(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:
- Telecom woes
- Semicon push
- Jewelers’ prospects
Good morning, this is Alex Gabriel Simon, an equities reporter in Mumbai. Asian stocks are benefiting from US easing. Nifty futures are indicating a lukewarm finish to the week. Mid- and small-cap stocks took a beating on Thursday, highlighting the cautious optimism for local risk assets following the Fed’s big rate cut.
Telecom stock plunge hits large investors hard
The selloff in wireless carriers on Thursday, triggered by the top court’s rejection of their pleas on dues, has raised concerns about the investments by prominent investors. Shares of Vodafone Idea, the smallest of the three telecom players in India, fell below the price paid by large investors, including GQG Partners, in an follow-on share sale earlier this year. The court ruling highlights the challenges in the sector and reignited fears of the industry reverting to a duopoly.
Semiconductor push boosts industrial gases sector
Semiconductor manufacturing is central to India’s aspiration of building a $500 billion electronics industry over the next decade. While the country has seen early success with companies like Tata Electronics planning to establish foundries, this also presents a big opportunity for the chemicals and industrial-gas businesses. According to Haitong International, Linde India is well-positioned to cash in on this growth. It’s no surprise the company’s shares have risen 40% this year.
Love for gold boosts jewelers’ prospects
India’s gold imports hit a new peak in August after the government cut the duty on overseas purchases in the latest budget. This is good news for jewelry firms, with demand expected to stay robust ahead of the festive season. Earlier this week, mid-sized jeweler P N Gadgil made its trading debut, soaring over 70% above its IPO price. Analysts at Emkay now anticipate a potential re-rating for its peer Senco, which has already rallied more than 80% this year.
Analysts actions:
- SBI Raised to Reduce at Avendus Spark; PT 764 rupees
- AMI Organics Rated New Buy at JM Financial; PT 1,965 rupees
- Federal Bank Raised to Add at Avendus Spark; PT 203 rupees
Three great reads from Bloomberg today:
- India’s Das Tames Volatile Rupee With $689 Billion Reserves
- Apple iPhone Hits Stores Without Its Highly Awaited AI Features
- Big Take: Who Kamala Harris Is, and What She’ll Do If She Wins
And, finally..
A gauge of state-run companies’ shares fell below the crucial 100-day moving average for the first time since March 2023 on Thursday, driven by a slide in defense stocks. The decline reflects the waning sentiment toward companies expected to benefit from Prime Minister Narendra Modi’s re-election. For instance, Hindustan Aeronautics is 25% off its July peak while Bharat Electronics, which is set to be added to the Nifty Index this month, has tumbled almost 20%.
--With assistance from Chiranjivi Chakraborty.
©2024 Bloomberg L.P.
