The US Federal Reserve's hint at raising interest rates by 2023 is feared to derail Indian markets rally with foreign flow getting drained out of emerging markets. The US central bank’s hawkish comments last week send markets worldwide in a sell-off mode. Federal Reserve officials held interest rates near zero but stunned investors by signaling it might raise interest rates at a much faster pace than assumed, sending yields and the dollar sharply higher. So, what are the implications of the...

Domestic mutual funds are increasing their holdings in banks despite fears of bad loans amid the turbulence caused by pandemic. However, March quarter earnings of banks suggest that concerns over asset quality are less worrisome and second covid wave impact is likely to be manageable. As the corporate cycle seems to be clearly turning which banks are expected to benefit from it. Are banks a safe bet now? To discuss that Mint's Nasrin Sultana is joined by Amit Premchandani, Fund Manager...

In the last monetary policy review, the Reserve Bank of India left key interest rates unchanged as widely expected. The monetary policy stance remains accommodative, and the tone is explicitly dovish. It is quite evident that growth remains the policy priority for the central bank. The RBI has also reiterated its stance of keeping liquidity ample and borrowing costs low. The question is in order to ensure a faster recovery do we require more support from fiscal authorities? RBI has ensured...

The economy contracted by 7.3% in FY21, its first contraction in four decades. India’s real GDP grew 1.6% in March quarter. Private consumption, which accounts for more than half of GDP, improved to 5-quarter high in March quarter. GDP for FY21 and fourth quarter indicated that unlocking of business operations drove economic growth for two quarters, confirming growth momentum had started to build in since July. Also, India’s fiscal deficit for FY21 was lower than the revised estimate by...

Market valuation of all listed firms on the BSE touched $3 trillion for the first time, led by gains in smaller stocks. With small and midcap stocks outperforming benchmarks, investors seem to be shifting to the riskier segment. How risky is this bet and how long are these stocks likely to rally. To understand that Mint’s Nasrin Sultana is joined by Nimesh Chandan, Head of Investment (Equities), Canara Robeco.

Despite the challenges due to covid, biggest rich Indians have seen an increase in wealth. A stock markets boom, driven partly by quantitative easing, and flurry of new listings have created wealth for some, much more than perhaps could have been expected in a year so badly disrupted by covid. To understand, where is the hot money flowing? And what are the newfound assets by emerging rich Indians post covid, Mint's Nasrin Sultana is in conversation with Satheesh Krishnamurthy, EVP,...

Stricter restrictions imposed by states to check the spread of covid-19 has hurt mobility in the country, and various assessments indicate, that could deepen the economic impact in the coming weeks. Mobility indicators such as Google retail & recreation and Apple driving index have dropped significantly in the past weeks after the second wave intensified in the country. So, the question is what will be its economic and India's sovereign rating implication? And will the 2021 budget...

With the grim covid situation India’s sensitivity to global liquidity is a risk for market condition. The pandemic and a slowdown of foreign institutional investors or FII to India is exposing markets vulnerability. In April, FII outflows from Indian equities were at $1.5b after six consecutive months of inflows. DIIs, however, were net buyers for second straight month. So, the question is how long domestic liquidity will support markets amid health crisis. To understand that Mint’s Nasrin...

Pandemic stress and subsequent regional lockdown have not yet curbed the markets’ optimism for FY22 earnings. However, localized restrictions are expected to lead to some downward revisions in earnings, but that could be limited as large corporates are better prepared this time. A large economic damage like last year is unlikely to happen. The question is will second wave of covid delay earnings recovery in FY22? To discuss that Mint's Nasrin Sultana is joined by Hiren Ved, Director, CIO and...

As more states are imposing stricter restrictions to control covid, mobility in the country is impacted. Even as ramp up in vaccination programme amid the brutal second wave in India may see a limited economic impact, there is a fear that lockdowns will slow down business activities and will lower spending and income. Many economists have already downgraded their GDP target for FY22. What is the economic assessment of covid second wave and consequent regional lockdowns in India? To discuss...

There is a growing concern about the rise of covid cases and the second wave engulfing the country. Markets have lost around 8-9% from record highs touched in February while foreign institutional investors (FIIs) have turned net sellers of Indian equities first time in seven months. As more states have joined the worst-affected state of Maharashtra in entering quasi-lockdown possibly hitting consumer demand and overall economic revival. So, where are the markets headed now? Will corporate...

From lows hit in March last year after lockdown, small and midcap stocks outpaced Sensex which has gained over 70% in the period. Earlier in 2017, small stocks had a robust rally leading to losses in following year as stocks with no fundamental support lost steam while valuations peak. But the tide has clearly peaked in FY21. The latest data showed that 9 out of 10 stocks sold by mutual funds in February were index heavyweights or large caps. So, to understand how are midcaps poised for in...

