(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:
- Ambani’s AI shift
- Block deal bonanza
- Slowing GDP growth
Good morning, this is Alex Gabriel Simon, an equities reporter in Mumbai. We’re set to open higher this morning, with Asian stocks closing in on a fourth month of gains. The Nifty is aiming for its 12th straight day of gains, which would mark the longest winning run in at least two decades. Investors will be closely watching the country’s GDP and infrastructure output data due later today, as well as the MSCI rebalancing, which Nuvama Wealth Management expects to attract $4 billion in inflows.
Nvidia’s dominance inspires Ambani’s AI pivot
Mukesh Ambani sounded more like a tech visionary than an old economy leader at Reliance’s shareholder meeting on Thursday. AI was front and center, with Ambani mentioning the acronym over 80 times in his speech, while promising AI to touch every part of human life. This shift to becoming an AI-driven conglomerate comes at the perfect time, with chip giant Nvidia Corp. taking center stage in the global stock market. The pivot could help Reliance get the best possible value for its Jio unit. Although Ambani didn’t spill any details about the much-anticipated listing of the telecom and retail arms, the announcement of a one-for-one bonus share issue minutes before the meeting gave investors a reason to smile.
Indigo deal adds to block deal bonanza
Rakesh Gangwal, the billionaire co-founder of IndiGo, sold nearly $1.3 billion of shares in the airline’s operator, adding to the flurry of block deals that’s made India a hotbed of capital raising globally this year. New listings and secondary share sales have brought in almost $34 billion this year, 25% more than in 2023, as shareholders cash in on the market boom that has pushed equity benchmarks to record levels. Rising stocks are boosting a sense of wealth, and that’s fueling further stock gains. It’s a virtuous cycle that could keep driving markets higher.
Slowing GDP may lead to bond market boost
A GDP report due later today is expected to show that economic growth slowed to below 7% in the June quarter, making the slowest pace in over a year. A big miss on growth could start to change the conversation on the RBI’s likely rate path. Until now, inflation has dominated the discussion, but if concerns about growth gain traction, Indian bonds might continue to add to their recent gains. Goldman Sachs Group Inc. has already trimmed its GDP forecast for 2024
Analysts actions:
- Ola Electric Rated New Buy at ULJK; PT 159 rupees
- Aurobindo Pharma Cut to Add at Axis Capital
- Steel Authority Raised to Reduce at YES Research; PT 112 rupees
Three great reads from Bloomberg today:
- Stock Mania Sucking Cash From Banks Threatens India’s Growth
- India Clears Singapore Investment in Key Step for Airline Merger
- Big Take: Japan’s Vast Natural Gas Empire Is Raking In Billions
And, finally..
The ample liquidity in the banking system has brought good news for the government. On Wednesday, sovereign borrowing costs dropped to the lowest in nearly two years, with the 364-day treasury bill selling at 6.72%. Banking liquidity is now in surplus by 883 billion rupees, compared with a deficit of 3.2 trillion rupees in January. This surplus could continue to boost demand for government securities, keeping borrowing costs benign in the coming weeks and months.
--With assistance from Ronojoy Mazumdar, Ashutosh Joshi and Chiranjivi Chakraborty.
©2024 Bloomberg L.P.
