Volatility in domestic stocks has come down sharply from July levels, with India VIX now ruling in the 14-15 range. This is likely to bring high-beta midcaps and smallcaps into focus. A reduced beta environment is considered good for generating alpha in the market, and analysts expect second-rung stocks to deliver significant bumpup from here on. The market is already witnessing sustained buying from foreign funds since the past couple of weeks, which may fuel the next leg of up-move in Nifty.
STREET PULSE: Where we stand Nifty futures on Singapore exchange traded 22 points higher this morning, signalling buoyancy ahead on Dalal Street. Asian stocks rose on Tuesday as an apparent olive branch from Beijing in trade talks with Washington added to other recent signs of progress, fuelling a rally in Wall Street's main benchmarks to record highs.
HERE'S WHAT TO WATCH  | MSCI index for Asia-Pacific shares outside Japan rose 0.2%. Australian shares were up 0.59%, while Japan's Nikkei rose 0.78%. |
| On Wall Street, all three indices ended at record highs. Dow rose 190.85 points, or 0.7%, to 28,066, while the S&P500 gained 0.8% to 3,133 and the Nasdaq 1.3% to 8,632 |
| Oil prices were steady on Tuesday, holding onto gains from the previous session, after positive comments from the US and China kept alive hopes that the world's two largest economies are soon to agree an end their trade war. Brent crude futures slipped 1 cent to $63.64 after rising 0.4% in the previous session. WTI crude fell 3 cents to $57.98 |
| The rupee slipped 3 paise to close at 71.74 against the US dollar on Monday due to fag-end dollar buying by banks and importers. |
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Nifty on a High... The benchmark Nifty could encounter some resistance at 12140-12150 as it looks poised to surpass its record high of 12103 on Tuesday. From 12150-odd, the market could test new highs of 12,200 or so, as 12,100 and 12,000 level call writers rush to cover their short positions on the index. From around 12,200-12,250, profit booking could set in, analysts said. Odds shortened of Nifty to test its June 3 record high as Put option sellers on the index raised sales significantly on Monday across Put options at strike prices 11,900 to 12,100 expiring on November 28. Along with this, significant short covering in Calls at 11,900 and 12,000 implies Nifty hitting a new high Tuesday is just a matter of formality.
Read More India Sept Job Growth... Around 12.23 lakh jobs were created in September as compared to 13.38 lakh in August 2019, according to the payroll data of Employees' State Insurance Corporation. Gross enrolments of new subscribers with the ESIC were 1.49 crore during the entire 2018-19 fiscal, the National Statistical Office (NSO) said in a report. It also showed that during September 2017 to September 2019, around 3.10 crore new subscribers joined the ESIC scheme.
Read More Bumper Listing… Alibaba Group's Hong Kong shares traded 7.7% higher at HK$189.50 in their debut, after marking the city's biggest share sale in nine years. Alibaba has raised at least $11.3 billion from the secondary listing and that amount could climb to as much as $12.9 billion if an over-allotment option is exercised. At Tuesday's listing ceremony, CEO Daniel Zhang noted Alibaba's Hong Kong debut had been a long time coming.
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Cash Deals Back in Realty... Indians' love affair with cash purchases show little sign of abating. Especially, when it comes to buying real estate. The incidence of high cash component in property sales in metros has come down sharply since 2016, but it continues to be rampant in smaller and some bigger cities like Ahmedabad and Indore. Builders continue to ask for a hefty cash pay-out in property and land purchases forcing customers to either drop their plans or raise cash from other sources. And all this is happening when large property markets with established realty developers are moving towards cheque payments in a big way. Smaller cities like Ahmedabad, Chandigarh, Jaipur, Noida, Aurangabad, Kochi and Indore are still witnessing large-scale usage of cash in property sales.
Read More Chandra Steps Down as ZEE Chair… Subhash Chandra, the media baron who rode India's tumultuous media and entertainment scene to make Zee Entertainment Enterprises (ZEE) one of India's biggest media groups, on Monday quit as chairman of the company which he founded in 1992 after watching CNN make a big splash with satellite television. He will, however, continue as a non-executive board member, ZEE said in a statement. The resignation comes days after Chandra's family saw its stake in ZEE fall to 5% following a series of mistimed and expensive infrastructure bets.
Read More Karvy Ban Fears… Mutual fund houses serviced by Karvy group company Karvy Fintech are preparing to reach out to their investors to assure them about the safety of their investments with the respective fund houses. The move comes despite the recent Sebi ban on Karvy Stock Broking from taking new clients due to alleged misuse of clients' funds and securities. Fund houses said the custody of funds, stocks, bonds that MF houses have bought for their investors are with Sebi-registered custodians while Karvy Fintech, which serves fund houses, only does the back office work related to investments.
Read More Meanwhile... China's Vice Premier Liu He, US Trade representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin held a phone call on issues related to a phase one trade agreement on Tuesday, China's commerce ministry said. Both sides agreed to maintain communication on remaining issues on phase one trade deal consultations, the ministry said.
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