see markets correcting and waiting for the situation to become clear by early/mid-2024.'
Among Sensex stocks, Tata Motors rose the most by 2.79 per cent. NTPC, Reliance Industries, Infosys, TCS, HDFC twins, Tata Motors, ITC, Power Grid and Bajaj Finserv were among the major gainers. Tata Steel fell the most by 1.22 per cent. L&T, Sun Pharmaceuticals, IndusInd Bank and Ultratech Cement were among the losers.
The stock market's continuing love affair with the bears is making investors shy away from not only domestic mutual funds, but also India-dedicated foreign funds, which is evident from the redemption pressure on them.
HUL was the top loser in the Sensex pack, shedding around 4 per cent, followed by Maruti, HDFC Bank, PowerGrid, IndusInd Bank, HCL Tech and Bajaj Finserv. On the other hand, Axis Bank, SBI, ONGC and ICICI Bank were among the gainers. NSE Nifty fell 149.95 points to 13,817.55.
The 50-share Nifty scaled a high of 10,227.30 intra-day but succumbed to profit-booking to finish at 10,155.25
The investors had pumped in a net sum of Rs 2,965.66 crore on February 11, the second-highest single-day inflow so far this month.
However, it is noteworthy that foreign investors pumped in money on the day of election results as the mandate became clear
A delegation of high-level executives from US public pension funds (non-profit and government sectors) is visiting India next week to assess and familiarise themselves with the investment opportunities in the country. These executives belong to various American states and cumulatively represent $1.8 trillion in assets under management (AUM) invested across the US and global markets. The United States (US) mission to India, which includes its embassy and consulates and the Department of Treasury, along with India's Ministry of Finance and the National Investment and Infrastructure Fund (NIIF), is hosting the delegation.
'For the next two years, we expect the bulk of earnings growth contribution from sectors like financials and energy, where the outlook remains positive, while the sectors which are linked to domestic consumption and are currently witnessing strains on margins have low salience for Nifty earnings.'
The government's step could push investors to choose riskier equity, or to fall back on bank deposits, thereby negatively impacting the debt market which actually needs to grow, points out T N Ninan.
Smaller stocks have emerged as Dalal Street's favourites in 2023 that has turned out to be a "great year" for equities, rewarding investors with big gains, driven by optimism over the country's macroeconomic fundamentals and heavy retail investors participation. Experts said equity markets are experiencing a prolonged bull run and it is during this time that the midcap and smallcap segments tend to outshine their larger counterparts. Till December 22 this year, the BSE smallcap gauge has jumped 13,074.96 points or 45.20 per cent while the midcap index has surged 10,568.18 points or 41.74 per cent.
P-notes are issued by registered Foreign Portfolio Investors (FPIs) to overseas investors who wish to be a part of the Indian stock market without registering themselves directly. They, however, need to go through a due diligence process. According to Securities and Exchange Board of India (Sebi) data, the value of P-note investments in Indian markets -- equity, debt, and hybrid securities -- stood at Rs 90,580 crore at April-end, compared to Rs 87,979 crore in March.
Mutual funds (MFs) have stepped up equity purchases after staying on the fence for over two months. Their net equity investments reached a four-month high of Rs 7,700 crore in July, rising for the fourth consecutive month after withdrawing a net of Rs 5,100 crore in April 2023. This trend continued in August, with net investments of Rs 3,400 crore in the first three trading sessions, according to data from the Securities and Exchange Board of India.
Equity benchmark indices Sensex and Nifty settled lower for the sixth straight session on Monday due to heavy selling in bellwether stocks including HDFC Bank and Reliance Industries amid mixed trends in the global markets and outflow of foreign funds. Falling for the sixth consecutive session, the BSE Sensex tumbled 638.45 points or 0.78 per cent to settle at 81,050. During the day, it plummeted 962.39 points or 1.17 per cent to 80,726.06. The NSE Nifty slumped 218.85 points or 0.87 per cent to end at 24,795.75.
Dalal Street had a roller coaster ride in 2024 from shattering record after record to facing heavy correction off-late but equity markets still rewarded investors with positive returns, driven by a surge in domestic fund flows and a resilient macro landscape. The first half of the year saw robust corporate earnings, a surge in domestic flows, and a resilient macro landscape, driving the Nifty to an all-time high of 26,277.35 in September 2024, according to Motilal Oswal Wealth Management.
Sebi is learnt to have written to several regulators including those in Bermuda, Luxembourg, and Switzerland, seeking detailed information on some FPIs.
As many as 267 of 453 companies from the BSE500 index are trading above their consensus price targets, according to the data compiled by Bloomberg. Not all companies in the BSE500 index are tracked by analysts.
Prices may go up because of higher energy costs, caused by the rise in shipping charges, with commercial vessels taking a longer route to avoid the troubled Red Sea region, the finance ministry said on Monday. Iran-backed Houthi rebels of Yemen are repeatedly attacking ships in the Red Sea. While the global economy is grappling with challenges such as sticky inflation, sluggish growth, and mounting fiscal pressure, India's external sector could face "potential risks" due to the ongoing geopolitical tensions, according to the finance ministry's report on the review of the Indian economy.
