Bull market? As one brokerage points out, while Nifty delivered 12% returns in 2019, Nifty Midcap100 shed 4% and Nifty Smallcap100 9%. Within the Nifty pack, the divergence in market-cap between the top 15 stocks and the rest has widened to 50%. In last two years, Nifty outperformed Nifty Midcap100 by 35% and Nifty Smallcap100 by 51%. This suggests investors' uneasiness with majority of businesses after several big names went belly up. It shows big businesses are set to get bigger and smaller ones will have to struggle in India's new economic order.
STREET PULSE: Where we stand Nifty futures on Singapore Exchange traded nearly 200 points down at 7 am (IST), signalling a major crash on Dalal Street after Iran fired rockets at an Iraqi airbase that hosts US military forces, stoking fears of further sharp escalations in a developing conflict. Elsewhere in Asia, shares plunged, while gold and oil shot higher.
HERE'S WHAT TO WATCH  | In morning trade, MSCI's broadest index of Asia-Pacific shares outside Japan shed 0.5%. Japan's Nikkei dropped 2.5% and Australian shares fell 1%. |
| Wall Street's major indices declined on Tuesday as investor caution persisted amid a dispute between the US and Iran. Dow fell 119.7 points, or 0.42%, to 28,583, the S&P500 lost 9.1 points, or 0.28%, to 3,237 and the Nasdaq 2.88 points, or 0.03%, to 9,068. |
| Oil rose sharply, with US crude rising nearly $3, after Iran fired ballistic missiles at two bases of US forces in Iraq. WTI crude futures rose nearly $3, or almost 5%, to $65.50 a barrel. |
| The rupee reclaimed some lost ground on Tuesday, rising 11 paise to close at 71.82 against the US dollar. |
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Big Loan Growth… HDFC Bank, India's largest private sector lender by market capitalisation, has reported a robust 20% loan growth in the quarter ended December 2019 compared to a year earlier led by a big consumer loan push in the festive season as the bank took advantage of its strength in retail banking and wide network. In a regulatory pre-results disclosure to stock exchanges the bank said its total advances rose 20% to Rs 9.34 lakh crore in the quarter ended December 2019 from Rs 7.81 lakh crore in the quarter ended December 2018.
Read More All Clear to AI Sale: The government on Tuesday approved a proposal to sell its 100% stake in Air India. A committee led by home minister Amit Shah also approved proposals to transfer much of Air India's debt to Air India Asset Holdings — a special purpose vehicle created to house its assets and debt. The government will call expression of interest within this month.
Read More Plugging Tax Leakage… A nine-point plan has been firmed up to plug revenue leakages under the goods and services tax regime. It includes setting up a panel with tax officials from Centre and states to draw up a standard operating procedure for tackling refund frauds. The action plan was finalised after a meeting of state and central GST chief commissioners on Tuesday.
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Mideast Flares Up... Iran has launched a major ballistic missile attack on US-led forces in Iraq, the US military said on Tuesday, potentially triggering a new round of escalation in the confrontation between the US and Tehran. The attacks on the Ain Al-Asad air base and another in Erbil, Iraq, early Wednesday came hours after the funeral of an Iranian commander whose killing in a US drone strike has raised fears of a wider war in the West Asia. US Secretary of State Mike Pompeo and Defense Secretary Mark Esper arrived at the White House late on Tuesday after the attack. A White House spokeswoman said President Donald Trump has been briefed on the attacks as is monitoring the situation closely.
Read More FY20 Growth Estimated at 5%… India's economy is forecast to grow 5% this fiscal, its slowest pace in 11 years, estimates released by the government on Tuesday showed, increasing pressure on finance minister Nirmala Sitharaman to announce measures to revive demand and boost investments in the upcoming budget. The projected growth rate of gross domestic product (GDP) in FY20 is the lowest since FY09, the year of the global financial crisis, when GDP grew 3.1%. It reflects a sharp decline from 6.8% in FY19 as the economy is hit by a broad-based slowdown, fragile consumer sentiment and stagnant investments.
Read More Meanwhile... SBI is facing a dilemma. The PSU lender has asked Sebi to clarify whether its rule on splitting the post of chairman and MD for listed firms is applicable to the public sector bank, considering that it is governed by a separate law. Two people familiar with the development said SBI has told the market regulator that the directive on splitting the roles doesn't apply to it as it is governed by the State Bank of India Act, 1955. Representatives from SBI and Sebi are expected to meet next week to discuss the issue.
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