Global market-cap has risen by $6.38 trillion to $76 trillion in a tough 2019 so far. This may suggest equities remain healthy. But the fact of the matter is, unless corporate earnings improve and some money moves back to equities from bonds, stocks could soon face a rout. Bonds and stocks are yielding very different returns in the developed world, and this gap may be pointing to a likely global recession, which can rout equities.
STREET PULSE: Where we stand Stocks in Asia extended gains as hopes for stimulus in major economies tempered anxiety about a global recession, helping boost riskier assets and drawing money from safe-havens such as bonds and gold.
Read More  | SGX Nifty looked dull, down 16 points at 7 am (IST). MSCI index for Asia-Pacific shares outside Japan gained 0.04%, while Japan's Nikkei rose 0.47%. |
| Wall Street shares climbed overnight. Dow rose 250 points, or 0.96%, the S&P500 34 points, or 1.21%, and the Nasdaq 106 points, or 1.35%. |
Crude oil prices slipped this morning, but losses were limited as stocks rallied and traders hoped Sino-US trade tensions would ease. Brent crude slipped 3 cents, to $59.71 a barrel while WTI crude fell 15 cents to $56.06.
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Zee Money Coming... Subhash Chandra's Essel Group will repay about Rs 2,600 crore to mutual funds this week out of Rs 4,200 crore it raised by selling 11% in Zee Entertainment to Invesco Oppenheimer. NBFCs will get Rs 1,100 crore. Six fund houses have Rs 6,300 crore exposure to Essel Group entities, whose cash-strapped promoters had entered an agreement with mutual funds buying time till September 30 to repay debt. Read More
| Lower base and good rains may revive auto demand in H2, says Maruti chief. >>> |
| Debenture redemption reserve norms for listed firms, NBFCs, HFCs eased. >>> |
Less Taxing News... A high-level govt task force on direct taxes has proposed a rethink on tax brackets, including tax changes that could provide relief to middle and upper middle class; a 25% rate for both domestic and foreign firms, a review of income-tax surcharges and a regime that encourages startups.
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Low-hanging fruits that could be rotten...
"Buying the dip" is unlikely to be a rewarding for India equity investors just yet. Earnings downgrades continued for India Inc post June quarter earnings amid a demand slowdown, tepid economic growth and analysts' over-optimism with their estimates. And analysts say they do not see any respite anytime soon.
Read More | Rupee tumbles 29 paise to hit an over six-month low of 71.43 against dollar. >>> |
| Bundesbank says German economy in a recession and is shrinking. >>> |
Fresh Trouble!... In further trouble for NBFCs, their loan growth slipped into the negative territory with a nearly 2 per cent de-growth in June quarter, shows an analysis by Credit Suisse. This was attributed to a moderation in vehicle loans. Wholesale loans have started to deteriorate and as much as 10-11% of these have turned NPAs at some NBFCs.
Read More Meanwhile... A leading lobby of FPIs has proposed that the government should use the information on ultimate beneficial owners to target individuals rather than broadbased entities while imposing the higher tax surcharge. It says taxing individuals in a certain category of funds should be possible with the increased KYC requirements on ultimate beneficial owners.
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