The current market high is an illusion. While Sensex and Nifty are at all-time highs, that's not the case with smallcaps, midcaps or dollex. The P/E premium of the MSCI India index over the MSCI Midcap index has reached a five-year high of 56.3%, but the ratio of midcaps to largecaps has dropped to the lowest level since 2012. This makes the risk-reward favourable for midcaps.
STREET PULSE: Where we stand Nifty futures on Singapore exchange traded 6 points down this morning, signalling indecisiveness on Dalal Street. Elsewhere in Asia, shares ticked higher on Wednesday as more upbeat signals from Sino-US trade talks fanned hopes of an imminent end to tariff hostilities.
HERE'S WHAT TO WATCH  | MSCI index for Asia-Pacific shares outside Japan rose 0.14%. Australian shares added 0.46% and Japan's Nikkei gained 0.41%.. |
| On Wall Street, all three indices notched record closing highs on Tuesday: Dow Jones rose 0.2% to 28,121.68, the S&P500 gained 0.22% to 3,140.52 and the Nasdaq added 0.18% to 8,647.93. |
| Crude oil price slipped after an industry report showed an unexpected build in US crude inventories, but optimism around the signing of the first phase of a US-China trade deal capped a deeper slide in prices. Brent futures dropped 19 cents, or 0.3%, to $64.08 a barrel while WTI crude futures fell 17 cents, or 0.29%, to $58.24 |
| The rupee on Tuesday rose by 24 paise to settle at an over two-week high of 71.50 against the US dollar as persistent foreign fund inflows and hopes about US-China trade logjam breakthrough boosted forex market sentiment. |
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Son-Rise at Arcelor... Aditya Mittal, scion of the LN Mittal empire, is likely to chair the board that will run Essar Steel, with directors drawn from the two acquiring partners — ArcelorMittal and Nippon Steel Corp of Japan. Top industry sources said both companies are working on putting together a core strategy and integration team as the world's biggest maker of the infrastructure alloy gets ready to take Essar Steel into its fold, marking Arcelor-Mittal's first major foray into India.
Read More Pharma Pricing Deal... The domestic drug industry and trade have agreed to the government's proposal to cap trade margins for all medicines outside price control at 30%, a move that will reduce the prices of nearly 80% of formulations. A consensus to this effect was reached at a meeting held on Friday between the drug pricing regulator, pharma lobby groups and industry associations.
Read More Bond ETFs Coming… The Union cabinet will soon consider what would be the country's first exchange traded fund for corporate bonds, Bharat Bond ETF, a government official has said. "The product is ready to be rolled out. It will soon go to cabinet for approval," he said. It is likely to be rolled out in mid-December, the person said. The ETF will have bonds of some central public sector units as underlying.
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Karvy Scam Skeletons... Hyderabad-based Karvy Stock Broking pledged securities worth Rs 2,300 crore of almost 95,000 clients with three private banks and a large NBFC as collateral to raise loans worth over Rs 600 crore for itself, two persons with direct knowledge of an ongoing Sebi probe into client positions of a number of retail brokers said. The outcome of the Sebi probe is yet to be made public. Last week, the markets regulator banned Karvy from taking new clients over client defaults worth Rs 2,000 crore.
Read More Indian Stocks Laggards Globally… Shares of Indian companies have been laggards in the ongoing global equities rally. Bloomberg 500, a list of top 500 companies by market capitalisation across the globe, has only 13 Indian stocks out of which eight have failed to even break into the top 200 in terms of year-to-date performance.
Read More Red Flag Over Mudra Loans… RBI deputy governor MK Jain on Tuesday raised red flags over rising non-performing assets in loans disbursed under the government's Mudra loan scheme and urged banks to monitor the repayment capacity of borrowers before disbursement. The Pradhan Mantri Mudra Yojana is a central government scheme under which small businesses can avail collateral-free working capital loan up to Rs 10 lakh.
Read More Meanwhile... Institutional investors still assessing and lending to residential realty projects lately prefer projects seeking first-time funding while insisting a certain contribution from promoters as against refinancing deals that were in vogue a couple of quarters ago. In the backdrop of liquidity concerns and sluggish sales momentum, investors have turned more selective with type and structures of deals.
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