Charlie Munger coined the term 'Lollapalooza Effect' to refer to a situation where many small independent factors would combine to produce an outsized outcome. The Sebi circular redefining the investment rule for multicap funds is projected to create such an impact at a time when midcaps and smallcaps were beginning to look up from two years of slumber, and investors were becoming wary of largecap valuations, which many feel are not sustainable. Does it mean we are in for the same euphoria in second-rung stocks one had seen in 2016 and 2017? Unlikely. The reason, says a top fund manager, is everyone is busy screening for strong balance sheets, right kind of growth areas and potential next leaders. So, some names will grow disproportionately than most others there too.
MARKET CUES: Where do we stand >>>  | Nifty futures on the Singapore Exchange traded 23 points lower at 7 am (IST) this morning, signalling a tepid start ahead for Dalal Street. |
| Nifty reclaimed the 11,500 level on Tuesday and formed a bullish candle on the daily chart. Analysts said levels near the recent swing high of 11,585 may continue to create hurdles for the index in the near term. |
| Asian stocks were little changed on Wednesday, as investors awaited a US Fed meeting to gauge the extent of central bank support for the economic recovery. Japan's Topix added 0.1%, Hong Kong's Hang Seng rose 0.4% and Australia's S&P/ASX 200 Index 0.7%. On the downside, Shanghai Composite slid 0.1% and South Korea's Kospi 0.1%. |
| US stocks ended off their session highs, with the Dow industrials closing little changed. The S&P500 gained 0.52% while the tech-heavy Nasdaq rose 1.21%. |
| Oil prices rose on Wednesday, extending gains from the previous session, as a hurricane disrupted US offshore oil and gas production. Brent crude rose by 15 cents, or 0.4%, to $40.68 a barrel, while WTI crude gained 18 cents, or 0.5%, to $38.46 |
| The rupee pared early gains to settle 16 paise lower at 73.64 against the US dollar on Tuesday due to dollar buying by banks and oil importers. |
| The US dollar traded steady on Wednesday. The yen rose 0.1 per cent while the euro slipped 0.1%. The offshore yuan traded at 6.7791 against the greenback. |
| Spot gold prices in India rose 0.02% to Rs 50,910 per 10 gm against the previous week's average of Rs 50,591. In global markets, gold was little changed at $1,952.77 an ounce. On MCX, gold futures traded flat at Rs 51,932, while silver futures too remained stable at Rs 69,309 a kg. |
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India plans law to ban cryptocurrency… India plans to introduce a new law banning trade in cryptocurrencies, placing it out of step with other Asian economies which have chosen to regulate the fledgling market. The bill is expected to be discussed shortly by the federal cabinet before it is sent to parliament, according to people familiar with the development who who asked not to be identified, citing rules on speaking with the media. The government will encourage blockchain, the technology underlying cryptocurrencies, but is not keen on cryptocurrency trading, officials said.
Read More Fund managers say bull market on… Bank of America Securities' latest fund manager survey showed more investors are now saying that a new bull market has begun. The survey, which took place between September 3 and 10 and saw 199 participants who together manage $601billion, showed that 58% of fund managers believe that a new bull market has started compared to 25% who said the same in May. About 18% of fund managers surveyed are overweight equities but far from being dangerously bullish, said the BofA report.
Read More Dalio says dollar status under threat… The dollar's decades-long position as the global reserve currency is in jeopardy because of steps the U.S. has taken to support its economy during the Covid-19 pandemic, according to Ray Dalio, founder of hedge fund giant Bridgewater Associates. While equities and gold benefited from the trillions of dollars in fiscal spending and monetary injections, those efforts are debasing the currency and have raised the possibility that the US will go too far in testing the limits of government stimulus, Dalio said in an interview.
Read More Kalpataru aims to be debt-free by March… Kalpataru Power Transmission aims to completely divest all its power transmission assets and become net debt free by March 2021, a top executive told ET, adding the company is also scouting for acquisition opportunities abroad. The company aims to focus on engineering and construction jobs, and project management assignments in India. Simultaneously, it is looking to expand its presence in Latin America, the Nordic region, the United States and Africa.
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China, India add troops in border buildup… China is believed to have brought forward more troops in the past week along the LAC in Ladakh, taking its total troop deployment to approximately 52,000. Of these, 10,000 troops have been deployed on the southern bank of the Pangong Tso that has witnessed hectic military activity since the manoeuvres of August 29-30. These details form part of a latest comprehensive assessment by security forces on the "eyeball to eyeball" deployment of Indian and Chinese troops in Ladakh. The report notes that Chinese aggressive moves have been met with "mirror deployment" on the Indian side.
Read More Lenders invoke Biyani pledged shares… Some of the lenders to Kishore Biyani such as PE funds Apollo Global Management, Aion and Blackstone, along with RBL Bank and Axis Finance have recently invoked pledges to take equity stakes in Future Group firms while a few equity investors, such as Norges Bank, have downsized their holdings. In the past week, several lenders have invoked pledges and taken control of large chunks of Biyani's shares in listed group companies including Future Lifestyle Fashions, Future Supply Chain, Future Consumer and even flagship Future Retail.
Read More LVB-Clix merger plan in limbo… Lakshmi Vilas Bank said it "substantially completed" the due diligence for its proposed merger with the Clix Group, even as the extended deadline for the completion of the process ended Tuesday, and said that the two parties would continue to discuss the future course of action. This leaves doubts on whether the fate of the deal still hangs in balance.
Read MOre Meanwhile... Small, mid-sized realtors face threat… Credit profile of small-to-mid-sized real estate developers may get impacted thanks to a likely drop in residential demand during this financial year ending March 31, 2021. Crisil says residential demand is expected to plunge 50-70 per cent year-on-year in FY21 as the Covid-19 pandemic is crushing economic activity and big-ticket spends. As a result, the rating agency expects credit profiles of small-to-mid-sized and leveraged developers to take a bigger hit compared with their larger peers, it said.
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