(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:
- Infosys’ shares set for jump
- Poultry firms face pinch
- Infra bond sales hit record
Good morning, this is Alex Gabriel Simon, an equities reporter in Mumbai. It’s Friday, and the main indexes are poised to cap a seventh straight week of record gains. The run’s durability will be tested as the earnings season gathers pace, with index-heavyweight Reliance Industries reporting later today. Nifty futures indicate a firm start this morning, with traders eyeing 25,000-milestone for the benchmark before next week’s federal budget.
Infosys earnings signal tech revival, stock set for jump
Infosys’ strong earnings report, including a sales forecast increase and profit beating estimates, is fueling optimism about a revival in tech spending. The firm’s shares are set to jump at open after trailing the broader market’s gains in the past year. This optimism is reflected in the overnight surge of the company’s US-listed shares, which jumped over 8%.
Poultry firms pinched by rising ethanol production
India’s push to boost ethanol production for vehicles benefits sugar mills but has created a headache for poultry and starch companies. Higher corn demand from ethanol makers has driven up prices, hurting these firms’ profits. This has led to declines in the share prices of poultry firm Venky’s India and starch maker Gulshan Polyols and Gujarat Ambuja Exports this year, despite the record rally in equities, according to InCred Equities.
Equity issuance reaches $32 billion in first half
India remains one of the busiest markets for equity capital raising activity in Asia. In the first half of 2024, equity issuance, including block deals, reached $32 billion, with over half of the total coming from founders and private equity investors, according to Jefferies. Yet, MSCI India has handily beaten EM peers. This “well functioning” market not only supports the country’s economic growth but also indicates a higher availability of risk capital, which is critical, according to strategists including Mahesh Nandurkar.
Analysts actions:
- AIA Engineering Rated New Outperform at BNPP Exane
- Bajaj Auto Cut to Accumulate at KR Choksey; PT 10,948 rupees
- BPCL Affirmed at Baa3 by Moody’s
- Go Digit Rated New Buy at Citi; PT 425 rupees
- ICICI Lombard Rated New Sell at Citi; PT 1,575 rupees
Three great reads from Bloomberg today:
- Citigroup Sees India Luring $100 Billion in Foreign Investment
- A Stock Trader’s Guide to Modi’s Closely Watched India Budget
- Big Take: Zombie Retail King Targets Sports, Sees in 2026
And, finally..
The government’s commitment to upgrading infrastructure has benefited firms central to this transformation. The NSE’s gauge of infrastructure-linked shares is on track for a 10th month of gains, with Cummins India and Siemens India rallying over 75% this year. With next week’s budget expected to boost the sector, lenders have already raised about $4 billion via infra bonds this year, an all-time high for the period, data compiled by Bloomberg show. Another $1.8 billion is set to be raised on Friday, with an additional $1.2 billion approved.
--With assistance from Ashutosh Joshi and Divya Patil.
©2024 Bloomberg L.P.
