'From a risk-return perspective, large-cap funds may generate lower-than-historical average returns in 2024, whereas mid-, and small-cap funds hardly have any upside left.'
Indian Oil Corporation (IOC), the nation's biggest oil firm, on Tuesday reported a 31.4 per cent drop in the fourth quarter net profit as record refining margins were wiped away by a margin squeeze in petrochemicals and losses on auto fuel sales. Standalone net profit of Rs 6,021.88 crore, or Rs 6.56 a share, in January-March, compared with Rs 8,781.30 crore, or Rs 9.56 per share, in the same period a year back, the company said in a stock exchange filing. Sequentially, the profit was higher than Rs 5,860.80 crore in the previous quarter.
India's mutual fund (MF) industry had barely any retail footprint when it completed 50 years in 2013. MFs had Rs 7 trillion in assets under management (AUM) in March 2013, of which around Rs 5 trillion was in institution-focused debt funds. By comparison, bank deposits in the country stood at Rs 67.5 trillion around the same time.
Investors should view any bounce-back in bank stocks as an opportunity to exit the pack, analysts suggested, as the worst may not be over yet. The recent quarterly results of HDFC Bank and Axis Bank disappointed the Street, triggering a marketwide selloff by foreign institutional investors, especially in banking counters. While HDFC Bank, which was the anchor for the market correction during the past week, ended 2 per cent higher amid short covering on Wednesday, Axis Bank's shares settled 3 per cent lower.
The Indian economy is on the path of a durable recovery on the back of conducive monetary and credit conditions, the global headwinds notwithstanding, said a Reserve Bank of India (RBI) article on the state of the economy. Domestically, there have been several positives on the COVID-19 front, in terms of reduced infections and faster vaccinations, the article published in the RBI Bulletin November 2021 added. The Indian economy, the article said, is clearly differentiating itself from the global situation, which is marred by supply disruptions, stubborn inflation and surges of infections in various parts of the world.
Titan was the top gainer in the Sensex pack, rising over 3 per cent, followed by M&M, Reliance Industries, Axis Bank, TCS, Maruti and Infosys. NSE Nifty surged 122.10 points to 15,885.15.
'New record for the Nifty50 is only a question of when.'
Equity markets this week will be largely guided by trends in global stocks, foreign funds' trading activity and progress of monsoon, analysts said. Investors will also track the movement of rupee against the US dollar and crude oil prices. Benchmark indices Sensex and Nifty closed at fresh lifetime highs on Friday.
It is to be seen if SBI under Setty, who will have a three-year term, can ride the economic cycle to take SBI to new heights, navigating some of these challenges.
From the 30-share pack, Indusind Bank, Axis Bank, Maruti Suzuki, Bajaj Finance, Bajaj Finserv, UltraTech Cement and Mahindra & Mahindra were the biggest drags, tumbling up to 7.63 per cent.
Even as the returns of mutual fund (MF) schemes have improved considerably in the past three months, addition of new investors has remained in the slow lane for the MF industry. According to industry data, during the first six months of CY 2023, MFs onboarded only 1.6 million new unique investors, in stark contrast to the 4.7 million investors added during the same period last CY and the 2.4 million in 2021. It is noteworthy, however, that the current additions for this year have doubled in comparison to the figure of 800,000 seen in 2020.
Stocks of Hindustan Petroleum Corporation Limited (HPCL), Bharat Petroleum Corporation Limited (BPCL) and Indian Oil Corporation Limited (IOCL) have more headroom left despite the sharp run in the last few weeks, suggests a recent report from Morgan Stanley. Stocks of these oil refining and marketing companies (OMCs), it believes, are seeing multiples re-rate as investors reassess long-term growth prospects. "IOCL trades at one year forward P/BV of 1.2x, 19 per cent below +1 standard deviation (SD); BPCL trades at one year forward P/BV of 1.5x, near historical averages; HPCL trades at one year forward P/BV of 1.5x, near +1SD," Morgan Stanley said.
'People trust India and Indians a lot more than they trust China and the Chinese.'
Dalal Street investors became richer by Rs 9.68 lakh crore in five days of market rally, where the Sensex breached the historic 73,000-mark for the first time ever to reach a new record peak, taking the market capitalisation of BSE-listed companies to an all-time high of Rs 376 lakh crore. The 30-share BSE Sensex jumped 759.49 points or 1.05 per cent to settle at a new closing high of 73,327.94 on Monday. During the day, it zoomed 833.71 points or 1.14 per cent to reach its all-time peak of 73,402.16.
