(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:
- Buy calls dwindle
- Coldplay craze
- Deutsche Bank eyes IPO boom
Good morning, this is Ashutosh Joshi, an equities reporter in Mumbai. Correction warnings are mounting, with stock valuations overstretched after both Nifty and Sensex hit record highs Tuesday. While robust flows make it hard to predict when the market will top out, analysts caution that future gains may be subpar.
Buy calls are slowly vanishing
India’s $5 trillion equity market is facing a peculiar challenge: while stock prices keep climbing, analysts remain cautious. As of Tuesday, only 61 stocks in the NSE Nifty 200 index have a consensus ‘buy’ rating, the lowest in at least a decade, data analyzed by Bloomberg show. The worry is that, in many cases, earnings growth not be able to keep up with the lofty valuations in one of the world’s priciest stock markets.
Coldplay fever to heat up India’s music stocks
If you need proof that digital streaming is transforming India’s music industry, look no further than the insane demand for British band Coldplay’s upcoming concerts in Mumbai. With 750 million smartphone users, India is a ‘sleeping giant’ when it comes to growing its paid music subscriber base, says Dalal & Broacha Stock Broking. That’s great news for stocks like Tips Industries and Saregama, which have already surged 92% and 43%, respectively, this year.
Deutsche Bank eyes a slice of IPO boom
Deutsche Bank joins other Wall Street majors in expanding its presence in India amid a surge of activity in the nation’s primary market. The German bank has tapped Apurva Mazumder, formerly a managing director at Mumbai-based advisory firm Moelis & Co., to spearhead its investment banking unit. India has become a hotspot for dealmaking, with companies raising about $9 billion via IPOs in 2024, data compiled by Bloomberg show.
Analysts actions:
- Astral Raised to Hold at CLSA; PT 2,025 rupees
- Cera Sanitary Raised to Neutral at YES Research; PT 8,809 rupees
Three great reads from Bloomberg today:
- China Cuts One-Year Rate, Withdraws Cash From Banking System
- Traders Boost Fed Bets With November Cut Size Seen as a Toss-Up
- Big Take: Xi’s Sudden Stimulus Push Is Missing One Key Piece
And, finally..
Stocks are now the most expensive since October 2021, based on one-year forward earnings estimates, data compiled by Bloomberg show. Local stocks have rebounded sharply following the election-related sell-off in early June. For investors, who have poured a lot of money into the market this quarter, this signals a potential warning that future gains in the MSCI India index may be limited.
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