The impact of currency depreciation can also be mitigated by holding a portion of your investment portfolio in dollar-denominated assets.
Axis Bank was the top gainer in the Sensex pack, soaring over 13 per cent, followed by ICICI Bank, HDFC Bank, IndusInd Bank and Bajaj Finance. On the other hand, Sun Pharma, UltraTech Cement, Titan and Asian Paints were among the laggards.
The Indian equity market valuation has been moving in tandem with the US 10-year treasury yield. While the benchmark US bond yield has witnessed a nearly 70 basis point decline since the end of October this year, dropping from 4.93 per cent to 4.23 per cent on Friday, the Sensex earnings yield has slipped by nearly 45 basis points - from 4.5 per cent to 4.05 per cent. Previously, Indian equities' earnings yields rose in sync with the US bond yields.
From the Sensex pack, Larsen & Toubro jumped over 3 per cent.ITC, Reliance Industries, Sun Pharma, Kotak Mahindra Bank, Axis Bank, Infosys and State Bank of India were the other major gainers.
Madhabi Puri Buch, the first female chairperson of Sebi, doesn't plan to rest on her laurels in her third and final year in office and has set out an ambitious goal, such as moving towards a same-day and instantaneous settlement cycle for the secondary market.
Investors will keenly watch US Fed meet starting Tuesday
Continuing its heavy selling spree for the eighth consecutive month, foreign investors pulled out nearly Rs 40,000 crore from the Indian equity market in May on fears of an aggressive rate hike by US Federal Reserve that dented investor sentiments. With this, net outflow by foreign portfolio investors (FPIs) from equities reached at Rs 1.69 lakh crore so far in 2022, data with depositories showed. Going ahead, FPI flows will remain volatile in the emerging markets on account of rising geo-political risk, rising inflation, tightening of monetary policy by central banks, among others, Shrikant Chouhan, Head - Equity Research (Retail), Kotak Securities said.
Overseas investors witnessed net inflow of Rs 24,563 cr in Feb
Government-owned Life Insurance Corporation of India (LIC) has seen substantial gains from its investments in Adani group shares, which have experienced a significant recovery over the past year. The value of LIC's stake in Adani group companies surged by 51.6 per cent, or Rs 22,591 crore, reaching Rs 66,388 crore as of Friday's close. This compares to Rs 43,797 crore on May 31 last year, according to stock exchange data.
Over 25 per cent of the net flows have been directed toward the large-cap category as investors preferred to put money in the top 100 stocks by market capitalisation because the segment has been the most resilient over the past year.
The broad-based NSE Nifty hit a low of 10,979.30 intra-day, managed to end above the 11,000-level at 11,027.70, down 21.95 points, or 0.20 per cent.
Friday will be a landmark day for domestic markets, with all the listed stocks entering the professed T+1 (trading plus one day) settlement cycle. About 200 stocks, which account for more than 80 per cent of India's market capitalisation, will be settled on a next-day basis, with effect from January 27. This will evidently complete the transition to the T+1 cycle that started in February 2022 with the bottom 500 stocks in terms of market value.
A combination of strong earnings and economic growth, and hopes of the Federal Reserve ending the rate-hike cycle have pushed gross buying of Indian equities by foreign portfolio investors (IPO) to a new high. In 2023, FPIs have been gross buyers of shares worth Rs 25.5 trillion, the highest ever in a calendar year. FPIs also sold shares worth Rs 23.9 trillion. On a net basis, they were net buyers to the tune of Rs 1.6 trillion, the highest since 2020.
Once again, tax demands on foreign investors cause worry.
M&M was the biggest loser in the Sensex pack, declining nearly 3 per cent, followed by TCS, Bajaj Finance, Wipro, Kotak Bank, Tech Mahindra, HCL Tech and Tata Motors. In contrast, Titan, Bharti Airtel, ICICI Bank and L&T were among the gainers, rising up to 0.93 per cent.
Minimum taxes on foreign portfolio investors have been removed.
After withdrawing record funds in 2021-22, foreign portfolio investors (FPIs) continued their sell-off in the last fiscal too and pulled out Rs 37,631 crore from Indian equities amid aggressive rate hikes by central banks globally. The outflow trend is likely to reverse in the current financial year since India has the best growth potential in the financial year 2023-24 (FY24), VK Vijayakumar, chief investment strategist at Geojit Financial Services, said. Market analysts believe that FPI flows in the current financial year would be decided by a host of factors, such as the US Federal Reserve's policy stance, oil prices movement and development in the geopolitical situation.
The NSE Nifty closed lower by 44.55 points, or 0.39 per cent, at 11,234.35. Intra-day, it shuttled between 11,332.05 and 11,210.90.
The government has shortlisted Cyril Amarchand Mangaldas for giving legal advice on upcoming mega IPO of India's largest insurance company LIC, an official said. Four law firms - Crawford Bayley, Cyril Amarchand Mangaldas, Link Legal and Shardul Amarchand Mangaldas & Co - had made presentations before the Department of Investment and Public Asset Management (DIPAM) on September 24. Following presentations, Cyril Amarchand Mangaldas has been selected as legal advisor for the initial public offering (IPO) of Life Insurance Corporation (LIC), the official told PTI.
