(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:
- Bulls lead small- and mid-caps
- Agrochemicals stocks miss rally
- Private credit helps small firms
Good morning, this is Chiranjivi Chakraborty, an equities reporter in Mumbai. Indian stocks look set to gain for a sixth straight day with Asian equities higher on further signs the Fed will cut interest rates. Small-cap stocks would be worth watching for any dips after a strong rally in the previous session.
Small- and mid-caps near record, Fed outlook key
Momentum is favoring the bulls in the small- and mid-cap segment, with both benchmarks just shy of their record highs. The relative strength index — a key indicator of market momentum — remains just above 60 for NSE’s small-cap and mid-cap indexes, indicating room for further gains before this space gets overheated. That said, global factors will be critical, as investors closely watch Federal Reserve Chair Jerome Powell’s speech on Friday.
Agrochemical stocks sit out bull market surge
Chemical stocks are among the few losers in India, with agrochemical makers facing challenges from falling crop prices and increased dumping from China. Jefferies notes that prices of major crops like wheat, corn and soybean have fallen about 20% in the past three months, driven by expectations of a bumper harvest and subdued demand in key markets. UPL is one of the worst performers, giving away more than 3% this year versus benchmark Nifty’s 14% gain.
Private credit surge boosts small firms
Smaller companies in India are enjoying a drop in their funding costs, thanks to more financing from private credit firms. The gap between the yields on rupee bonds of A rated companies and those of top-rated AAA firms has shrunk to the smallest in more than four years. This is good news for the economy since these businesses play a key role in driving growth and creating jobs.
Analysts actions:
- Allcargo Raised to Buy at Phillip Secs; PT 80 rupees
- IndiGo Raised to Buy at Jefferies; PT 5,225 rupees
- Tech Mahindra Cut to Hold at CLSA; PT 1,625.78 rupees
- Zydus Lifesciences Raised to Buy at KR Choksey; PT 1,439 rupees
Three great reads from Bloomberg today:
- Zomato to Buy Paytm’s Movie Ticketing Business for $244 Million
- Low Tax Is India’s Lure as Green Debt Misses Nation’s Bond Boom
- Boeing, Rivals Bet Billions Flying Cars’ Moment Is Now
And, finally..
Shares of new-age consumer tech firms are back in the spotlight, buoyed by the positive sentiment following Ola Electric’s big-bang listing. A custom index of 10 companies, including Zomato and other leading Indian start-ups, has gained about $20 billion in market value since the start of the year. Ola has reached a $7 billion valuation in just eight sessions, or half the market cap of two-wheeler maker TVS Motor Co., which has been listed for over two decades.
--With assistance from Divya Patil.
©2024 Bloomberg L.P.
