(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:
- SEBI’s F&O decision
- Boost to power transmission
- Banks to feel the heat
Good morning, this is Chiranjivi Chakraborty, an equities reporter in Mumbai. The Nifty looks set to cap a sixth straight quarter of gains, the longest winning run in three years. Still, the opening trade this morning could be less enthusiastic, with Asian markets mixed. Investors will also await the outcome of the market regulator’s much-awaited board meeting later Monday.
SEBI’s F&O decision looms
SEBI is likely to introduce stricter rules for retail investors trading in futures and options. A recent study by the regulator showed that nine out of 10 traders lost money dabbling in derivatives, often to technologically sophisticated high-speed trading firms. If these measures are implemented, they could have a widespread impact across the equity derivatives ecosystem, affecting stock exchanges, stock brokers, and traders alike.
$109 billion boost set to supercharge transmission
India has finalized a plan to spend 9.2 trillion rupees ($109 billion) on transmission infrastructure by 2032. The initiative aims to boost the network by 33% and double the substation capacity. Additionally, the project includes pumped storage projects to help stabilize the grid. According to brokerage Prabhudas Lilladher, companies like ABB India, Siemens Ltd, GE T&D, Voltamp, Apar, KEC, and Kalpataru are expected to be among the key beneficiaries.
Rate cuts may squeeze bank margins
The rally in lenders’ shares may not last beyond the next quarter, as net interest margins could soon come under pressure, according to Emkay Institutional Equities. Fed’s jumbo rate cut is likely to prompt the Reserve Bank of India to cut rates sooner than planned. If that happens, most major banks could see their margins narrowing by the fiscal fourth quarter. The report also pointed out that the gains in the shares have been partly driven by this sector appearing cheaper compared with most other overvalued segments.
Analysts actions:
- Marico Raised to Add at Emkay Global; PT 775 rupees
- Crompton Greaves Raised to Buy at Prabhudas Lilladher; PT 536 rupees
Three great reads from Bloomberg today:
- Chinese Stocks Soar Most Since 2015, Heading for Bull Market
- Israel Sees Paralyzed Hezbollah as Lebanon Fears What’s Next
- Big Take: Harvard Paid Out a Fortune and Lost Its Investing Edge
And, finally..
Indian equities have been reaching new record highs, but there’s a growing argument that they might start underperforming compared to Chinese stocks. China’s stimulus blitz has had a big impact, with the MSCI China gauge jumping over 16% last week. This marked its biggest outperformance over Indian shares since 2007.
--With assistance from Ashutosh Joshi and Alex Gabriel Simon.
©2024 Bloomberg L.P.