Flow surge in equity schemes is an important reason why Indian stock market did not crash.
Investments into domestic shares through participatory notes (P-Notes) surged to the highest level in more than six-and-half years at Rs 2.65 lakh crore (about $43 billion) in October.
Indian rupee has declined by about 25 per cent since December 31, 2014, and is nearing 80 against the dollar, the Lok Sabha was informed on Monday. The value of the rupee declined from 63.33 against a dollar on December 31, 2014, to 79.41 on July 11, 2022, Finance Minister Nirmala Sitharaman said in a reply quoting RBI data. The exchange rate of the Indian Rupee against the dollar was Rs 78.94 per dollar as of June 30, 2022, Finance Minister Nirmala Sitharaman said in a written reply.
Christopher Wood, global head of equity strategy at Jefferies reiterate his bullish view on Indian equities on the back of a steady fall in Covid cases coupled with a sharp economic recovery in India, reports Puneet Wadhwa.
India-focused offshore funds and exchange-traded funds (ETFs) witnessed a net outflow of $376 million in three months ended March 2021, making it the twelfth consecutive quarter of withdrawal, according to a Morningstar report released on Wednesday. This was markedly lower than the net outflows of $986 million registered during the quarter ended December 2020. India-focused offshore funds and ETFs are some of the prominent investment vehicles through which foreign investors invest in Indian equity markets.
Muted global trend after a report that US President Donald Trump was preparing to impose more tariffs on China hurt trading sentiments.
It was a case of 'buy on hopes and sell on news' as the Indian market posted only modest gains despite a landslide victory to Narendra Modi-led Bharatiya Janata Party (BJP).
Oberoi Realty has hit the top slot in Mumbai's ranking of the top-20 developers in terms of sales in 2021, evicting the Runwal group which was number one last year. The Lodha group which had occupied the top slot three out of five times since 2017 slipped to second place in 2020 and continues to be in the same position in 2021. The Oberoi group was in fifth place in 2019 and fourth place in 2020. This is the first time that it has occupied the number one position. The Runwal group which took the top slot in 2020 is down to third place in 2021.
A higher-than-expected consumer price inflation (CPI) print for March in the US has dashed hopes of an interest rate cut by the US Federal Reserve (US Fed) in June. Analysts now expect the US central bank to start cutting rates in September, provided inflation remains in check and oil prices remain supportive. The markets, analysts believe, partially factored in this possibility.
The total number of unique investors directly investing in the stock market has surged to 80 million for the first time, with the latest 10 million additions taking place in just eight months, according to data shared by the National Stock Exchange (NSE), the country's largest bourse. "The 80 million unique PAN (permanent account number) investors correspond approximately to around 50 million unique households in India amounting to around 17 per cent households directly investing in the Indian stock market via NSE's extensive nationwide network of trading members," said the exchange. In 2021, the number of domestic households were pegged at 300 million.
The outcome of the general elections, the Morgan Stanley note says, has enough firepower to sway the markets on either side.
Consumption-related stocks, such as hotels, and quick service restaurants (QSRs), have been hitting the ball out of the park ahead. On the other hand, the Miss World Pageant scheduled for later this year in New Delhi, too, could provide some tailwind to these stocks, especially hotels and aviation. However, analysts suggest investors put their best foot forward and buy these counters only on a decline given the recent rally and economic headwinds.
The surge is a stark turnaround from 2013 when the country's current account gap hit a record high due to outflows on expectations the US Fed would rein in its stimulus programme
Investments through participatory notes (P-notes) in the Indian capital market surged to a 27-month high of Rs 83,114 crore at November-end driven by continued liquidity and improvement in second quarter corporate earnings. P-notes are issued by registered foreign portfolio investors (FPIs) to overseas investors who wish to be 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 -- increased to Rs 83,114 crore at November-end from Rs 78,686 crore at October-end.
India is currently home to 52 unicorn startups and one of the fastest-growing startup ecosystems.
