(Bloomberg) --  

Before the trading day starts we bring you a digest of the key news and events that are likely to move markets.

Good morning, this is Ashutosh, an equities reporter in Mumbai. Nifty’s record-breaking rally may run into some resistance ahead of the monthly derivatives expiry and weak cues from Asian peers. That said, the index is set for a fourth week of gains and that puts it within striking distance of its 24,000 milestone.

Large buyer interest elevates smaller cement producers

The cement sector is buzzing with M&A activity, especially since the Adani Group jumped in. Over the past nine months, the conglomerate has bought four cement makers. Other big players like Ultratech and Shree Cement have the financial muscle to go on an acquisition spree, according to Jefferies analysts. This is giving a big boost to the smaller players, whose shares have risen an average of 9% this year — three times more than their larger counterparts.

Modest spectrum auction signals likely tariff hikes ahead

India’s $1.3 billion airwaves auction was lackluster, raising only a fraction of what it earned in the past. However, this doesn’t mean the rally in the nation’s three-player mobile wireless sector has peaked. Citigroup analysts expect the rest of the year to be “eventful” for Bharti Airtel and Vodafone Idea. The conclusion of elections and the spectrum auction could prompt players to explore tariff hike. 

Stock market rally overshadows monsoon woes

The record-setting rally have made investors overlook the erratic monsoon rains and their detrimental impact on economic growth. This month’s rainfall has been 19% below average, which is starting to raise concerns. The latest warning came from the RBI Governor, who said that just one severe weather event could drive up vegetables prices, leading to higher headline inflation.

Analysts actions:

  • Shree Cement Raised to Neutral at Goldman; PT 28,500 rupees
  • ACC Cut to Sell at Goldman; PT 2,500 rupees
  • Lupin Raised to Buy at Avendus Spark; PT 1,755 rupees
  • VIP Ind Rated New Buy at Sunidhi Securities & Finance Ltd
  • Zydus Lifesciences Raised to Reduce at Avendus Spark

Three great reads from Bloomberg today:

  • Blackstone, KKR, Warburg Embrace India—and See Surging Returns
  • Red Tape May Trip Up Global Funds Keen on India’s Debt Market
  • Big Take: Bill Hwang Tapes, Chats Reveal 72 Hours of Ineptitude

And, finally..

Shadow lenders are getting a lot of attention from investors because their stock returns are beating the broader market, my colleague Divya Patil notes. Big names like ICICI Prudential Life Insurance Co. and Edelweiss Asset Management Ltd. are snapping up the sector’s bonds thanks to attractive spreads. These last-mile financiers are thriving, with consumer demand remaining robust. 

--With assistance from Divya Patil.

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