Midcaps are the talk of the town. As investors scour for potential multibaggers among the second-rung stocks, one solid idea could be to look for companies that did not invest at the peak of the cycle, but used cash flows to deleverage and clean up their books. As market veteran Ajay Srivastava points out, there are companies that did not borrow, did not do capex, but kept on giving steady dividends all through the slump. There is some inherent strength in them, the cash flows are good but the stocks are down!
STREET PULSE: Where we stand Nifty futures on Singapore Exchange traded some 6 points down at 7 am (IST), signalling indecisiveness on Dalal Street. Elsewhere in Asia, shares ticked up, but hesitated to test an all-time peak as investors worried a new US law backing Hong Kong protests could derail the nations' efforts to end their trade war.
HERE'S WHAT TO WATCH  | MSCI index for Asia-Pacific shares outside Japan ticked up 0.05% in early Friday trade. Japan's Nikkei gained 0.27%. |
| US stock futures declined across the board on Thursday following a flareup in tensions between the US and China. Dow futures were off by as much as 144 points before paring losses. The index was last down 71 points, or 0.3%. US bourses were closed on Thursday for Thanksgiving. |
| Oil prices were little changed on Friday, but looked set to have one of the best performances in recent months in November. Brent futures are up 6.0% so far this month, marking the biggest gain since April. On Friday, US crude futures were little changed at $58.09 a barrel early, up 7% for this month. |
| The rupee dropped by 27 paise to close at 71.62 against the US currency on Thursday, ending its two-day winning run due to month-end dollar demand from oil importers and growth concerns ahead of GDP data release on Friday |
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Millionaires in the Making... Salesforce, Microsoft, Cohesity and Uber are set to offer crore-plus pay packages for the cream of engineering talent at IITs, where the final placements start this Sunday. Only two companies, Microsoft and Uber, had offered compensation packages in excess of Rs 1 crore last year. "Despite all the talk about a slowdown, it is shaping up to be a strong placement season. There are more companies this year offering big salary packages," said a placement coordinator at an IIT.
Read More Green Shoots in Rural India... Demand for daily household products and groceries in rural markets recovered sharply in September quarter, even as economic growth is likely to have slipped further in the quarter. Rural market by volume grew 4.4% in the July-September period from a year earlier when it had declined 2.4%, data from consumer research firm Kantar Worldpanel showed. The overall market expanded 3.1% during the quarter compared with a 1.7% contraction in the year-ago period.
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Slowest GDP Growth in 26 Quarters?... India's economy probably expanded at its weakest pace in more than six years in the quarter to September, a Reuters poll showed, as consumer demand and private investment weakened further and a global slowdown hit exports. The median of a poll of economists showed annual growth in gross domestic product of 4.7% in the quarter, down from 5.0% in the previous three months and 7% for the corresponding period of 2018. If the latest figure for expansion of gross domestic product is 4.7% or less, the quarter will have registered the slowest expansion in 26 quarters, since 4.3% in January-March 2013.
Read More Stocks Rally Set to Slow Down... F&O traders rolled over more Nifty shares than their three-month average, but the rolls were lower than that of the previous month. For Bank Nifty, the rollover from November to December was greater than the three-month average as well as that of October, signalling that the bank index could continue to outperform the bellwether index. Nifty rollover for November was 79.64% against the three-month average of 75.31%, but lower than 84.09% for October, which suggests the positive momentum might continue but the pace of buying may slow, analysts said.
Read More NBFC Loan Taps Dry Up… Credit disbursals by NBFCs have continued to slide despite government measures to boost bank funding to the sector. Loan sanctions fell 34% in September quarter, a year after unexpected defaults at IL&FS sparked off the NBFC liquidity crisis. Total NBFC sanctions fell to Rs 1.9 lakh crore at the end of September from Rs 2.9 lakh crore during the same period last year, CRIF High Mark credit bureau data showed.
Read More Meanwhile... US President Donald Trump signed legislation expressing US support for Hong Kong protesters on Wednesday, prompting China to threaten retaliation just as the two nations get close to signing a phase one trade deal. Protesters in Hong Kong responded by staging a "Thanksgiving" rally, with thousands of people, some draped in US flags, gathering in the heart of the city. The law requires the State Department to certify, at least annually, that HK is autonomous enough to justify favourable US trading terms that have helped it become a world financial centre. It also threatens sanctions for human rights violations. The bill prompted China to warn of "firm counter-measures", unsettling financial markets globally.
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