tailwinds of a remarkable year and handsome investor returns, Indian equities are set for an eventful journey in 2024, with a slew of local and global cues -- varying from interest rates to Lok Sabha polls to geopolitical happenings. Analysts are of the view that the bull run in the domestic equity market will continue, and over the next 3-6 months, the benchmark indices -- Sensex and Nifty -- could climb up to 7 per cent. In 2023, the 30-share BSE Sensex jumped 11,399.52 points or 18.73 per cent, and the NSE Nifty climbed 3,626.1 points or 20 per cent.
'India has a lot of potential, not just in commercial aspects, but also in hiring of people and sourcing of products.'
Most brokerages are betting that the new government will shift to a policy focussing on boosting rural incomes and consumption since that has clearly been a pain point.
Equity indices chalked up losses for the second straight session on Monday, in tandem with a bearish trend overseas as ratcheting up of hostilities in Ukraine and prospects of further rate hikes by the US Fed soured global risk sentiment. The rupee slipping to another all-time low against the US dollar amid foreign fund outflows added to the gloom, traders said. After tumbling over 800 points in intra-day trade, the 30-share BSE Sensex clawed back some lost ground to end 200.18 points or 0.34 per cent lower at 57,991.11.
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.
Financial assets make a comeback as returns on physical assets falter.
In the backdrop of the crisis brewing at Paytm Payments Bank, major fintech companies are ramping up their workforce and inducting new faces in their leadership teams, industry sources said on Wednesday. Users will not be able to add funds to their Paytm Payments Bank Wallet after February 29, though they will still be able to use the services and the existing balance in the wallets, according to the Reserve Bank of India (RBI) diktat. Industry sources said that competitors to Paytm are investing heavily in offline payments while doubling their salesforce.
On the back of sound macroeconomic policies and softer commodity prices, India's growth momentum is likely to be sustained in 2023-24 in an atmosphere of easing inflationary pressures, said the Reserve Bank's annual report released on Tuesday. It, however, added that slowing global growth, protracted geopolitical tensions and a possible upsurge in financial market volatility following new stress events in the global financial system could pose downside risks to growth. "On the back of sound macroeconomic policies, softer commodity prices, a robust financial sector, a healthy corporate sector, continued fiscal policy thrust on quality of government expenditure, and new growth opportunities stemming from global realignment of supply chains, India's growth momentum is likely to be sustained in 2023-24 in an atmosphere of easing inflationary pressures," it said.
In the June quarter of FY24, 51 per cent of consumers who took small-ticket personal loans already had more than four credit products at the time of accessing yet another new loan, compared with just 17 per cent in the June quarter of FY20, points out Tamal Bandyopadhyay.
Benchmark indices failed to hold on to early gains and closed in the red for the seventh straight session on Thursday, with participants remaining in wait-and-watch mode ahead of the RBI's interest rate decision. Unabated selling by foreign funds added to the pressure, though a modest recovery in the rupee cushioned the fall, traders said. After rallying in early trade, the 30-share BSE Sensex came under selling pressure in the afternoon session and closed 188.32 points or 0.33 per cent lower at 56,409.96.
Tata Sons Private Limited, the holding company of the Tata group, witnessed a precipitous drop in its net debt to Rs 5,656 crore in the 10 months ended January this year, as its cash reserves burgeoned to Rs 9,516 crore during this period. Eight years ago, in 2015-16, Tata Sons reported a net debt of Rs 5,132 crore; from March 2017 until March 2023, this figure was above the Rs 14,700 mark, peaking at Rs 27,437 crore at the end of March 2019, according to data sourced from Capitaline. The company's gross debt nearly halved to Rs 15,173 crore until January 2024 on a standalone basis, down from a peak of Rs 31,363 crore reported in the financial year ended March 2019.
Inflation data and global trends would be the major driving factors for the equity markets this week which after a record-breaking run took a breather in recent trades, analysts said. The overall market sentiment remains positive, supported by improving economic data and earnings but higher valuations can trigger bouts of profit booking, they said further. During the last week, which the 30-share BSE benchmark rose by 175.12 points or 0.30 per cent.
