By definition, growth stocks are the ones that have the potential to outperform because of better scope for future earnings expansion, while value stocks are the ones currently trading below what they are worth. On Wall Street, the value group now trades way below their growth peers. The P/E ratio of iShares Russell 1000 Value ETF stood at 17.1 on August 11 against iShares Russell 1000 Growth Index ETF's 35.3. The former is up mildly from 16.8 in December 2019 while the latter has gone up from 27.4. Analysts attribute this to sky-high valuations of technology names. That, some argue, should change as value should do well when investors are willing to look forward and estimate better future earnings. Will that be a trend everywhere?
MARKET CUES: Where do we stand >>>  | Nifty futures on the Singapore Exchange traded 11 point higher at 7 am (IST) this morning, signaling a tepid start for Dalal Street. |
| Last Friday, Nifty shuttled between a high and low of 11,366 and 11,111 levels before closing 122 points, or 1.08 per cent, down at 11,178. In the process, the index formed a large bearish engulfing candle on the daily chart. Analysts said the upside may remain capped in the coming sessions. |
| Stocks in Asia began the week mixed as investors assessed soured US-China ties as well as cash injections by the Chinese central bank. The market opened modestly higher in China after the central bank injected liquidity into the financial system. Equities in Japan and Australia were lower, while South Korea closed for a holiday. |
| US stocks closed mixed on Friday after reports showed the economic recovery slowed and stimulus talks reached a stalemate. The S&P500 fell less than 0.1% after fluctuating near all-time highs for much of the day, the Dow edged 0.1% higher while the Nasdaq ended in the red. |
| The rupee settled 6 paise lower at 74.90 against US dollar on Friday tracking weak domestic equities. |
| The dollar slipped in Asian trade. The yen gained 0.1% to the greenback as did the offshore yuan. The euro was little changed. |
| Oil prices climbed higher on Monday, lifted by China's plans to ship in large volumes of US crude in August and September. Brent crude rose 21 cents, or 0.5%, to $45.01 while WTI crude gained 27 cents, or 0.6%, to $42.28. |
| Gold prices fell sharply in India last week, tracking a decline in global markets. On Friday, October gold futures fell 1.5% to Rs 52,170 per 10 gm. For the week, gold was down about Rs 2,600. Silver slumped 5.5% to Rs 67,220 per kg. In global markets, spot gold fell 4.4% for the week to $1,945 in London. |
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Sebi weighs T+1 stock settlement… A faster trade settlement system for Indian stocks is in the offing. Sebi is considering a reduction in the settlement cycle for completion of share transactions to T+1 — an abbreviation for 'trade plus one day' — from the existing T+2. The move, when implemented, is expected to improve liquidity, boost efficiency and reduce risks to the system.
Read More Banks may offer some home loan rejig… Lenders, including SBI, are working on restructuring options for home loans where the overall tenure of the loan does not extend by more than two years, even after relaxing the repayment schedule. The options include allowing EMI deferment for a few months in cases where the borrower has suffered total loss of income or allowing step-up EMIs, with a lower payout for a couple of years to make up for a reduction in salary or loss of income due to the pandemic.
Read More General insurers log solid growth… The general insurance industry has posted 18 per cent year-on-year growth at Rs 17,011 crore in July, compared with the year-ago period. The industry has seen premiums of Rs 56,340 crore till July — a recovery to pre-Covid levels. This growth has been driven by fire, crop and health insurance.
Read More E-comm firms forecast mega festive sales… India's two biggest ecommerce marketplaces, Amazon and Walmart-owned Flipkart, expect this year's festival-season business in smartphones, television sets, refrigerators, washing machines and apparel to nearly double for some categories and increase at least 40% in others, top industry executives told ET. The platforms have accordingly asked sellers to place large orders with the respective brands.
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RBI weighs slowing dollar buying… RBI's central board meeting last week weighed if it should keep amassing forex reserves or start buying more gold. Some of the board members said the recent build-up of reserves has created adequate cover and the cost of buying more dollars may outweigh the gains from an overflowing reserves chest. A few board members felt there was probably a need to diversify the allocation of reserves more in favour of gold.
Read More Amazon stake thorn in RIL-Future deal… Amazon, Reliance group and Kishore Biyani's Future are engaged in hard-nosed negotiations over the extent of stake the Seattle-based retail giant will hold in the combined Reliance-Future entity, people close to the negotiations said. While Reliance is willing to cede only a minor stake of 1-2%, Amazon wants to hold atleast 5-6%, these people added. The purchase of a minority stake in a key Future group holding company last year gave Amazon special rights and also veto power over any investment or sale of stake by promoter Kishore Biyani.
Read More Diesel sales drop by one-fifth in Aug… Diesel sales dropped by a fifth in the first half of August compared with a month ago, indicating that extended regional lockdowns, sluggish economic recovery and high prices are blocking full revival of fuel demand. Demand for diesel slipped 19% while that for petrol gained 2% during August first half compared with the same period in July, according to the provisional sales data of state-run oil companies.
Read More NCR realty fails to look up… The National Capital Region (NCR)'s real estate has lost its sheen — the region now contributes just 9% of sales to overall cities' tally, selling a tenth of its peak numbers while other cities including Mumbai, Bengaluru and Pune are now two-three times bigger, surging both in terms of sales as well as investor return, according to a study by Knight Frank that analysed data of first half of 10 years of top eight cities.
Read More Meanwhile... Trade balance in deficit again, but rupee safe… India's trade balance may have slipped back into deficit, but it may not get out of hand and hurt the rupee as it did in the past. Analysts expect the current account to be in surplus in the current fiscal year due to factors such as low crude oil prices as well as tepid demand for gold.
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