As much as 83% of stocks that are part of S&P BSE Smallcap index are down more than 30 per cent from their peak prices in last 18 months. Whenever the index has corrected in excess of 30%, it has bounced back strongly and delivered 20% compounded return in next three years. Does it mean you should rush to smallcaps on first signs of a rebound? Wait, it may take time for history to repeat itself, or may not do so. With no signs of earnings recovery, it may be a long haul before this pocket sees a broadbase revival.
STREET PULSE: Where we stand Asian shares tracked global peers higher while safe-haven bonds sold off as signs that Sino-US trade hostilities might ease helped restore investor confidence after the Monday's rout.
Read More  | SGX Nifty looked upbeat, up 60 points at 7 am (IST). MSCI index for Asia-Pacific shares outside Japan inched up 0.2% after dropping 1.3% the previous day. Kospi added 0.8% and Nikkei 1%. |
| In overnight trade on Wall Street, equity indices finished sharply higher, reversing course from Friday's selloff. Dow rose 1.1%, or 270 points; S&P500 gained 1.1% higher and the Nasdaq 1.3%. |
Oil prices rose after President Trump said he expected to sign a trade deal with China, calming nerves after a round of tit-for-tat tariff hikes had sent markets reeling. Brent futures gained 27 cents to $58.97 a barrel while WTI crude rose by 23 cents to $$53.87.
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Windfall!... RBI's central board has accepted the recommendations of the Bimal Jalan Committee on capital transfer and decided to pay Rs 1.76 lakh crore to the government for this financial year, ending nearly a year of conflict between the regulator and its only shareholder on the quantum of dividend payout and paving the way for the government to meet its fiscal deficit target for the year. This also ends the discretion enjoyed by RBI's board on payouts, which will now be based on a formula.
Read More | Govt may soon relax FDI norms in single-brand retail and digital media >>> |
| Gold crosses Rs 40,000 mark for the first time >>> |
Signs of thaw?... US President Donald Trump said the prospects for a deal with China are better now than at any time since negotiations began last year. Speaking at the G7 meetings, he said China called "our trade people and said let's get back to the table." He said "anything's possible" when asked if he would delay tariff increases on China. Chinese Vice Premier Liu He said China was willing to resolve the trade dispute through "calm" negotiations.
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Trust Deficit: Risk aversion among investors for 'AAA' rated NBFC paper remained high given the rising defaults. Spreads on five-year AAA rated NBFC paper is at least 80 basis points higher than what it was since the IL&FS crisis in September last year, indicating that the pace of normalisation for non-bank lenders has been a long haul and aversion continued towards trusted market instruments despite RBI reducing rates by 110 basis points in the past year.
Read More | Rupee tanks 36 paise to 72 to the dollar for first time in 9 months >>> |
| Spectrum sale, including that of 5G airwaves, may be pushed back to early 2020 >>> |
Growth pangs... The Indian economy may have grown at a median rate of 6 per cent during the first quarter of this financial year against 8.2% expansion in the April-June period of 2018-19, a Ficci Economic Outlook Survey showed. NSSO's recently-released unemployment numbers by reaffirm the grim situation with regard to employment, it said.
Read More Meanwhile... A remittance scheme for transferring funds abroad has caught the attention of the Special Investigation Team probing black money over suspicion that it is being misused by HNIs to evade tax. The SIT has suggested scrutiny of returns of those HNIs who have availed the liberalised remittance scheme to ensure the income earned outside India from funds transferred offshore is duly disclosed.
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