"It was tough enough to buy a stock at 25 PE, now they are asking us to buy the same at 35 PE." This statement reflects the dilemma investors are facing because of the mismatches caused by lower earnings and higher liquidity. It reflects the reality of markets going sharply out of sync with economic realities, not just in India, but all over the world, mainly due to easy liquidity. On Dalal Street, a steady stream of household savings into mutual funds are forcing fund managers to play musical chairs among a select group of stocks, making the valuation matrix lopsided.
STREET PULSE: Where we stand Nifty futures on Singapore Exchange traded 10 points down at 7 am (IST), signalling indecisiveness on Dalal Street. Elsewhere in Asia, shares edged up on Thursday on signs the US and China were on track for a preliminary trade deal.
HERE'S WHAT TO WATCH  | MSCI index for Asia-Pacific shares outside Japan rose 0.3%. Australian shares were up 0.9%, while Japan's Nikkei stock index rose 0.81%. |
| US stocks were boosted on Wednesday by reports that the US and China were edging closer to a trade deal. Dow closed 146 points, or 0.5 per cent, higher, while the S&P500 gained 0.6 per cent and the Nasdaq 0.5 per cent. |
| Oil prices edged lower in muted trading on Thursday ahead of the start of Opec meetings later in the day. Brent crude futures dipped 10 cents to $62.90 a barrel while WTI crude futures fell 22 cents, or 0.4%, to $58.21 |
| The rupee clawed back its lost territory to settle 13 paise higher at 71.53 to the US dollar on renewed hopes about US-China trade deal. |
| LOOK WHO'S |  |
Sixth Rate Cut of 2019?... Five interest rate cuts since the start of the year hasn't stopped India's economy from slowing to its weakest growth rate since 2013, but RBI is expected to make its sixth cut on Thursday to give what little relief it can. A Reuters poll of 70 economists predicted RBI would cut its repo rate by 25 basis points (bps) to 4.90% when the monetary policy committee's decision is announced on Thursday, and then by another 15 bps in the second quarter of 2020, where it will stay at least until 2021.
Read More Advantage RIL… Goldman Sachs has raised the earnings estimates for Reliance Industries, India's most valuable company, for the next two fiscal years and subsequently increased the 12-month share price target to Rs 1,850 from Rs 1,635 earlier, primarily driven by expectations of stronger growth in the telecom business. The brokerage said it was upbeat about RIL in view of the higher Arpu from potential tariff increases, coupled with continued strong subscriber addition momentum. It maintained a 'buy' rating on the shares.
Read More May This Tribe Increase… The Rs 1 crore-plus club of independent directors rose over fourfold to 89 in FY19 from 21 in FY13, according to market tracking firm Prime Database, as companies sought to attract board members from a dwindling pool of such candidates. There were 43 independent directors who earned more than Rs 1 crore from a single company even as the government has been looking to cap their remuneration to ensure impartiality.
Read More | WHO'S |  |
Realtors Challenge NAA… Some real estate developers have taken the government to court over the constitutional validity of National Anti-profiteering Authority and claimed that the body does not have power to demand interest on penalties slapped by it. This comes after NAA slapped notices on 50 real estate developers across India for profiting from the GST. According to a writ petition filed in the Delhi High Court, the NAA is on a par with a tax tribunal but it doesn't have even one judicial member as part of it.
Read More Debt Market Flows Skewed… There has been a slow but clear improvement in debt market liquidity over the past six months as investors are shedding their inhibitions and coming back to invest. However, the benefit of the lower yields is still restricted to the highest rated companies, indicating that the investment climate is still not back to normal. Bond market executives say easy liquidity, lower interest rates and investor risk aversion have benefited the highest rated companies.
Read More Meanwhile... Madurai-born, IIT Kharagpur-educated Sundar Pichai, CEO of Google, was appointed CEO of parent company Alphabet on Wednesday as founders Sergey Brin and Larry Page stepped down from active roles. The world's second and third most valuable companies, respectively, Satya Nadella-run Microsoft and Sundar Pichai-run Alphabet, now have India-born chiefs. Microsoft's market capitalisation was $1.14 trillion at close of trade in the US on Tuesday while Alphabet closed at $893.3 billion. Apple is globally the most valuable firm and Amazon occupies the fourth place.
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