How long can PE expansion drive a stock? Factors like extra liquidity, momentum buying, comparative advantage and broader economic sentiment inflate this measure for stocks all the time. And Sunil Singhania of Abakkus Asset Manager says in many such PE expansion cases in Indian market, if the stocks continue to grow at the rates they have grown at in last 5-10 years, it is going to be very tough for investors to make money in them. Point to ponder, surely.
STREET PULSE: Where we stand Asian shares were little changed this morning as investors awaited new developments toward scaling back a bruising trade war between the US and China.
HERE'S WHAT TO WATCH  | SGX Nifty traded some 20 points lower at 7 am (IST), signalling possible weakness ahead on Dalal Street. MSCI index for Asia-Pacific shares outside Japan was unchanged. Australian shares rose 0.14%, while Japan's Nikkei gained 0.35%. |
| US stocks closed mostly higher Tuesday, with the Dow and Nasdaq ending the day at record highs, as investors welcomed better-than-expected data on the service sector and grew optimistic for a US-China trade deal. Dow rose 30.52 points to hit 27,492.63, Nasdaq edged 1.48 points to 8,434.68 but S&P500 ended 3.60 points lower. |
Oil prices dropped on Wednesday after industry data showed a larger-than-expected build-up in US crude stockpiles. Brent crude futures fell by 23 cents to $62.73 a barrel, while WTI crude futures slipped 21 cents to $57.05.
Read More The rupee gained 8 paise to close at a fresh five-week high of 70.69 against the US dollar on Tuesday following foreign fund inflows and gains in Asian peers after Chinese central bank cut interest rates.
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Bold Reforms Coming... Finance minister Nirmala Sitharaman on Tuesday said the government will soon use its strong electoral mandate to usher in the next wave of reforms, and not to miss the bus this time. Without naming the reform measures unsuccessfully attempted by the Modi government in its first term, she said government's efforts last time were thwarted by the poor numbers in the Upper House.
Read More Real Opportunity... Property developers in the Delhi-NCR region are partnering large builders from the country's South and West to restart projects, in the backdrop of a severe cash crunch, the stringent RERA and the threat of being taken to the NCLT. Financially strong firms like Prestige Group, Godrej Properties and Kalpataru Group have entered into joint ventures, joint development and development management agreements in the country's largest property market by volume.
Read More P-Notes Clampdown: Sebi has tightened rules on participatory notes (p-notes), or offshore derivative instruments issued by brokers to foreign investors not registered locally, while easing some operational norms for select overseas funds. The market regulator said FPIs would have to make separate registrations for issuing p-notes for underlying derivatives. However, this requirement is waived for p-notes against underlying cash equities.
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SBI in Fresh Bank Fraud?... CBI says it has registered 42 new cases of bank fraud amounting to about Rs 7,200 crore after conducting searches in 187 places across the country. The primarily loan fraud cases were detected at 15 banks, including the country's largest state-run lender SBI. Of the 42 cases, four involved a fraud amount of more than Rs 1,000 crore each, the agency said.
Read More Auto Rally Fizzling Out… The rally in auto stocks may hit a speed bump after the recent rally in the last one month in anticipation of strong festival season sales. Analysts say they will watch out for November and December sales to discern the sustainability of demand. The BSE Auto index has gained 13% in last one month. However, the rally is losing steam, with the index ending in the red in four out of the last five sessions.
Read More Services Growth Shrinking... India's services sector activity declined for the second straight month in October, the first back-to-back reduction since the second quarter of 2017-18, dragging business confidence to its lowest level in almost three years, a private survey showed on Tuesday. Although the IHS Markit Services PMI rose to 49.2 last month from 48.7 in September, it remained below the 50-mark threshold that separates contraction from expansion.
Read More Meanwhile... China is seeking the roll back of US tariffs on as much as $360 billion of Chinese imports before President Xi Jinping agrees to go to the US to sign a partial trade deal with President Donald Trump. Negotiators asked the Trump administration to eliminate tariffs on about $110 billion in goods that were imposed in September and lower the 25% tariff rate on about $250 billion that began last year.
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