| News Announcement |
Impact Analysis |
| Nifty and Sensex correct sharply on Friday after a 7-day rally |
- Both the Nifty and Sensex were driven down by weak cues coming from the US Fed
- Most frontlines were down led by Auto, banking, IT and even oil market companies saw some serious correction
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| The Fed decided to maintain status quo on interest rates in its March meeting |
- The Fed maintained the repo rates at the range of 2.25% to 2.50% with a dovish stance
- Fed’s stance virtually rules out any rate hike through 2019, hinting at a serious problem of economic slowdown
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| Global investors pull out more than $20 billion from equities |
- This move is surprising considering that global markets have been in the midst of a massive rally
- Nearly 60% of the funds removed from equity funds have been reallocated by investors into bonds
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| Spice Jet may lease the 40 aircraft of Jet Airways that have been grounded |
- This could be valuation accretive for Spice Jet as they will come at an economical cost for the airline
- With Jet market share having fallen sharply, the big market share gains could go to Indigo and Spice Jet
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| Piramal Group may be in the lookout for distressed real estate |
- A large chunk of distressed realty assets are expected to come into the market post the IL&FS default
- Piramal has been looking for deep value properties to buy at distressed rates to ramp up their portfolio
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| Government gets bids worth Rs.9500 crore for 5th tranche of CPSE ETF |
- Anchor investors had already put in Rs.6072 crore worth of bids on the first day itself
- The government had set Rs.3500 crore as the base amount but it is likely to exercise the green shoe option
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| Brent Crude fell sharply from higher levels on growth concerns |
- Even as OPEC cuts and sanctions gave support to crude price, there was resistance from the supply of US shale
- Oil prices fell sharply on Friday after the Fed commentary hinted at a likely slowdown in global growth
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| Government and banks get together to save Jet Airways from bankruptcy |
- The options include an outright sale, change in management and subsequent capital infusion into the company
- Bankruptcy would lead to huge job losses and the government may not be keen on that ahead of elections
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| Government exceeds its full year disinvestment target of Rs.85,000 cr |
- The target was reached with the CPSE-ETF fifth tranche collection and the PFC deal worth Rs.14,500 crore
- The government has again set a target of Rs.90,000 crore of divestments for the fiscal year 2019-20
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| April first could mark a new regime for companies and global investors |
- Companies will be subject to the new Corporate Governance Code and new Insider Trading rules
- Global investors from Mauritius and Singapore will be liable for additional tax on profits on a discretionary basis
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| Global bonds yields may be falling to new lows on growth concerns |
- Most markets were seeking protection from falling growth as was evinced by the Fed commentary after status quo
- It may be recollected that bond yields had shot up last year on hopes that the US may maintain a hawkish tone
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| Steel prices rise by nearly 7% in the last 1 months since mid February |
- This was due to a shortage created by the shutdown of the largest iron ore mine in Brazil
- In addition, the demand from infrastructure has also grown much faster than production leading to rise in price
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| L&T Infotech makes a hostile bid for Mindtree |
- L&T Infotech wants to use Mindtree’s diversified client base to de-risk its concentrated business model
- The original promoters of Mindtree have pledged to fight and stave off this hostile acquisition bid
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| FPI flows into debt touch Rs.9005 crore till March 22nd |
- This is a 17-month high as far as FPI flows into debt are considered, which is welcome after the liquidity crisis
- This basically indicates confidence that the RBI was unlikely to drop rates too much and also in stability of the rupee
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| Bank credit to NBFCs grows by 48% in the year to December 2018 |
- This is starkly higher than the 14.6% growth recorded by bank credit overall in the last 1 year
- Interestingly, commercial credit to industry actually saw negative growth of (-0.7%) during this period
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| Government warns sugar mills against selling sugar below the MSP |
- The government had fixed the Sugar MSP at Rs.31/KG plus applicable GST to ensure good realizations for farmers
- However, it was found that most mills were selling at lower price to get rid of their excess stock of sugar
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| Hedge fund, Crescat, calls for long on gold and short on equity strategy |
- Crescat expects the equity prices to fall with peaking out of economic growth towards the end of 2020
- Crescat is recommending investors to buy gold denominated in Yuan terms rather than in dollar terms
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| Venezuela stops export of oil to India to focus on China and Russia |
- Venezuela was not happy with the fact that India had supported the US in its sanctions on Venezuela
- India is the second largest cash buyer of Venezuelan oil after the US, and that should worsen the Venezuelan crisis
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| RBI wants IL&FS loans to be classified as non-performing assets (NPAs) |
- The government had given special exemption to IL&FS and all its subsidiaries from NCLT bankruptcy proceedings
- RBI has objected to the duality of control since NPA management comes under the purview of the RBI
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| Goldman Sachs upgrades Indian stock markets to Overweight |
- Goldman’s bet is largely on the back of political stability post the elections and the flow of FPI money into India
- Interestingly, Goldman had actually downgraded India to Underweight just 6 months back, a big shift.
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| IT stocks rally during the week on positive NASSCOM projections |
- NASSCOM has projected IT services to grow at 9.2% for the fiscal year 2019-20; nearly 200 basis points higher
- The growth is likely to be largely led by the digital side of the business, which is currently dominated by the big names
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