(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:
- NSE’s IPO journey
- Mutual fund surge
- All eyes on RBI
Good morning, this is Chiranjivi Chakraborty, an equities reporter in Mumbai.
Nifty futures are pointing to a positive start on Monday after a bruising last week. A rally in Asian shares may help too. Traders will be watching for the Nifty 50 index to rebound from its 50-day moving average. Meanwhile, the central bank’s interest-rate decision later this week will guide the trend in bonds.
NSE clears key hurdles on its path to IPO
The National Stock Exchange of India recently settled a long-drawn unfair practice case with the securities regulator for $80 million, which removes another obstacle in the exchange’s journey to go public. This follows last month’s acquittal in a different unfair market access case. Plus, NSE’s valuation has almost doubled in the last six months, based on the deal prices listed on the exchange’s website.
Small cities spell big gains for mutual funds
Mutual funds continue to be a big draw for retail investors, and now they’re catching the attention of people in smaller cities too. According to Zerodha Fund House, the $790 billion industry added 23 million new investors in five months through August, with over half of them coming from smaller cities. This trend is likely to keep supporting shares of asset managers, with companies like Nippon India, Aditya Birla Sun Life, and UTI already seeing gains of over 40% this year.
Bond traders look to RBI for stance shift
Indian bonds have held up well this year, driven by their inclusion in the global debt index and as the outsized rate cut by the US Federal Reserve accelerated flows to emerging-market assets. Traders are hopeful that the central bank will ease its hawkish stance at Wednesday’s meeting, possibly paving the way for the next phase of the rally. Nomura Holdings Inc. even predicts that the 10-year bond yield may drop to 6.25% by March, down from 6.83% on Friday.
Analysts actions:
- Vedanta Reinstated Buy at ICICI Securities; PT 600 rupees
- Gujarat Petronet Cut to Neutral at Motilal Oswal Securities
- SBI Life Cut to Add at Emkay Global; PT 2,000 rupees
Three great reads from Bloomberg today:
- China Stock Skepticism Gets Louder Amid World-Beating Run
- Bond Traders Buckle Up for ‘No Landing’ After Jobs Surprise
- Big Take: ‘100%’ Yields Fuel a Retail Boom in Quick-Buck ETFs
And, finally..
The Nifty’s 14-day relative strength index — a measure of short-term market momentum — dropped to 40 on Friday after the benchmark gauge capped its worst weekly performance in two years. There’s a silver lining: this level has tended to be a rebound point for stocks since October 2023. Traders are optimistic that this will hold, especially after Wall Street’s strong rally on Friday.
--With assistance from Ashutosh Joshi and Alex Gabriel Simon.
©2024 Bloomberg L.P.