(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:
- F&O reprieve
- Market intermediaries
- Metal pipe makers
Good morning, this is Chiranjivi Chakraborty, an equities reporter in Mumbai. Nifty futures point to a weak start this morning following losses in Asian markets. It doesn’t help that foreign investors are dumping local shares, presumably in favor of Chinese equities. The good news for bulls is crude oil prices remain subdued after falling sharply overnight.
SEBI raises F&O limits, offering relief to traders
After disappointing many with its recent equity derivatives curbs, the market regulator has offered traders some comfort. It raised the overall limit for trading members on stock indexes for the first time in over four years. The new cap is $892 million, or 15% of the total open interest, up from the $60 million limit imposed during the pandemic to curb volatility. This change is expected to give sophisticated firms more room to place larger bets on India’s booming equities.
Market intermediaries ride high on strong earnings
It’s been a banner year for investors in capital market intermediaries, including exchanges, stock brokers, and money managers. Angel One’s stronger-than-expected earnings for the September quarter have fueled hopes that the runaway gains in these stocks can sustain. HDFC Asset Management also delivered solid revenue performance, beating estimates for the first time in eight quarters. While markets often serve as a good lead indicator, they’re also prone to exaggeration in both good times and bad.
Price war heats up among pipe makers
Metal-pipe makers are locked in fierce competition after the recent decline in commodity prices. APL Apollo, the market leader, has used this opportunity to slash the prices of its premium products to capture market share from rivals like Jindal Steel and Tata Steel, according to Nuvama. APL Apollo’s shares have been relatively flat this year, but the company seems to betting that focusing on volumes, even at the cost of margins, may help it win back investor attention.
Analysts actions:
- PVR INOX Cut to Add at Axis Capital Limited; PT 1,720 rupees
- Voltas Raised to Overweight at Morgan Stanley; PT 2,035 rupees
- Angel One Ltd Cut to Sell at Avendus Spark; PT 2,450 rupees
Three great reads from Bloomberg today:
- Indian Tycoon Delivers a 98% Rally to Debt-Market Faithful
- Trump Defends Tariff Plan While Pressing for More Fed Influence
- Big Take: 165 Lawsuits Are Shaping the US Presidential Election
And, finally..
Foreign investors have been net sellers of local shares every trading session this month through Oct. 14, with total withdrawals exceeding $6.7 billion. The sales are on track for the biggest monthly outflow since the height of the pandemic in March 2020. Some of the selloff is partly fueled by a shift of investments to China and the waning earnings momentum in the South Asian country.
--With assistance from Alex Gabriel Simon and Kartik Goyal.
©2024 Bloomberg L.P.