Equity investors have become poorer by more than Rs 18.74 lakh crore as the market continued to remain bearish for the fifth session on the trot on Thursday. The 30-share BSE Sensex tumbled 1,158.08 points or 2.14 per cent to end below the 53,000-level at 52,930.31 points on Thursday. Markets have been falling for five straight sessions and the BSE benchmark has tumbled 2,771.92 points or 4.97 per cent during this period.
April-June 2023 (Q1FY24) was a mixed quarter for India's top family-owned business groups. Three of the big five in terms of revenue reported a year-on-year (Y-o-Y) decline in combined net sales and two saw a Y-o-Y fall in net profits. Combined net sales of all listed companies in the five groups were up just 2.2 per cent Y-o-Y at Rs 6.6 trillion in the quarter, down sharply from the 10.3 per cent in the March 2023 quarter (Q4FY23) and 42.8 per cent in Q1FY23.
While Jio MF will undoubtedly grow in size, it will have to cross multiple hurdles even to emerge as the market leader, observes Debashis Basu.
'Just the amount of work which is there just to become more and more successful in banking. For this to happen you need to have leaders who understand technology.'
Luxury carmaker BMW India and ICICI Bank signed an agreement on Friday for offering financing solutions.
Tata Consultancy Services' (TCS') contribution to the overall market capitalisation (mcap) of listed Tata group companies has slipped below 50 per cent for the first time in over a decade. This has happened amid a rally in other Tata stocks, led by smaller companies, even as TCS, the group's largest company by mcap, has lagged. In recent quarters, Tata's listed firms have emerged as leading performers on the bourses, with the group's combined mcap crossing Rs 30 trillion early last week - a first for a private sector conglomerate.
The Russia-Ukraine conflict, which has spooked financial markets globally, will set the tone for Dalal Street this week amid concerns over energy prices and foreign fund outflows, analysts said. Participants will also track key macroeconomic signals like GDP estimates and PMI data for manufacturing and services sectors to be announced this week, they added. "With earnings season behind us and given the overall sentiments, markets are expected to move in sync with global peers in the coming week. "A close eye will be kept on the developments concerning the Russia - Ukraine crisis and considering the inflation overhang, market participants will also observe movements in energy prices," said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities Ltd.
In January, Visa's chief executive officer, Al Kelly, said during an earnings call that "there's been a burst of the balloon in valuations in the fintech world". Noting that the trend of lower valuations "is a helpful characteristic of the current environment", he added: "We will look for capabilities and management teams that will bring more value to Visa than we can bring ourselves." Data from KPMG's Pulse of Fintech H2'22 shows that global fintech investment - via mergers and acquisitions (M&As), private equity (PE) and venture capital (VC) firms - at $164.1 billion in 2022, was down 31 per cent over the year before. Indian fintechs held up better during this timeframe, attracting $6 billion, or a fall of 24 per cent.
Education finance is a complex and dynamic sector. There are too many variables -- the course, the calibre of students, the universities, and the job prospects once the course is over, notes Tamal Bandyopadhyay.
This will be the lender's first result after its merger with HDFC Ltd, effective from July 1, and will keep analysts glued to the management's earnings growth guidance for the merged financial behemoth.
India decisively withstood global headwinds in 2023 and is likely to remain as the world's fastest-growing major economy on the back of growing demand, moderate inflation, stable interest rate regime and robust foreign exchange reserves. Despite widespread pessimism witnessed among the developed nations and the worsening geopolitical situation, India recorded a gross domestic product (GDP) expansion of 6.1 per cent in the March quarter. The growth moved up to 7.8 per cent in the June quarter and was 7.6 per cent in the September quarter. For the first six months of this fiscal, the growth was 7.7 per cent.
The Securities and Exchange Board of India (Sebi) is in the process of issuing a standard operating procedure (SOP) for designated depository participants (DDPs) regarding disclosures and onboarding of foreign portfolio investors (FPIs), according to a regulatory document seen by Business Standard. DDPs act as a link between the markets regulator and overseas investors. The SOP, framed in consultation with the industry, aims to bring consistency across all players and avoid any form of regulatory arbitrage.
