Crowded trades do not make money in financial markets. In the fixed income market, short-term AAA corporate bonds are now such a trade, as investors have become overweight on that space. Even in the mutual fund industry, a lot of flows have come into that space. And market veteran R Sivakumar puts it, it's about time investors started looking outside of that. "We see a lot of value in long duration securities. We also see value in non-AAA credit space, which has only seen outflows in last six months," says he. There is a lot of value at the longer end of the curve because the short end has reacted a lot to the extraordinary monetary policies in response to the Covid-19 crisis. The opportunity is there.
MARKET CUES: Where do we stand >>>  | Nifty futures on the Singapore Exchange traded 30 points lower at 7 am (IST), signaling a weak start for Dalal Street. |
| On Tuesday, Nifty50 failed to capitalise on intraday gains, as it faced selling pressure near the 11,450 level. It formed a small bearish candle and analysts said the 11,450 level may pose immediate hurdle for the index |
| Asian stocks fell with US and European equity futures amid worries that a Covid-19 vaccine could be delayed. Japan's Topix index declined 1.4%, Hong Kong's Hang Seng fell 1.3%, Shanghai Composite 1%, South Korea's Kospi 1% and Australia's S&P/ASX 200 retreated 2.3%. |
| Wall Street sank for the third consecutive session, led by declines in heavyweight technology stocks. Dow fell 632 points, or 2.25 per cent, while S&P500 lost 95 points, or 2.78 per cent, and the Nasdaq 465 points, or 4.11 per cent. |
| Oil steadied after its biggest one-day loss in more than two months on worsening US-China relations and a retreat in global stocks. WTI crude retreated 0.7% to $36.52 a barrel. |
| The rupee depreciated by 25 paise to settle at more than one-week low of 73.60 against the US dollar on Tuesday amid growth concerns and fresh border tensions between India and China. |
| The dollar extended gains while the yen rose 0.1%. The euro was down 0.1% and the offshore yuan traded at 6.8533 to the greenback. |
| Gold and silver prices fell on Tuesday in Indian markets, tracking declines in global rates. On MCX, gold futures fell 0.5% to Rs 50,803 per 10 gm and silver futures 0.6% to Rs 67,850 a kg. In international market, gold slipped 0.3 per cent to $1,925.25 an ounce |
| LOOK WHO'S |  |
RIL closer to value unlocking in Q2C… RIL has moved a step closer to its goal of value unlocking its oil-to-chemicals business with the release of a detailed plan to hive off the business into a separate entity, Reliance O2C. The move may help the Mukesh Ambani-led conglomerate attract global investments in the business, after receiving big-ticket investment in its digital arm Jio.
Read More Time-bound loan recast to avert misuse… RBI's loan restructuring plan would be a success this time as it comes with a specific time frame and there is very little scope for misuse by either corporates or banks, said KV Kamath. "The way RBI has crafted the boundary conditions, it's very difficult to misuse it," said Kamath, who headed the panel formed by the central bank to frame rules for loan restructuring. "It is in everybody's interest — whether it's the lending institution or the borrower — to get back to health. So, if that objective is kept in mind, I don't think there will be any misuse."
Read More Bharat Dynamics OFS may be good deal…. Retail investors can subscribe to the OFS of Bharat Dynamics on Wednesday for a possible return of 20% in one year as the government is offering a Rs 20 per share discount over the cut-off price, market experts and advisors said. Based on a burgeoning orderbook which is expected to be at Rs 22,500 crore in FY22, analysts estimate an EPS of Rs 24.9 for the year. At a PE multiple of 16, the stock is valued at Rs 400 per share, a 20% upside from the OFS level.
Read More Price dynamics favours Nalco… With aluminium prices once again on the rise after a declining trend over the past two years, investors may prefer state-owned Nalco given its pure-play aluminium focus compared with the more diversified operations of its peers. Nalco's cheaper valuation will be another favourable factor. Aluminium price on the London Metal Exchange has climbed up by 25% from the April lows to nearly $1,800 per tonne.
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Stiff scrutiny likely for loan recast… Lenders will likely put loan-restructuring requests from companies in the traditionally capital-intensive and Covid-battered sectors, such as power, property, hotels, tourism and aviation, through greater scrutiny after the KV Kamath committee set stiff future financial milestones for the affected businesses being given the facility. So, bankers are likely to assess the ability of their borrowers to meet the future capital-structure milestones while taking a call on restructuring requests. Theoretically, the scrutiny will be rather intensive for overleveraged firms.
Read More India stares at sharp contraction…. Goldman Sachs forecast a 14.8% contraction in India's economy in FY21, possibly the deepest cut estimated thus far and steeper than the 10.5% fall estimated by Fitch Ratings. India Ratings said it expects an 11.8% contraction against shrinkage of 5.3% forecast earlier, following a deeper-than-expected 23.9% decline in June quarter GDP. All three estimates were issued on Tuesday. Goldman Sachs had earlier forecast an 11.8% contraction, while Fitch had forecast a 5% fall in its June estimates.
Read More Route Mobile IPO... The firm plans to raise up to Rs 240 crore by issuing fresh equity and upto Rs 360 crore through an offer for sale by promoters. After the IPO, the promoter group stake will fall to around 66% from 96%. While the company has shown a rapid growth over the past three years, the future performance will depend upon the company's ability to stay ahead in ever changing technological landscape amid tough competition. This and a high client concentration makes the IPO more suitable for investors with higher risk appetite who want an exposure to the fast growing digital communications sector.
Read More Sebi rejects NSE directors... The Securities and Exchange Board of India (Sebi) has rejected the reappointment of two long-time shareholder directors on the board of the National Stock Exchange (NSE), said people privy to the development. Sebi has told NSE that it should not nominate Abhay Havaldar, former director of General Atlantic, and Prakash Parthasarathy, former chief investment officer of Premji Invest, on the exchange's board for another term.
Read More Shots fired on China LAC after 45 tears… Shots were fired for the first time in 45 years on the LAC as tensions rose when Chinese troops tried to approach a newly established forward position of the Indian Army at Mukhpari heights in the Chushul sub-sector. Army officials told ET that troops from PLA fired a few rounds in the air on Monday evening in an attempt to intimidate Indian soldiers. The officials added that the Indian Army exercised restraint in the face of grave provocation.
Read More Meanwhile... Kochhar home 'proceeds of crime'… The CCI Chambers residence of sformer ICICI Bank CEO Chanda Kochhar and her businessman husband Deepak Kochhar was bought at a "nominal consideration" and is being treated as "proceeds of crime", the Enforcement Directorate told a PMLA court on Tuesday. The agency was seeking the custody of Deepak Kochhar, who was arrested on Monday.
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