The Insurance Amendment Bill 2021 is passed by parliament to increase FDI limit in the insurance sector to 74% from the current cap of 49%. Besides, country’s biggest insurance company LIC is gearing up to launch its IPO soon. LIC is also the biggest DII which invest directly into equities. So, to understand how these factors will change the landscape of the insurance industry in India, Mint's Nasrin Sultana in conversation with Shyamsunder Bhat, CIO, Exide Life Insurance.

Market regulator Sebi has asked mutual fund houses to restrict the exposure to additional Tier I and II (AT1 and AT2) bonds. This directive comes after write-offs in such bonds issued by two banks in the past year had hit investors. The Department of Financial Services had written to Sebi to withdraw the guidelines related to the change in valuation norms. While industry body Association of Mutual Funds in India (AMFI) had said that it is in discussion with Sebi to further smoothen the...

Sustainable funds showed resilience during the covid pandemic market sell-off. Driven by growing investor interest in environmental, social, and governance issues, the global sustainable fund universe pulled in around $45.6 billion in the first quarter of 2020. The last three years have seen a steady increase in assets in sustainable funds. Assets remain dominated by Europe, accounting for over 80% of the global sustainable fund universe. Currently, with many funds now formally considering...

In the budget for FY22, the government has made around 34% higher allocation to infrastructure development. The government has expanded its ‘National Infrastructure Pipeline’ to cover more projects, while also setting up a new development finance institution. The government is looking to monetize brownfield projects, track asset monetization, set up investment trusts to attract global funds, and provide enhanced funding to states and autonomous bodies. It is also considering another rescue...

After a blockbuster rally following the budget, markets is losing sheen. Most recently, there are fresh concerns over rising number of covid cases leading to fears of a deeper impact on economy. Adding to those uncertainties is the fear of rising global inflationary risks as crude prices have been on the surge. The sell-off in equities worldwide is also following a sudden rise in 10-year bond yields across the globe.  So, now as we are approaching FY22, the question is what are the top...

Corporate earnings grew at a robust pace in the December quarter even as the overall economy has not yet completely recovered from the brutal covid blow. Now that q3 earnings session is almost over and the Union budget for FY22 is behind us, the key question is what are stock markets focusing on as benchmark indices are hitting record highs day after day. To discuss that Mint's Nasrin Sultana is joined by Santosh Singh, head of research, Motilal Oswal Asset Management Company.

The Indian Budget for FY22 marks a clear change in the government stance from being fiscal conservative to growth focussed. Higher expenditure is geared towards capex while the govt seems committed to reforms like strategic disinvestment including PSU Banks, higher FDI in insurance, and most importantly new asset reconstruction company for bad-loan cleanup. Now the question is will the recovery get a further push by these provisions in the budget? What does the budget hold for banks and the...

With the Indian economy set to contract in FY21 and fiscal deficit to rise due to covid induced pain what are the big announcements markets are expecting from the FM this year. Analysts say that the key focus of government in this budget would remain on growth with a clear focus on capex revival and manufacturing, boosting healthcare and sanitisation. Would this set the tone for bigger directional change for inclusive growth? How will the markets react if there are negative surprise in the...

The fiscal trend during FY21 turned a corner in the October-December quarter with sequential improvement in revenues, particularly in GST and income tax collection, alongside already-elevated excise duty collections helped by higher petroleum taxes. With pandemic risks largely capped for now, India has experienced a faster-than-expected pace of economic normalization. However, at the end of November the government’s fiscal deficit soared to 135.1% of FY21 Budget Estimates (BE). So, the...

India Inc. is expected to stay on the earnings growth path supported by the festive season and a revival in economic activity from the sluggishness when the country faced tighter pandemic-related curbs. The profit bounce in most companies is also likely to be driven by aggressive cost cuts and the lag effect of lower input prices. So, are corporate earnings which have been depressed for many years showing reasonably strong growth? Or, are we entering into an earnings upgrade cycle which will...

The year 2021 is expected to be a better one for markets with likely strong recovery in both economy and earnings compared to a covid-hit 2020. Markets have not only recovered from over a 20% slump in March last year but also hit record highs multiple times in 2020.  Both the BSE Sensex and Nifty gained 15-16% in the year, the best yearly performance of the Indian markets since 2017 when benchmarks surged 28%. So, what will be the big trends to watch out for in stock markets in 2021? To...

The year 2020 has been historically a tough year as the pandemic struck economies in an unprecedented way. The volatility and uncertainty sparked by COVID-19 pushed Indian rupee to hit a record high of 76.90 against the dollar, but the infusion of excess liquidity by both government and central bank across the globe supported the risk appetite and reversed the uptrend. The Indian rupee weakened 3% against the dollar in 2020, making it the worst-performing currency among Asian peers. So,...

Despite the serious impact of the covid-19 pandemic on the Indian and global economy, the year 2020 is ending on a positive note for stock markets investors. Markets are at a new high as we are set to enter 2021. However, it is a foreign liquidity-driven rally and how long will this rally last in Indian markets in 2021. To discuss that, Mint's Nasrin Sultana is joined by Saion Mukherjee, head of India equity research, Nomura.