(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:
- Nifty’s sudden surge
- Micro-cap listings
- RBI rate cut uncertain
Good morning, this is Alex Gabriel Simon, an equities reporter in Mumbai. A decisive jump to a new record yesterday, along with the positive backdrop of global peers, has set the stage for another day of advance for the Nifty. Bulls seem determined to cap the week on a high, and have their eye on the 25,500 mark.
Nifty’s sudden surge catches call writers off guard
Thursday’s unexpected late rally was a cruel reminder of the perils of being complacent. The Nifty, which had been moving in a narrow range, suddenly surged past the 25,000 mark after 2 p.m. local time and even hit an intraday record of 25,433.35. The one-way surge, led by a near $1 billion of purchases by global funds, took traders betting on a quiet week by surprise. Those who had written call options at the 25,000 and 25,500 strikes “were culled,” said Tejas Shah of Equirus Securities.
Regulator eyes tighter rules to cool tiny IPO craze
India’s market regulator is considering tighter oversight on micro-cap firms going public. This could include keeping a closer eye on how they use their funds and enforcing stricter checks on the bankers who help them list, according to a person involved in the discussions. SEBI is also considering requiring these firms to show a longer track record of profits and a greater scrutiny of their financial statements. The likely changes come as concerns about accounting frauds in this space. The rush around these tiny IPOs might slow if tougher rules are introduced.
RBI rate cut uncertain as inflation creeps up
The last headline inflation reading before the RBI’s Oct. 9 policy decision came in slightly higher than expected, at 3.65% versus the 3.44% forecast in a Bloomberg survey. The central bank expects price pressures to rise a bit going ahead, after recently benefiting from some statistical quirks. That’s why few in the market are predicting a rate cut next month, even though the US Fed is expected to embark on its easing cycle.
Analysts actions:
- Cummins India Rated New Underperform at BNPP Exane
- Nykaa Cut to Sell at Kotak Securities; PT 190 rupees
- Bharti Hexacom Raised to Buy at Jefferies; PT 1,600 rupees
Three great reads from Bloomberg today:
- Over Half of BOJ Watchers See Next Rate Hike Coming in December
- India’s Homeowners Are Now Slumdog Millionaires: Andy Mukherjee
- Hong Kong’s Battered Property Market Lures Chinese State Buyers
And, finally..
India’s 10-year bond yields closed below 6.85% following a global rally in debt. However, there may not be many factors to push them much lower. Those who’re already bullish might focus on inflation staying below the RBI’s 4% target for a second month, helped by oil prices dropping below $70. Still, without clear signs that the central bank will cut rates, most investors are cautious. Thursday’s inflation report is unlikely to strongly affect the market’s direction.
--With assistance from Ronojoy Mazumdar.
©2024 Bloomberg L.P.
