A full 50 years after its inception TCS touched a market cap of $100 billion. Both Reliance and HDFC Bank are also within striking distance of the mark. TCS saw a sharp rally after the Q4 results saw the company 4.5% growth in profits and stable margins. The markets were also impressed by the company’s ability to consistently maintain its share of digital revenues among the best in the industry. What really appealed to the market was the 1:1 bonus which is likely to bring TCS within a more palatable trading range. The stock has gained nearly 50% from the lows of Rs.2200 that it had touched last year.
Bond yields across Asia spurted to a 4-year high as there is a deluge of US debt likely to hit the market. In India the 10-year bond yields are already up by 60 basis points since the credit policy announcement early this April on a more hawkish tone. This rise in US bond yields is only likely to harden Indian yields further. Even in the US, the bond yields have gotten very close to the 3% mark, a level last seen in January 2014. With rising inflation across the developed world and hardening oil prices, the bond yields are expected to harden still further. That is not great news for the bond portfolios of banks.
Aluminium prices fell sharply by over 9.4% on Monday after the US decided to soften its sanctions on Rusal, the Russian aluminium giant. Rusal is the world’s largest aluminium producer outside of China and had come under pressure after the US had imposed sanctions on the company. However, the US clarified that its concern was more with the promoter of Rusal, Oleg Deripaska, and was willing to soften sanctions if Oleg relinquished control over the company. This was confirmed by the US Treasury secretary. This is likely to have a steeply negative impact on Indian aluminium stocks.
The National Stock Exchange could be effectively moving nearly 20% of all the F&O stocks into the physical settlement system from July 2018. This was announced by SEBI after its last board meeting and the intent is to reduce the speculation and the loss farming in less liquid counters. While the existing unexpired contracts of April, May and June will be allowed to trade in the old format, all new contracts from July onwards will be for physical settlement only. That means, if one buys or sells these stock futures, then it will either have to be an arbitrage position or settled by delivery.
In what could be one of the biggest Ecommerce divestment deal in India, Flipkart could be selling out to Wal-Mart for a consideration of $12 billion. Over the last few years, Flipkart had been struggling to keep pace with the deep pockets of Amazon and this deal with Wal-Mart will give Flipkart a huge leverage with respect to taking on completion. Ecommerce is an extremely upfront investment oriented business and Flipkart was finding it hard to compete with Amazon, although it had maintained its market share. The agreement is likely to be finalized in the next 15 days. Key early investors in Flipkart like Tiger Global, Accel Partners and Softbank are also expected to hive off their stakes partially. While the Bansals are also expected to rake in big money, their stake and involvement may continue.
The Singapore Exchange (SGX) has confirmed that all its existing SGX Nifty futures position will be shifted to the new contracts effective June 04th. This was necessitated after the Indian exchanges had refused to share live data with the global exchanges to prevent export of Indian market volumes; as was happening in the case of Nifty futures. The settlement of the new Nifty futures contracts will happen monthly based on publicly available information. It remains to be seen to what extent it sustains interest of FPIs and how many of them actually continue their positions in the SGX Nifty.
