Indian investors made a killing in Covid downtime
Fed holds rate, but advances rate hike schedule
Paytm picks iBankers for IPO, will file DRHP soon
Michael Burry warns of big bubble in stocks
Now let me give you a quick glance on the state of the markets.
Dalal Street looked headed for a major gap-down start as Nifty futures on the Singapore Exchange traded 94 points lower ahead of the opening of Indian markets. Stocks in other Asian markets opened lower. Overnight, Wall Street was jolted after the Federal Reserve projected interest rate hikes sooner than expected. Dow Jones fell 265 points, S&P500 22 points and Nasdaq 33 points.
Elsewhere, the dollar continued its advance. US Treasury yields ticked higher. Crude oil declined as the strengthening dollar reduced the appeal of commodities priced in the currency. Indian gold prices dipped marginally and the yellow metal rose 0.4% in international markets.
That said, here’s what is making news.
Indian equity investors made a lot of money through the Covid downtime. The past 12 months which have been tumultuous for the economy amid the pandemic appear to be a golden period for equity investors. Their chances of earning a more than two-fold return were brighter than the possibility of losing money. An ET analysis of returns of 2,346 traded stocks since April 2020 showed two out of every three stocks have grown least two-fold, while 300 have gained five times or more. In addition, 185 stocks have earned four-fold returns while 450 stocks have given more than 50%.
Shares of oil marketing companies are set for a round of rerating boosted by strong gross refining margins and likely deregulation of liquefied petroleum gas (LPG) prices. Analysts say valuations of BPCL, HPCL and IndianOil remain attractive despite their share prices firming up recently. While FY21 witnessed historic high auto fuel margins, analysts believe they are likely to rise further over the next few years.
One97 Communications, the parent company of Paytm, has finalised bankers for its proposed IPO. The company is understood to have taken on board JP Morgan, Morgan Stanley, ICICI Securities and Goldman Sachs to lead the issue, which is likely to be the largest IPO in the financial sector. Paytm refused to comment on the appointment of the investment bankers. Sources said that Paytm was looking at filing its draft red herring prospectus as early as next month.
The Federal Reserve last night held interest rates near zero, but signalled it expects two increases by the end of 2023, pulling forward the date of liftoff as the economy recovers. The US central bank held the target range for its benchmark policy rate unchanged at zero to 0.25% — where it’s been since March 2020 — and pledged to continue asset purchases at a $120 billion monthly pace until “substantial further progress” had been made on employment and inflation.
Lastly, Michael J Burry, the famed investor who predicted the collapse of the housing market bubble in the US in 2008 and had a movie made about his legendary short position, is now ringing the church bells for another disaster. “People always ask me what is going on in the markets. It is simple. Greatest speculative bubble of all time in all things. By two orders of magnitude,” Burry tweeted late on Tuesday.
Before I go, here is a look at some of the stocks buzzing this morning.
ICICI Bank is beginning to increase exposure to companies as it believes balance sheets in the private sector will grow when the post-Covid recovery gathers momentum.
SBI on Wednesday said its central board will meet next week to consider raising additional tier 1 capital for the current fiscal
In signs on a likely rise in borrowing cost, Karur Vysya Bank on Tuesday increased benchmark rates about 20 basis points.
Brokerages have maintained their buy ratings and raised target prices on Jubilant FoodWorks after the company reported an over three-fold jump in consolidated net profit for the March quarter.
Do also check out over two dozen stock recommendations for today’s trade from top analysts on ETMarkets.com.
That’s it for now. Stay put with us for all the market news through the day. Happy investing!