Wall Street-correlated stock markets are facing the risk of correction, as Christopher Wood, the global head of equity strategy at Jefferies, conveys to investors in his latest edition of GREED & fear. Rising crude oil prices, which are nearing $100 a barrel (Brent), pose a threat to the global central bank's battle against inflation and have led to a re-evaluation of its exposure to Indian stocks. "The potential for more US Federal Reserve (Fed) rate hikes, combined with the risk that monetary tightening finally bites as regards the economy, remains a risk for Wall Street-correlated world stock markets. "There is also the oil factor. This is why GREED & fear continues to believe the pain trade is down. "Areas in Asia, such as Indian midcaps, which have already done very well, are at obvious risk of some profit-taking," writes Wood.
Titan was the top laggard in the Sensex pack, shedding 1.39 per cent, followed by HDFC, Axis Bank, Kotak Bank, HCL Tech and Tech Mahindra. On the other hand, Asian Paints, SBI, M&M, TCS, Bajaj Finserv and ICICI Bank were among the winners, spurting as much as 3.25 per cent.
After a stellar run on the bourses that saw tractor stocks rise up to 52 per cent, analysts are turning cautious on the sector as muted demand trends may weigh in the near-term. Total volumes in the tractor segment for the last three quarters of the current financial year (9MFY24) have remained weak with VST Tillers, Escorts Kubota, and M&M seeing declines of 21 per cent, 5 per cent, and 3 per cent year-on-year (Y-o-Y), respectively, during the period, amid patchy rainfall, delayed crop harvest, and lower reservoir level. Across industry, total domestic sales volume so far in the current financial year (April '23 to January '24) has declined 5 per cent Y-o-Y, as per Tractor Manufacturers Association (TMA).
Rate-sensitive sectors like banks, auto and realty witnessed strong buying demand in trades today
BofA Securities has revised its year-end Nifty target from its earlier projection of 16,000 to 14,500 now - down over 6 per cent from the current levels. Fast tightening monetary conditions, slowing growth/fears of US recession and the likely Nifty EPS (earnings per share) cuts, BofA Securities said, are the key headwinds for the markets in the near-term. However, clarity on macro and monetary policy outlook in the US/India, it said, is the silver lining that could see markets bottom out by August/September 2022.
Stocks of public sector undertakings (PSUs) have been on fire in the past year as investors cheered an improvement in key operating metrics and embraced counters of these state-owned enterprises, analysts suggest. The S&P BSE PSU Index has gained over 90 per cent in the past year, rising much higher than the S&P BSE Sensex, which has rose nearly 19 per cent during this period, according to ACE Equity data. The BSE PSU Index, reports show, has delivered a compound annual growth rate (CAGR) of 28 per cent (including dividends reinvestments) over five years and risen by almost 60 per cent in the past year.
The sharp rally in the markets thus far in fiscal 2023-24 (FY24) has left analysts struggling to find investment-worthy themes. The S&P BSE Sensex has surged nearly 7 per cent thus far in FY24 and hit a fresh 52-week high of 63,601.71 levels on June 22, mostly led by foreign institutional (FII) flows. "The Indian market has seen a broad rally in the past few months but headline indices have seen more modest performance. "We are not very clear about the reasons for the rally and the divergent performance and struggle to find ideas in the consumption, investment and outsourcing sectors after the sharp run-up in several of our favored sectors and stocks in the past two months," wrote Sanjeev Prasad, co-head, Kotak Institutional Equities, in a recent co-authored note with Anindya Bhowmik and Sunita Baldawa.
Among the lot, Rallis India, Escorts, Jubilant Life Sciences, and Crisil added half of the total gains made in the ace stock-picker's portfolio.
'The good news is that money continues to flow into India-focussed offshore funds.'
Fundraising through qualified institutional placement (QIP) has revived this year, led by commercial banks, after a lacklustre 2022. According to data compiled by Prime Database, Indian companies have raised Rs 53,070 crore in 2023 so far, of which seven banks - Union Bank of India, Indian Bank, Bank of India, Federal Bank, IDFC First Bank, Bank of Maharashtra, and J&K Bank - account for Rs 21,290 crore, or about 40 per cent. If other financial institutions are included, the figure surges to Rs 26,690 crore.
Fiscal pressure for the Indian economy is gradually rising, suggested analysts at Jefferies in a recent note, as oil prices (Brent) - which are close to the $100 a barrel mark - continue to climb ahead of a busy election calendar. They added that the sharp rally in the equity markets during the last few months has made valuations costly. As a result, Jefferies expects the Indian markets to remain choppy in the near term.
