(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 futures signal a firm start after a surge in private banks lifted the frontline indexes to new highs on Tuesday. Foreigners remain net buyers and that may keep the upward bias intact even as the broader market enters a consolidation zone after the recent rally. 

Goldman Sachs buy call lifts Tbo Tek amid debate over small caps

The Wall Street bank’s initiation of coverage on Tbo Tek Ltd. says a lot about investor appetite for smaller businesses, never mind the ongoing debates over their eyewatering valuations. The travel tech solutions firm’s stock surged over 17% in two days after a buy recommendation from Goldman, my colleague Chiranjivi Chakraborty notes. This mirrors the broader trend of global funds expanding their ownership of Indian stocks beyond the top-tier companies.

Demand for new paper shows no signs of slowing

Already one of Asia’s busiest venues for IPOs and secondary share sales, demand for new listings shows no signs of waning. Billions of dollars in fresh inflows every month are fueling intense competition for first-time share sales. At least four IPOs this month saw demand exceed 90 times the shares offered, including the recent one from furniture maker Stanley, my colleague Paresh Jatakia points out.

Water infrastructure investment set to gain momentum

With much of the country reliant on increasingly erratic monsoons, rising water stress threatens India’s resilience to shocks, according to Moody’s Ratings. Amid expectation of policy continuity, the sector is poised to attract investor attention despite ongoing concerns about the advance of the monsoon. Shares of companies such as Va Tech Wabag, EMS and SPML Infra have already surged more than 20% this month.

Analysts actions:

  • ICICI Bank Raised to Buy at Sushil Finance; PT 1,208 rupees
  • Adani Wilmar Rated New Hold at Investec; PT 374 rupees
  • Bharat Forge Cut to Reduce at Avendus Spark; PT 1,550 rupees
  • DLF Raised to Add at Avendus Spark; PT 900 rupees
  • JSW Infra Rated New Buy at Avendus Spark; PT 400 rupees
  • Oberoi Realty Cut to Sell at Avendus Spark; PT 1,600 rupees
  • Tata Motors Raised to Buy at ICICIdirect.com; PT 1,200 rupees

Three great reads from Bloomberg today:

  • Activist Investing Booms in Japan, Led by Elliott’s Successes
  • A $100 Billion Bet on China’s Economy Sours as Warehouses Empty
  • Star Quant Fund’s 38,650% Asset Jump Threatened by India Probe

And, finally..

Big banks are back in driver’s seat as key benchmarks chase new records. The NSE’s banking sector gauge has risen more than 3% above its pre-election peak. The rally has been led by HDFC Bank, the largest lender, which surged 13% in the past one month, while peer ICICI Bank crossed $100 billion in market value for the first time yesterday. This has pushed up the Nifty Bank Index’s ratio with the benchmark to its highest since January.

--With assistance from Chiranjivi Chakraborty and Paresh Jatakia.

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