(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:
- Beneath the calm
- RBI rate cut bets
- Edutech stars shine
Good morning, this is Alex Gabriel Simon, an equities reporter in Mumbai. Nifty futures signal a firm start this morning after the index scaled a new high Friday. Global funds have piled back into local shares with gusto and risk appetite remains unabated. Bulls seem determined to take the Nifty past the 26,000 mark this week.
Market calm masks the chaos beneath
Intraday volatility is becoming more common in Indian equities. On Friday, traders were left puzzled when the Nifty dived 300 points in just eight minutes — marking the second such instance of a rapid selloff this month. The index bounced back, rising 375 points to close 1.5% higher, underscoring the willingness of fence-sitters to jump in on every dip. As the $5 trillion market expands in size, these swings may become the new norm. It’s no surprise, then that the NSE’s 30-day volatility gauge rose by 2.6% on Thursday, after falling by 7%.
Traders bet on RBI rate cut as festive season nears
Last week’s rally in rate-sensitive sectors — like non-bank lenders, real estate, and automobile stocks, suggests that the market is betting on the Reserve Bank of India following the Fed’s lead and cutting interest rates as early as next month. With some high-frequency economic indicators showing signs of easing, investors seem to be urging the RBI to give consumption a boost in time for the festive season.
Edutech stars keep shining
Edutech sector continues to attract strong investor interest, despite troubles at Byju’s, once one of India’s most promising startups. Just last Friday, the unlisted Physics Wallah raised $210 million in fresh funding, doubling its previous valuation and now sitting at $2.8 billion. The sector’s outlook remains promising, with listed companies like Shanti Educational and Career Point more than doubling in value this year.
Analysts actions:
- Bajaj Auto Reinstated Sell at Nirmal Bang; PT 8,933 rupees
- Mankind Pharma Rated New Buy at Avendus Spark; PT 3,035 rupees
- Astral Raised to Buy at Avendus Spark; PT 2,300 rupees
Three great reads from Bloomberg today:
- Stock Market Mania Takes Hold Deep in Hinterlands of India
- Powell’s Pivot Is Finally Paying Off for Bond Market’s Big Trade
- Big Take: London ‘Wealth Drain’ Takes Shape as UK Tax Fears Grow
And, finally..
The rupee just capped its best weekly gain of the year, thanks to the US Fed’s super-sized rate cut, which sparked a risk rally on bets that it will drive more inflows into emerging markets like India. The rupee may climb to 82 per dollar by year-end, up from 83.5750 on Friday, according to Maybank. However, it’s unclear if the central bank will let the currency strengthen much more, as it seeks to preserve the nation’s trade competitiveness.
©2024 Bloomberg L.P.
