(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:
- Swiggy in favor
- Asian Paints’ woes
- Bangladesh + 1
Good morning, this is Alex Gabriel Simon, an equities reporter in Mumbai. Bulls are on the backfoot as Nifty futures point to decline amid a flattish trend in key Asian markets this morning. A resumption in foreign fund selling combined with the weak macroeconomic picture too is weighing on the mood. Realty stocks are defying the gloom, with an NSE gauge tracking sector up nearly 20% over the last month as demand for homes remains strong.
Zomato set for inflows, but Swiggy stuns with post-IPO rally
Food-delivery firm Zomato is set to receive a $500 million inflow from index funds as it joins the BSE Sensex starting next week, according to Nuvama. With the stock having doubled since February, traders are now turning their attention to Swiggy. While Zomato leads when it comes to cash flows, its money-losing rival appears to be scoring higher where sentiment is concerned. This partly explains the 53% surge in Swiggy’s share price since its listing last month — a remarkable comeback by a stock that was expected to struggle on debut.
Top paintmaker loses sheen
Circa 2024 has been tough for many industry players, as reflected in the share price performance of Reliance Industries, DMart, Maruti Suzuki, and Asian Paints. Of the lot, Asian Paints has fared the worst, with a 30% decline, and is set to trail Bloomberg’s global gauge of basic materials by record margin. Competition from Grasim is hurting and a broader macro slowdown has made matters worse. Only 10 of the 39 analysts tracking the stock have a buy rating. Trudence Capital sees a glimmer of hope in the company’s decision to focus on the entire home building ecosystem, a strength that its rivals lack.
Bangladesh +1 may help Indian textiles firms
Things are expected to improve for India’s textile industry in the fiscal year starting April, according to Systematix. While the nation missed out on the China +1 strategy due to poor infrastructure, the recent political turmoil in Bangladesh has forced big brands to look for alternative supply chains. India’s political stability is an advantage, but the key challenge remains the preferential tariff Bangladesh enjoys in EU markets. That gives it a huge price advantage over India.
Analysts actions:
- Hyundai Motor India Rated New Buy at YES Research
- Sunteck Realty Rated New Buy at Dhanki Securities; PT 748 rupees
- Swiggy Rated New Buy at Axis Capital Limited; PT 640 rupees
Three great reads from Bloomberg today:
- Rio and BHP take next step in building ‘green’ iron-making plant
- Brazil’s real weakens to all-time low as selloff deepens
- China may keep trying to spur consumption without big stimulus
And, finally..
The trade-deficit shock couldn’t have come at a worse time for the rupee, as the gap between exports and imports widened to a record $37.8 billion in November. That provides more ammunition for the rupee bears. Nomura Holdings predicts the currency falling to 85.60 per dollar in the next quarter. While this is bad news from a macroeconomic perspective, export-oriented industries like IT could benefit, making them attractive to stock market bulls.
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--With assistance from Kartik Goyal and Alex Gabriel Simon.
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