(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:
- Hyundai IPO
- Bank earnings
- China disappointment
Good morning, this is Ashutosh Joshi, an equities reporter in Mumbai. Nifty futures signal a positive start on Friday, tracking gains in most other Asian markets. US equities fell overnight following hotter-than-expected core inflation that reduces the probability of a jumbo rate cut by the Federal Reserve at its November meet. The earnings season started on a sober note with software bellwether Tata Consultancy Services missing analysts’ profit estimates.
Hyundai IPO in Focus
The excitement around India’s largest IPO is being dampened by evident weakness in demand for cars in India as well globally. Traders say the premium for Hyundai shares in the IPO grey market has halved over the last week to below 10%. The closely watched IPO ‘s success will be crucial to how investors respond to subsequent public offerings.
Banks’ earnings outlook remains dim
Bank stocks had a good day on Thursday, climbing 1%, making them the best performing sector. The bounce comes after a rough patch — a gauge of lenders fell 7% in the previous six sessions — and may not sustain. Analysts at Elara aren’t very optimistic about the upcoming September-quarter earnings. They expect ongoing pressure on net interest margins, a possible rise in defaults, softer loan growth, and deposit growth that’s below trend.
Another false dawn for steel stocks
Investors betting that China’s stimulus bazooka would boost steel demand are disappointed once again. Not only has the package been underwhelming, but there’s also been an increase in steel imports from China, according to Systematix. Out of 10 analyst ratings on Tata Steel issued this month, only one is a ‘buy’. JSW Steel fared slightly better, with three ‘buys’ ratings out of nine recommendations.
Analysts actions:
- Kotak Mahindra Cut to Hold at Nirmal Bang; PT 2,048 rupees
- Cummins India Cut to Sell at Goldman; PT 2,900 rupees
- ideaForge Rated New Add at IIFL; PT 801 rupees
Three great reads from Bloomberg today:
- China Investors Expect $283 Billion of New Stimulus This Weekend
- Tata’s Brother Among Contenders for Head of $165 Billion Group
- Big Take: Uber, Lyft Use Loophole to Deny NYC Drivers Millions
And, finally..
Retail investors can’t seem to get enough of equity funds. In September, they poured a record 245 billion rupees ($2.9 billion) into recurring stock investment plans, showing that the move of households’ savings into stocks remains an entrenched trend. While foreign investors fret over expensive valuations, individual investors don’t seem to share the same concern.
--With assistance from Alex Gabriel Simon and Kartik Goyal.
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