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Listen In: Why RBI is worried about a rising Nifty | The Economic Times Podcast


Listen In: Why RBI is worried about a rising Nifty

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.

– Tata plans all airlines under single entity
– Global components crunch hits supply of iPhone 13 series
– SpiceJet to resume Boeing 737 MAX flights
– Invesco may move court if Zee fails to call EGM

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

Dalal Street is likely to have a positive start this morning. Nifty futures on the Singapore Exchange traded 98 points higher at 8:20 hours (IST). Asian shares got off to a positive start on Monday, even as a jump in oil prices to three-year highs could inflame inflation fears and aggravate the recent hawkish turn by some major central banks. MSCI’s broadest index of Asia-Pacific shares outside Japan was flat, after three consecutive weeks of loss.

Elsewhere, the yield on 10-year Treasuries was at 1.45%. Against a basket of currencies, the dollar was firm at 93.292 and just off August’s 10-month top of 93.734. Bitcoin was stable around $43,000. Oil pushed past its July peaks as global output disruptions forced energy companies to pull large amounts of crude out of inventories, while a shortage of natural gas in Europe pushed costs up across the continent. Brent added another 62 cents on Monday to $78.71 a barrel, while US crude rose 71 cents to $74.69.

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That said, here’s what is making news.

Christopher Wood, global head of equity strategy at Jefferies, said the Sensex is headed towards the 100,000 level in five years. In an interview, Hong Kong-based Wood said there is a risk of correction in the short term but he would buy on any correction as India is seeing signs of a cyclical rebound. He also warned that in the event of a global correction, the small-cap space will be a bigger casualty in the Indian market.

Technical and derivative analysts expect the Nifty to cross 18,000 this week, continuing its recent momentum that saw the Sensex touch 60,000 last Friday. Analysts expect the index to find support at 17,600-17,700. There is a possibility of profit booking bouts but they don’t see a deep correction. Sriram Velayudhan of IIFL Securities says with the underlying momentum being pretty strong, the milestone 18,000 mark is well within reach.

Investors with some risk appetite looking to earn more than bank fixed deposits can invest in non-convertible debentures (NCD) of JM Financial Products and IIFL Finance. Given that interest rates are on an uptick, financial planners recommend applying for shorter tenures of up to five years and restrict investments to 10-20% of the fixed income portfolio. With fixed deposits from banks paying less, investors are on the lookout for options to earn higher income. NCDs attract them as they pay higher than FD and there is no tax deducted at source (TDS) as they are held in dematerialised form.

LASTLY,

Investors have been cheering the record-high levels of equity indices, but this seems to be increasing the worries of policymakers at the Reserve Bank of India, which has already flagged adverse fallouts of inflated financial asset prices. Unprecedented fund flows into equity mutual funds, a rising amount of demat accounts, and a surge in the portion of retail trading through discount brokerages are all making some experts fear that equities may have reached unsustainable valuations. The central bank has already proposed a lending cap of Rs 1 crore for nonbank lenders for IPO subscriptions.

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

Zee’s largest investor Invesco has reiterated its call for an extraordinary general meeting (EGM) to discuss the ouster of three directors and the inclusion of six independent board members, signalling that the tussle for control continues.

Jindal Steel and Power (JSPL) aims to start mining at Kasia iron ore block within a month, its Managing Director V R Sharma said. The integrated steelmaker on Thursday announced bagging of the block, which has total reserves of 278 million tonnes (MT).

The London Court of International Arbitration has given the final arbitration award in the matter related to the spat between IndiGo promoters, Rahul Bhatia and Rakesh Gangwal, and no directions have been issued to InterGlobe Aviation.

State-owned power giant NTPC has bagged 1.9 GW solar projects in CPSU Scheme-II tender. With this, NTPC now has over 6.3 GW capacity won through competitive biddings.

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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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