FPIs grow wary of India’s growth potential
Brokerages bullish on Infy despite tepid Q4
Acquirers of PSU banks may get to hold 26%
Surat diamond industry reels amid workers’ exodus
Hi there. Welcome to ETMarkets Morning, the show about money, business and markets. I am Sandeep Singh.
Let’s start with a quick glance on the state of the markets.
Dalal Street looked in mood to extend gains after Thursday’s rally. Nifty futures on Singapore Exchange traded 10 points higher at 8 am (IST). Stocks in other Asian markets fluctuated in early trade Friday. US stocks hit fresh records overnight, supported by buoyant economic data and a strong start to the earnings season. US Treasuries advanced despite better-than-expected retail sales and jobless claims. The yield on 10-year treasuries fell six basis points to trade at 1.56%. Crude oil held its recent gains, and the US dollar traded steady after a series of declines.
That said, here’s what else is making news.
The second wave of coronavirus appears to have dimmed India’s allure as an investment destination for FIIs which had earlier preferred Mumbai to other competing emerging markets due to the robust growth prospects in Asia’s third-biggest economy. Market watchers said foreign funds may not pull money out of India as they did in the first wave since the vaccination programme is expected to pick up pace. But their approach, at least in the immediate future, would be rather circumspect.
Brokerages have retained bullish views on Infosys even after the company’s March quarter revenue growth missed estimates. Analysts are bullish on the stock due to the strong deal momentum and outlook for the ongoing financial year. Jefferies has lowered the target price to Rs 1,600 from Rs 1,620 while maintaining a ‘buy’ rating, and Haitong Securities maintained a ‘buy’ rating and revised the target price to Rs 1,541 from Rs 1,555. Kotak Institutional Equities has a ‘buy’ rating and raised target price to Rs 1,600 from Rs 1,530.
Analysts say Bharti Airtel’s new corporate structure allows it to split its revenues from the connectivity and digital services businesses, and in turn, cut its statutory payouts towards licence fees and spectrum usage charges. This could potentially boost the company’s operating income from the India wireless business in the current fiscal. Analysts expect Bharti to go for a second round of restructuring to monetise its digital assets, once the business hits a certain scale, especially as the digital services business is growing rapidly and market opportunity is slated to rise multi-fold.
Acquirers of PSU banks that are up for privatisation may be allowed to hold a minimum 26% stake and also be given a longer time frame to trim it down to this level, a flexibility that the government thinks will help elicit a good response from investors. The government currently owns more than 51% stake in all public-sector banks, which means an investor acquiring them would need to cut down their holding over time.
The fear of rising Covid cases has already impacted the diamond trade of Surat. Nearly 25% of migrant workers engaged in cutting and polishing of diamonds in Surat have left the city, which has become the epicentre of cases in Gujarat in the past one week. There are around 10 lakh workers in diamond trade, of which 4 lakh are migrant workers who come from the states of Madhya Pradesh, UP, Rajasthan, Bihar and Jharkhand. The shortage in workers is already being felt in Surat, which cuts and polishes 14 out 15 diamonds in the world.
And lastly, most fund managers believe bitcoin is in a bubble, a global fund managers’ survey by Bank of America Securities showed. About 74% of the fund managers surveyed believe bitcoin is in a bubble and only 7% think equities are in a bubble. Around 177 participants with $530 billion in assets under management responded to the global fund managers’ survey. Fund managers also believe bitcoin is the second-most crowded trade, with technology stocks continuing to be the most crowded.
NOW Before I go, here is a look at some of the stocks buzzing this morning…
State-owned copper manufacturer Hindustan Copper said it raised ₹500 crore by selling shares to institutional investors.
Wipro marked its best quarterly performance in nearly a decade, with profit jumping 27% in the three-month period ending March 31and revenue up 3.4%, as the Bengaluru-based IT major witnessed increased deal wins.
Increasing coronavirus cases have resulted in a scarcity of medical oxygen in the healthcare industry, putting the spotlight on Linde India, a supplier of medical oxygen to hospitals and industrial gases to corporations.
The board of IL&FS has increased the recovery target to Rs 61,000 crore from Rs 56,000 crore. It also said that Rs 43,000-crore debt has already been resolved.
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!