Stocks of small- and mid-cap companies continued to gain ground in July, notwithstanding analysts sounding caution on these two market segments given the sharp run thus far in calendar year 2023 (CY23). Sanjeev Prasad, co-head of Kotak Institutional Equities, in a note co-authored with Anindya Bhowmik and Sunita Baldawa in June-end, had cautioned against the sharp run in small- and mid-caps. "We do not see any particular reason for the excitement in small- and mid-cap stocks.
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The proposed Central Bank Digital Currency (CBDC) to be issued by the Reserve Bank will play a critical role in improving the speed of transactions and reducing the cost of cash, a Deloitte report said on Wednesday. The Reserve Bank of India is planning to come out with a central bank-backed digital currency, using blockchain technology in 2022-23. As a financial services innovation, CBDCs are likely to play a pivotal role in shaping the 'future of value transfer', the report said, adding that most central banks worldwide are now in various stages of their evaluation of launching their national digital currencies.
The equity cult has grown at a rapid pace in India in the last few years, with retail investors latching on to the stock markets like never before. At 126.6 million, the number of dematerialised (demat) accounts, where investors hold their securities in electronic form for trading purposes, are at record high levels. The growth rate, on an annualised basis, stood at 27 per cent in 2022-2023, up from barely 6 per cent a decade ago.
The plan was to expand further, add more branches and also eventually become the third bank in India to start a wholly owned subsidiary after Singapore's DBS Bank and State Bank of Mauritius, but those plans never materialised due to lack of scale and rising non-performing assets in the country.
'Younger investors start their journey with very little capital so they are risking less while they have a lot of time to experiment and learn early on.'
Shares of ICICI Bank may outperform those of HDFC Bank in the near-term, analysts said recently, after the Sandeep Bakhshi-led private sector lender reported a strong set of numbers for the July to September quarter (Q2) of financial year 2023-24 (FY24). The result, they said, reiterated that ICICI Bank is maintaining a sustainable and prudent growth led by tech-driven initiatives as against HDFC Bank, which is facing merger related challenges. According to analysts at Prabhudas Lilladher, ICICI Bank is valued at par with HDFC Bank at 2.2x/1.9x on FY25/26E core adjusted book value (ABV) basis.
Equity markets extended their rally on Friday, with the Sensex and Nifty jumping over 1 per cent each, in tandem with a positive trend in global equities. Buying in Infosys and banking counters helped markets maintain their winning run. The 30-share BSE Sensex rallied 632.13 points or 1.17 per cent to settle at 54,884.66.
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.
Mutual funds' average cash holdings in equity schemes topped 6 per cent in February as fund managers went slow on deployment of new inflows on expectations of better buying opportunities amid uncertainties in the market.
The number of dematerialised (demat) accounts required to hold shares and other securities in electronic format rose by 3.1 million in April, bringing the total tally to a fresh record of 154.5 million. Since December last year, the new additions have consistently remained above the 3 trillion mark, a sign that the stock markets continue to attract new investors despite a spike in volatility.
Foreign flows into Indian equities are expected to pause in the short to medium term, say analysts. The outlook is influenced by multiple factors, including rising oil prices, actions from global central banks, climbing bond yields, and the dollar index gaining prominence. "Valuations appear rich with the markets at record highs.
The Rs 702-crore IPO received bids for 2,93,41,84,140 shares against the total issue size of 2,32,59,550 shares, according to data available till 3.30 pm on Wednesday.
CEO Rana Kapoor said no such discussion or proposition has ever transpired.
Equity benchmarks snapped their six-session rally to close marginally lower on Thursday amid profit booking in banking and energy counters. Investors also stayed on the sidelines ahead of the RBI's policy meet outcome on Friday. In choppy trade, the 30-share BSE Sensex ended 51.73 points or 0.09 per cent lower at 58,298.80. During the day, it hit a low of 57,577.05 and a high of 58,712.66.
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