When the equity market goes out of your grasp, turn to defensives. That's the age-old trick no serious equity investor needs to be reminded of. The problem is, Dalal Street's time-tested defensive bets like FMCG, IT, healthcare appear to be losing their edge. Traditionally, such stocks don't go out of fashion. But now they seem to do. They look prone to cyclicality of the economy as well, even as dividends dry up. Is there a churn happening there too?
STREET PULSE: Where we stand Asian shares took off and sterling held near six-month highs as Britain and the EU made headway on a Brexit deal.
Read More  | SGX Nifty traded nearly 40 points higher at 7 am (IST), signalling buoyancy on Dalal Street. MSCI index for Asia-Pacific shares outside Japan rose 0.3%. Japan's Nikkei jumped 1.7% while Australian shares added 0.9% and South Korea's KOSPI climbed 0.7%. |
| On Wall Street, blockbuster earnings from the likes of JPMorgan Chase and UnitedHealth sent the Dow climbing 237 points, or 0.9%. The S&P 500 rallied 1%, while the Nasdaq jumped 1.2% |
Oil prices rose, tracking gains in equities, as investors pinned hopes on a potential Brexit deal. Brent crude oil futures rose risen 11 cents to $58.85 a barrel, while WTI crude rose 10 cents, or 0.2%, to $52.91.
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Telco Bonanza… The telecom department is working on a plan to provide a two-year holiday on payment of spectrum dues totalling over Rs 40,000 crore by the three private telcos, a senior official said. If implemented, this will be the second major step taken by the government in two years to ease the burden of the sector that has debt of over Rs 7 lakh crore, amid pressure on revenue and profitability due to price competition.
Read More No Taxing Worry… Revenue secretary Ajay Bhushan Pandey says the government is well on track to meet tax targets even after the significant cut in corporate tax rates and that any reduction in personal income-tax would depend on impact of the measures taken on revenue and the Budget. He refuted criticism that GST was the cause of the current economic slowdown, saying it was a win-win for everyone.
Read More Relief Package... Banks plan to recast Rs 4,000 crore loans of fraud-hit CG Power and Industrial Solutions, including an easier moratorium on repayments and standstill arrangement on past loans, to keep the company's operations going.
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Das Faces Questions… RBI governor Shaktikanta Das came under pressure at the bank's board meeting last week, with two external directors questioning how a string of frauds that have surfaced since 2018 remained undetected for years. The two board members referred to the losses suffered by Punjab National Bank, which bankrolled jeweller Nirav Modi and his uncle Mehul Choksi; the multiple irregularities in IL&FS; and the recent failure of PMC Bank — 70% of whose loan book was cornered by Mumbai-based realtor HDIL. Questions have cropped up on the efficacy of its inspection and supervision mechanism.
Read More Trade Turmoil… India's exports contracted 6.57% in September as shipments of petroleum, engineering, gems & jewellery and chemicals fell. Imports declined 13.85% to a three-year low of $36.89 billion, indicating weak domestic demand. The drop in shipments of petroleum, engineering, leather, chemicals and gems & jewellery made India's exports shrink to $26.03 billion. Trade deficit narrowed to a seven-month low of $10.86 billion from $14.95 billion a year earlier and $13.45 billion in August. Only eight out of 30 key export sectors showed growth in September.
Read More Meanwhile... Nobel Economics Prize for Indian-American Abhijit Banerjee says India's economy is in a "tailspin" and "doing very badly". "It is the time when you don't worry so much about monetary stability and you worry a little bit more about demand," the Nobel Laureate said. On Tuesday, IMF cut its estimate for India's growth this year to 6.1% from 7% projected in July, calling on the country to use monetary policy and broad-based structural reforms to address cyclical weakness and strengthen confidence.
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