(Bloomberg) -- Before the trading day starts we bring you a digest of the key news and events that are likely to move markets. Today we look at:
- Indian startups standout
- Yen carry trade impact
- Regulatory actions
Good morning, this is Alex Gabriel Simon, an equities reporter in Mumbai. Nifty futures are pointing to a sharp cut this morning as Asian equities get swept up by Friday’s selloff that roiled trading around the globe and spurred a flight away from risk assets. Well, local shares have had it coming for a while now, given the Nifty’s furious advance. What remains to be seen is whether the risk-off mood dampens the impulse to buy the dip that’s supported the market for months. Meanwhile, the RBI’s interest rate decision and inflation data will guide trends in bonds.
India’s tech startups standout amid global meltdown
While the global tech selloff is affecting a wide swath of players from chip suppliers to social media companies, India’s new-age tech firms are proving to be an exception. On Friday, Zomato soared after beating analysts estimates for its first-quarter earnings. Nykaa is poised to report a profit jump, while Paytm’s net loss was lower than expected. Investors are focusing on these improvements, which could drive their stock prices higher.
Yen carry-trade unwind raises worries for India assets
Japan’s central bank surprised everyone by raising interest rates last week, diverging from most other monetary authorities. This strengthened the yen sharply against the dollar, raising concerns that Japanese investments in global risk assets might unwind. Indian equities, favored by Japanese investors, may get affected. Outflows from the $5 trillion stock market could weigh on the Indian rupee, which has fallen to successive record lows recently.
Regulatory moves rattle India stocks and bonds traders
Actions from tax authorities, security regulators, and the central bank have caused some ruffles. JPMorgan said it will more closely monitor liquidity in longer tenor Indian debt in its emerging-market bond index after authorities removed future issuance eligibility of the bonds. Stock brokers fear revenue loss as SEBI clamps down on equity derivatives speculation. Investors were confused when IT giant Infosys received and then had withdrawn a $3.9 billion tax notice.
Analysts actions:
- Aptus Value Housing Raised to Buy at DAM Capital; PT 365 rupees
- Bajaj Auto Raised to Buy at KR Choksey; PT 10,948 rupees
- Cipla Cut to Accumulate at KR Choksey; PT 1,633 rupees
- Dabur India Raised to Buy at Anand Rathi Securities
- Mahindra Raised to Buy at BOB Capital Markets; PT 3,279 rupees
- PSP Projects Cut to Reduce at Dolat Capital; PT 727 rupees
- Tata Motors Cut to Neutral at DAM Capital; PT 1,150 rupees
Three great reads from Bloomberg today:
- Big Take: Adani Unveils Succession Plan as Scrutiny Persists
- Rupee Set to Keep Tiptoeing to New Lows as Policy Pivot in Focus
- Japan’s Topix, Nikkei Stock Gauges Tumble 20% From July Peaks
And, finally..
Companies in India are gearing up for increase in share buybacks in the coming weeks before new tax rules on repurchases take effect on Oct. 1. At least 11 firms have or are set to approve share buybacks shortly after the new regime was proposed in the budget on July 23. Tax incidence on shareholders on higher income slabs are set to go up under the new policy.
--With assistance from Chiranjivi Chakraborty, Ronojoy Mazumdar and Ashutosh Joshi.
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