(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. Momentum signals more gains for our market after the Nifty 50 closed at a record high for a fifth day yesterday. The risk-on mood continues amid positive global cues, and there appears to be no desire locally to give up on a rally that’s getting long in the tooth. 

MNCs rush: block deals highlight expensive Indian equities

For a sign of how expensive Indian equities have gotten, look no further than the rush of multinational companies selling stakes in their Indian units. Today alone, we have four block deals lined up, including Vodafone’s $2 billion sale of Indus Towers stake. Over the weekend, Hyundai Motor filed for an IPO of its local unit, joining MNCs like including Whirlpool Corp. and British American Tobacco in cashing in on high valuations. With mutual funds flush with cash and eager to snap up more shares, demand isn’t a problem for now.

Retail trading frenzy in equity derivatives on regulatory radar

India’s booming derivative markets continue to worry the authorities. The RBI and the securities regulator are monitoring equity futures and options segment, where trading volumes are larger than the nation’s nominal GDP, Governor Shaktikanta Das said at an event Tuesday. The Sebi recently proposed new rules to eliminate low-turnover stock derivatives to curb market manipulation, and is considering a series of tweaks to its derivatives trading rules, according to local media reports.

More ETFs needed to harness global money flow to India

With India aiming to become Asia’s new growth engine after China, more overseas ETFs are being created to invest in our stock market. However, inflows into local passively-managed funds still trail behind China’s. ETFs in India hold about $88 billion in assets, compared to nearly $400 billion for those listed in China. This year, flows to India ETFs this year could more than double to $15 billion from 2023, highlighting the growing appeal of local assets, according to Bloomberg Intelligence Senior ETF Analyst Rebecca Sin.  

Analysts actions:

  • FSN E-Commerce Vent Raised to Buy at Dolat Capital; PT 205 rupees
  • Vedanta Raised to Buy at IIFL; PT 525 rupees

Three great reads from Bloomberg today:

  • JPMorgan Index Listing Fuels $40 Billion Rush Into Indian Bonds
  • From Texas to Kolkata, the Era of Super-Wild Weather Is HereADD
  • AI Anchors Are Now Delivering News to Indian Farmers: Tech Daily

And, finally..

We are 10 days away from Indian sovereign bonds getting added to JPMorgan’s flagship global bond index, the first major index to add the nation’s debt. While India was not immune to a bout of risk-off sentiment hitting emerging markets a couple of months ago, the flows are back as the go-live date at the end of this month approaches, my colleague Ronojoy Mazumdar notes. Net flows to sovereign bond since JPMorgan’s September announcement are now up to $10 billion.

 

--With assistance from Ronojoy Mazumdar.

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