Wednesday, October 20, 2021
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ETMarkets Morning Podcast: What’s fuelling the rally in bank stocks? | The Economic Times Podcast


Hi there, Good Morning. Welcome to ETMarkets Morning, the show about money, business and markets. I am Nikhil Agarwal. Let’s start with the headlines first.

– Charanjit Singh Channi to be first Dalit chief minister of Punjab
– Advent to buy Eureka Forbes for Rs 4,400 crore
– Govt may sweeten PLI for AC, LED makers
– Fresh loans by NBFCs reach pre-Covid levels

Now lemme give you a quick glance on the state of the markets.

Dalal Street is likely to have a negative start this morning. Nifty futures on the Singapore Exchange traded 147 points lower at 8:10 hours (IST). Majority of Asian stock markets including Japan, China and Korea remained closed on Monday due to public holiday. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 1.19 per cent.

Elsewhere, the yield on 10-year Treasuries held at 1.36%. The dollar began the week firmly on Monday with investors in a cautious mood ahead of several central bank meetings, headlined by the Federal Reserve, while looming catastrophe at indebted developer China Evergrande added to markets’ fragility. Oil prices fell on Monday, extending losses from Friday after the US dollar jumped to a three-week high and the US rig count rose. US West Texas Intermediate (WTI) crude futures fell 30 cents, or 0.4%, to $71.67 a barrel.

That said, here’s what is making news.

As EVs rise on global sales charts, so should Sona BLW Precision. The maker of gears and motors could double its EV revenue – perhaps in a couple of years – as this vertical corners a disproportionate share of incremental sales. The share of revenue from the EV segment at the Gurgaon-based company has reached a fifth of the total by June, compared with just 1.3% in FY19. The share of EV revenues to the total is likely to improve to 40% in the next two years. The highest contribution is expected to come from gear sales to EV makers, where the company has a global market share of 6%. The company sees the market share doubling in the next four-five years. The stock is trading at 63 times its projected FY23 earnings, a premium of 40% to global EV suppliers.

Options data are pointing to further upside in banking stocks after last week’s outperformance. The Bank Nifty could outperform benchmark Nifty in the near-term following last week’s technical breakout that had forced traders betting against further advances in the index to square off their positions. Sentiment in the sector was boosted by finance minister Nirmala Sitharaman’s announcement last week to launch a formal government guarantee on the securities receipts that the planned bad bank will issue to lenders as it takes on NPAs from their books. The government’s relief measures for the telecom sector also aided sentiment.

The Tatas have pumped capital of over Rs 5,100 crore in two ecommerce group entities this fiscal so far — the highest-ever fund infusion done in a year by the salt-to-software conglomerate in the digital commerce business. Tata Digital has received Rs 5,025 crore till now this fiscal. This company has now become the flagship ecommerce entity of the group with plans to roll out the SuperApp and has been taking controlling stakes such as in e-grocer BigBasket and digital health company 1 mg. It has also invested $75 million in fitness company CureFit.

LASTLY,

In yet another twist to the tortuous debt resolution at Videocon Group lead consortium lender State Bank of India has approached an appeals court to direct the Committee of Creditors (CoC) to reconsider its decision to accept a 95% collective haircut on the exposure. State Bank of India (SBI) is now seeking directions from the National Company Law Appellate Tribunal (NCLAT) to allow the resolution professional (RP) to invite a fresh expression of interest and a revised resolution plan.

NOW Before I go, here is a look at some of the stocks buzzing this morning…

Welspun India has said it is looking to invest around Rs 800 crore on capacity expansion of its home textiles and flooring businesses over the next two years.

Jindal Steel and Power has won the Kasia mine in the Keonjhar district of Odisha at a 118% premium to the sale value of the ore, boosting its access to quality iron ore and de-risk raw material supplies.

The recent exit of Zomato cofounder Gaurav Gupta does not warrant any disclosure to stock exchanges since he was neither a promoter nor a holder of equity shares at the time of his resignation, the food delivery platform said in a regulatory filing.

SpiceJet has received a waiver of lease rentals of about Rs 300 crore for four Boeing MAX aircraft for the period beginning March 2019, as it prepares to bring them back into service by the end of this month, ET reported.

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 with us for all the market news through the day. Happy investing!



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