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India Sensex, Nifty 50 Set New Record But Consumer Stocks Sit Out Market Rally

(Budget documents)

(Bloomberg) -- Before the trading day starts we bring you a digest of the key news and events that are likely to move markets.

Good morning, this is Ashutosh, an equities reporter in Mumbai. The market is due for a breather after the Nifty 50 set another record Tuesday. The regional backdrop is supportive following fresh highs for US equities. All eyes now are on the earnings season, with IT majors TCS and HCL Tech reporting this week. 

Consumer giants miss out on market rally 

Stocks are at a record high, but consumer majors like ITC, Hindustan Unilever, Nestle India and Asian Paints, haven’t joined the party. Their shares are all down so far this year. Everyone’s hoping the government will increase spending to boost consumption, especially in rural areas, but investors are playing it safe until they see what’s in the budget.

India-Russia nuclear deal buzz may boost some sector stocks 

India’s nuclear power sector is back in the limelight after eons. According to a report by Tass, the country is in talks with Russia’s state nuclear company Rosatom to build six nuclear units at a power plant. This is fueling expectations of increased business for companies such as Hindustan Construction. With India renewing its focus on the sector, the shares of HCC, Kirloskar Pneumatic and Walchandnagar Industries are likely to remain in spotlight.

Mutual funds continue to rake in record amounts of cash

Industry assets reached a new peak of $730 billion in June, up almost 4% from a month ago. Individual investors, with over 153 million accounts, hold more than half of these assets, marking the 40th straight month of flows into equity funds. The strong investor sentiment has fueled a surge in the shares of listed mutual fund companies, with gains exceeding 20% this year. The trend has even prompted Canara Robeco to explore an initial public offering.

Analysts actions:

  • Ashok Leyland Cut to Accumulate at Prabhudas Lilladher
  • Bajaj Electricals Cut to Hold at Systematix Shares & Stocks
  • Bharat Forge Cut to Hold at Prabhudas Lilladher; PT 1,615 rupees
  • Hero MotoCorp Cut to Accumulate at Prabhudas Lilladher
  • NEW DEAL: Tata Capital Housing Plans to Sell at Least INR3b Bond
  • TVS Motor Cut to Hold at Prabhudas Lilladher; PT 2,300 rupeesADD

Three great reads from Bloomberg today:

  • Putin Is Meeting a Lot of World Leaders for a Global ‘Outcast’
  • JPMorgan Hikes BYD’s Price Target by More Than 80% on Outlook
  • Expat Retirement Savings at Risk in Maze of Pension Transfers

And, finally.. 

New Delhi may further reduce its debt market borrowing from the previously budgeted 14.13 trillion rupees, according to projections from Goldman Sachs Inc. and State Bank of India. Goldman expects gross issuance to decrease by 500 billion rupees, while SBI anticipated a 600-billion rupees cut, my colleague Khushi Malhotra notes. This would please a market already expecting demand to exceed bond supply, and it would be a surprise given the fiscal demands from Prime Minister Narendra Modi’s two key allies. If this reduction occurs, yields are likely to decline.

 

--With assistance from Chiranjivi Chakraborty.

©2024 Bloomberg L.P.

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