Investors are clearly itching to buy beaten-down stocks on signs of bottoming out of the market. One must not lose sight of the fact that the market tends to see a lot of rotation across sectors and stocks at such points. New winners would emerge as money rotates across ideas. Something that performed very well earlier would start to moderate. Those who have mastered this will make money.
STREET PULSE: Where we stand Asian shares rose and US stock futures edged higher after the US Fed cut interest rates as expected to keep economic expansion on track.
Read More  | SGX Nifty traded 46 points higher at 7 am (IST), signalling buoyancy ahead on Dalal Street. MSCI index for Asia-Pacific shares outside Japan was up 0.2%. Japan's Nikkei stock index rose 0.41%, but Australian shares fell 0.24%. |
| Dow Jones swung between gains and losses after the Fed rate cut, before ending 115 points higher. S&P500 added 9.88 points and the Nasdaq 27.12 points |
Oil prices fell for a fourth day on Wednesday, extending losses after a surge in US inventories surprised investors, overshadowing an interest rate cut by the Federal Reserve. Brent crude futures slipped 6 cents to $60.55 a barrel, while WTI crude futures fell by 16 cents to $54.90.
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Fed Rate Cut… The US Federal Reserve on Wednesday cut interest rates for the third time this year to help sustain US growth despite a slowdown in other parts of the world, but signaled there would be no further reductions unless the economy takes a turn for the worse. The Fed's new stance also vouched for both the seeming durability of a US economic expansion that is now the longest on record.
Read More | J&K will be split up into two Union Territories today >>> |
| NPS now open for overseas citizens of India >>> |
Where is the Money?... Investors could add PSU funds as a tactical play to their equity mutual fund portfolios as they believe low valuations, coupled with chances of a strategic sale or disinvestment in public sector units, could trigger a rerating for the sector. The S&P BSE PSU Index is trading at a PE multiple of 10.11, an almost 20 per cent discount to its own 10-year average of 12.01.
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Tax Cut Put on Wait... Abolishing dividend distribution tax, securities transaction tax and long-term capital gains tax on shares could burn a Rs 80,000 crore hole in tax revenue, making it difficult for the government to offer any immediate concessions. The government has already slashed corporate tax rates, foregoing Rs 1.45 lakh crore, and more tax concessions will have to be made up for by increasing income-tax on the super-rich or cutting welfare spending, both of which are not feasible.
Read More Zee Put on Notice... Lenders to Essel Group promoters expressed misgivings about the lack of information regarding additional stake sale in Zee Entertainment and shot down a proposal to park all the promoter stake in an escrow account till the completion of the transaction. The lenders, including mutual funds who are still holding Zee shares as collateral, demanded details of the sale of additional 10%.
Read More DHFL's Gangster Link... Banks with exposure to DHFL are set to expand the purview of a forensic audit to include its business dealings with companies allegedly linked to gangsters Iqbal Mirchi and Dawood Ibrahim Kaskar. The forensic audit by KPMG revealed alleged routing of at least Rs 20,000 crore by DHFL to several shell companies.
Read More Meanwhile... Amazon has invested around Rs 4,500 crore into its Indian subsidiaries as the Seattle-based e-commerce giant ramps up operations in one of its fastest growing markets. Documents filed with the RoC showed Amazon had pumped the money into its retail, food and payments units, but there is no clarity how the money would be used.
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