Climate Swings Could Spoil Your Cup of Coffee

(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:

Good morning, this is Ashutosh Joshi, an equities reporter in Mumbai. There’s no respite for the bulls, with Nifty futures pointing to a weak start despite the firm trend in Asian markets. Foreign investors continue to dump local equities as the broadly disappointing September-quarter earnings season enters its final stretch. The focus will be on banks and automakers as SBI, Tata Motors report results. Vedanta is the other key earnings to watch out for.

Top investor pulls back on stock purchases

India’s largest institutional owner of public equities is starting to trim positions as pricey valuations make it harder to stay invested. Life Insurance Corp.’s holdings in NSE-listed companies dropped to a record low of 3.6% in value terms in the September quarter, data by primeinfobase.com shows. The insurer pared stakes holdings in consumer-focused companies like Tata Consumer Products, Voltas and P&G Hygiene. In a market highly dependent on domestic liquidity, LIC’s cautious approach could further demoralise bulls.

Trent’s revenue miss dents investor confidence

Trent’s shares have had a spectacular run this year, outperforming most of the world’s big retail stocks at one point, but it looks like the slowdown is finally catching up. On Thursday, the stock closed at a three-month low after the value retailer’s September-quarter revenues missed estimates for the first time in three years. Shares are now down over 20% from their peak and have fallen below the 100-day moving average. Still, analysts at Morgan Stanley remain optimistic, expecting the stock to outperform the benchmark index thanks to the company’s robust business model.

Climate swings could spoil your cup of coffee

Coffee prices have have come off this month after hitting their highest levels in over two decades, but forecasting trends is proving to be tricky even for the top beverage makers in the country. In its earnings call, CCL Products said that climate-related changes are causing unpredictable price swings. Still, the company expects prices to stabilize by 2025 as supplies improve. The good news? coffee consumption remains steady, unaffected by these price shifts. Meanwhile, CCL shares have gained 20% over the last six months.

Analysts actions:

Three great reads from Bloomberg today:

And, finally.. 

Indian stocks might be in a funk but the country’s offshore rupee bond market is set for a bright finish to the year. Investors have net bought more than 420 billion rupees ($5 billion) of such securities from issuers like the World Bank and the Asian Development Bank so far in 2024. That’s almost twice last year’s tally, and has already beaten the full-year record set in 2017, data compiled by Bloomberg show. The market is benefiting from a surge in demand for Indian assets on bets that the currency will weather dollar shocks and be less volatile than other emerging-market peers.

--With assistance from Malavika Kaur Makol.

©2024 Bloomberg L.P.