Ending of a selloff should by no means be read as a signal to buy stocks. India's midcap and smallcap stocks have tanked 50-70% in 2019 amid souring sentiment over defaults, corporate governance issues, liquidity squeeze and what not! In last five sessions, they are rebounding: Midcap index is up 3% and the Smallcap index 4%. There lies the catch: what looks like a recovery may turn out to be pre-mature optimism, because fundamentally key drivers needed to boost these stocks -- economic and corporate earnings recovery -- are both missing. Beware!
STREET PULSE: Where we stand Asian stocks rose on hopes for a thaw in US-China trade frictions and expectations that the ECB will kick off another wave of monetary easing by global central banks.
Read More  | SGX Nifty traded 41 points higher at 7 am (IST), signalling buoyancy ahead on Dalal Street. MSCI index for Asia-Pacific shares outside Japan rose 0.2%; Japan's Nikkei gained 1% and Australian shares 0.41%. |
| Overnight, Dow rose 227 points, S&P500 21.54 points and the Nasdaq 85.52 points |
Oil prices rose in Asia, rebounding from a tumble on Wednesday, on hopes OPEC members will cut output to support prices.
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Bonanza!... Investors can buy shares of Reliance Nippon Life Asset Management and SBI Life Insurance in the share sales by their promoters on Thursday and Friday as both stocks are trading at huge discount to their peers, say analysts. Reliance Nippon shares have rallied 40% in last two months but still trades at 35 times its trailing 12-month earnings as against HDFC AMC's Price to Earnings ratio of 56 times. SBI is selling 4.5% stake in SBI Life Insurance at a floor price of Rs 770 when analysts estimate the fair value of the stock at Rs 900-910 per share.
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| Adani bids for Rs 45,000 crore Navy sub project >>> |
| Airtel goes on up with Xstream Fibre >>> |
The Thaw… China on Wednesday said it would spare a number of US products from punitive tariffs in what is seen as an olive branch by Beijing in the protracted trade war ahead of high-level talks next month. However, the goods do not include big-ticket agricultural items that could be crucial to the ultimate success of any agreement between the two sides. US President Donald Trump agreed to delay an additional increase in tariffs on Chinese goods by two weeks at the request of China's Vice Premier Liu He "as a gesture of good will."
Read More Back to Basics… Sharp cuts in bank deposit rates in the last one year have prompted investors to sift a portion of their money to traditional products like government bonds and post office time deposits, which offer higher rates. Fixed deposit rates of top banks have fallen by an average 0.5-1% to 6.5-7.1%. In comparison, government bonds and post office deposits of longer durations are fetching about 7.5-7.75%.
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Big Selloff… Azim Premji and the promoter group of Wipro have sold stocks worth over $1 billion or Rs 7,300 crore in the buyback programme announced by India's fourth-largest IT services company. The bulk of the funds will likely be used to boost the philanthropic initiatives of India's most generous billionaire whose eponymous foundation is one of the five largest private endowments in the world and the biggest in Asia.
Read More Downgraded!... Credit Suisse has downgraded India to 'market weight' in its country model portfolio with the country falling to number 8th spot from 6th spot. The brokerage said global monetary easing will help India more than most Asian markets but the depth of the economic downturn is beginning to translate into EPS cuts just as consensus forecasts for previously hard-hit north Asian markets are stabilising.
Read More Meanwhile... The government is considering a fund that will provide guarantees for those who won't otherwise be eligible for a housing loan, allowing them to borrow funds to acquire a home, said a senior finance ministry official. It's being envisaged as part of a package being prepared by the government to help the housing sector, which is burdened by heavy debt, stalled projects and unsold homes.
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