(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:
- Trump win beneficiaries
- Money wall wavers
- Realty’s reality check
Good morning, this is Ashutosh Joshi, an equities reporter in Mumbai. Nifty futures are little changed, suggesting a flat start for local stocks. There’s caution as investors await the outcome of a tight US Presidential elections. The Fed’s rate decision later this week will also be closely watched. For now, Monday’s selloff, which pushed the Nifty below the crucial 24,000 mark, has left investors on the edge.
Auto, solar, chemicals stocks eye Trump win
Shares of auto ancillaries, solar panel producers, and chemical makers are facing a tough time right now as earnings outlook for these industries take a hit. However, there may be a reprieve, depending on the verdict of the closely contested US Presidential elections. JM Financial suggests that if Donald Trump wins, it could give these industries a boost. Trump’s plan to raise tariffs on Chinese companies would allow Indian firms to price their exports to the US more competitively, creating a potential an opportunity growth.
Money wall’s strength put to the test
The common belief that the abundant local liquidity can offset any amount of foreign investors’ selling pressure is facing a reality check. Recently, local institutions have slowed their buying activity, and in fact, were net sellers during Friday’s symbolic Muhurat trading session. Although mutual fund managers aren’t immediately concerned about a drop in inflows from monthly investment plans, there’s concern that further declines in the stock market may turn the virtuous cycle of rising inflows and stock prices to a vicious one — with falling stock prices leading to outflows.
Perils of overownership haunt realty stocks
Real estate stocks were the worst performers on Monday, with the sector index tumbling 3%. Since reaching a record high in June, the index has now shed 15%. Even though major developers posted strong September-quarter numbers, investors seem to have two big concerns. First, there’s worry that the property market might not be as insulated from economic slowdown as hoped. Second, institutions already hold 21% to 36% stakes in the top five real estate companies, so there’s uncertainty about where the next wave of big buyers will come from.
Analysts actions:
- Jindal Stainless Rated New Buy at Anand Rathi Securities
- Lupin Raised to Add at HDFC Securities; PT 2,440 rupees
- Pfizer Ltd Raised to Buy at Systematix Shares & Stocks
Three great reads from Bloomberg today:
- OpenAI Wants To Become For-Profit Company
- Big Take: How the World Is Prepping for a Trump or Harris Victory
- Hedge Fund Basis Trade Faces Scrutiny as Regulators Mull Probe
And, finally..
Global funds net sold more than $10 billion worth of Indian shares in October, swayed by a combination of pricey valuations, slowing economy and a renewed interest in Chinese equities. As foreign outflows picked up pace, the benchmark NSE Nifty 50 Index lost 6.2% in October, its worst monthly performance since March 2020.
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