The market dynamic has shifted in favour of largecaps, with the biggest chunk of government benefits going to them and global liquidity chasing these stocks at a time when equity indices are no longer reflecting the fundamentals. As Ajay Srivastava of Dimensions Corporate Finance puts it, historic lows of growth and historic highs of market do not sound good together. "We are very clear that India is for largecaps, there is no point of bottom fishing," says he.
STREET PULSE: Where we stand Stocks rallied to near record highs on Friday after China said it had agreed with the US to cancel tariffs in phases.
HERE'S WHAT TO WATCH  | SGX Nifty traded some 50 points lower at 7 am (IST), signalling possible weakness ahead on Dalal Street. MSCI index for Asia-Pacific shares outside Japan edged up 0.2% in early trade while Tokyo's Nikkei jumped 0.75% to hit a 13-month high. |
| In overnight trade, US stocks pared gains on the report of the opposition to the deal in Washington, but Dow and S&P500 did close at all-time highs. Nasdaq missed a record close by less than two-tenths of a point. S&P500 ended 0.27% higher at 3,085. |
Crude oil futures fell. WTI crude slipped 15 cents, or 0.2%, to $57 a barrel. The contract rose 1.4% on Thursday.
Read More The rupee pared its initial losses to settle flat at 70.97 against the US dollar on Thursday after the US-China trade deal hopes enthused investor sentiments.
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Thaw Before the Deal... China and the US have agreed to roll back tariffs on each others' goods in a "phase one" trade deal if it is completed, officials from both sides said on Thursday, sparking division among some advisers to President Donald Trump. The Chinese commerce ministry said the two countries had agreed to cancel the tariffs in phases. A US official confirmed the rollback would be part of the first phase of a trade agreement.
Read More Advantage Mumbai... Mumbai Metropolitan Region is the second largest market in terms of stuck housing projects, and experts believe the maximum resolution through the government's Rs 25,000 crore lifeline can be achieved in this region. Potential to attract price realisation and better demand pattern are expected to push revival of several unfinished residential projects in the region with the help of the stress fund, industry experts said.
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Cash-Less?... Free cash flow of 98 manufacturing companies in the BSE 200 index turned negative in FY19 for the first time since FY13, showed data from Bloomberg. FCF, which is the cash left after paying for operating expenses and capital expenditure, reflects the ability to invest in future growth. It was negative Rs 13,258 crore in FY19 compared with over Rs 73,632 crore in FY18 and much lower than the peak of Rs 1 lakh crore hit in FY16. About one-third of the sample companies reported negative cash flow.
Read More Funding Drought… A major source of raising funds for promoters has dried up with lenders tightening the terms of borrowing against shares as collateral. Promoters are finding it unviable to take loans from mutual funds against pledged shares after Sebi recently tightened norms, while NBFCs have become choosy about lending against shares, as tight liquidity conditions and an uncertain market outlook have heightened concerns over defaults. Mutual funds and NBFCs have been the biggest lenders to promoters in recent years.
Read More China's A game... Global index provider MSCI said mainland Chinese stocks, or A shares, will rise to a weight of 4.1% in the MSCI Emerging Market Index, up from 2.55% currently, as it implements the final step of the weight increase of Chinese shares in its widely-followed emerging markets benchmark.
Read More Meanwhile... The government has no plan to participate in the rescue of DHFL saddled with nearly Rs 1 lakh crore debt. A consortium - led by Union Bank and SBI - was set up to restructure DHFL's debt a month after it first defaulted in June. But having struggled to come up with a rescue plan, the banks last week turned to the government for help.
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