- Zero maintenance charges
- Zero fees for demat account opening
- Volume based brokerage
-
Weekly wrap-up: Market updates, news and insights for the week ending 6th July
Publish date: 6th July, 2018
News: Trade war fears pick up as tariffs kick in on July 06th
Investment perspective:
- US Tariffs on nearly $35 billion worth of Chinese imports will kick in from the midnight of 6th July unless there is a rethink on the subject by Donald Trump.
- China is expected to respond with retaliatory tariffs on US imports to the tune of $50 billion. The impact overall will exceed $100 billion and could weaken the Yuan.
Related reads:
5 indicators to gauge the intensity of current trade war
6 things to know about China’s falling Yuan
News: Tata Motors and Titan give cautious guidance for coming quarters
Investment perspective:
- In case of Titan the cautious guidance was more with respect to the expected slowdown in jewellery sales, which has for long been the staple of Titan’s growth and stock performance.
- Tata Motors was spooked after Ralph Speth of JLR warned of a likely impact of £1.20 billion on annual profits if BREXIT actually kicks off and JLR has to shift its production.
Related reads:
5 things that Raghuram Rajan said about BREXIT
News: Reliance Industries guides for a likely Golden Decade in its 41st AGM
Investment perspective:
- Mr. Ambani has projected the consumer segment of the Reliance Group to contribute as much as refining and petrochemicals in the coming decade.
- Big story in the AGM, apart from Jio’s growth to 21.5 crore subscribers, was the Fibernet foray to engage small businesses across 1100 cities on the broadband platform.
Related reads:
The Reliance Jio impact on Indian telecom
4 things to learn from Reliance AGM
News: Government Minimum Support Prices (MSP) sharply above the previous levels
Investment perspective:
- Government confirms 150% of cost of production covered by MSP but analysts and economists expect the higher MSP to contribute to food inflation.
- The sharply higher MSP will be demand accretive for companies that rely on rural consumption and the stock price impact was visible in FMCG companies and auto stocks.
Related reads:
India’s food inflation problem
News: Indian Rupee slips past the Rs.69/$ mark
Investment perspective:
- The rupee, despite efforts from the central bank to defend the rupee around 69, has seen pressure due to the ongoing trade war, rising bond yields and capital outflow worries.
- Rs.70/$ remains a critical tipping point for portfolio managers. Weaker rupee makes imports costlier and also puts hedging pressure on importers and dollar borrowers.
Related reads:
What lies ahead for the rupee?
Rupee at 69: What is the way forward?
News: Infosys valuation gap with TCS touches an all-time high
Investment perspective:
- After the correction on Thursday, Infosys quotes at 17.5X trailing earnings while TCS quotes at 27.9X trailing earnings, a historically record valuation gap
- TCS has widened its valuation gap in the last few quarters due to its more efficient operational metrics and a greater thrust on digital side of the IT business.
Related reads:
Sector research: Technology in a different league
Why TCS buyback could be a good opportunity
News: Indian companies announce plans to raise Rs.75,000 crore via NCDs
Investment perspective:
- The list of companies looking to raise funds through the NCD route includes marquee names like Tata Steel, Reliance Industries, Idea Cellular, PNB Housing, Vedanta etc.
- This is on top of the Rs.2,45,000 crores that was already raised through this route in the first 6 months of 2018, indicating frenetic activity in the debt markets.
Related reads:
5 key things to know about India’s corporate debt
News: Karnataka announces Rs.34,000 crore farm loan waiver; but with riders
Investment perspective:
- This loan waiver was part of the promise made by the JD(U) and the Congress party ahead of elections. Mr. Kumaraswamy heads the coalition government supported by Congress.
- This cost is being made up by imposing higher taxes on non-essentials. Liquor, fuel and electricity in the state of Karnataka will become dearer to compensate for this giveaway.
Related reads:
5 things to know about farm loan waivers
News: Asia M&A space sees deals worth $734 billion in the first half of 2018.
Investment perspective:
- The biggest deal in Asia was the acquisition of Shire PLC by Takeda Pharma for $62 billion. The other big deal was Wal-Mart buying a controlling stake in Flipkart for $16 billion.
- The deal pipeline is the first half has seen significant deals even outside of China, with two of the largest contributions coming from Japan and India.
Related reads:
What you need to know about the Tata Steel / Thyssen Krupp deal
News: Bloomberg Dollar Index (DXY) rally appears to be fizzling out
Investment perspective:
- The dollar has touched its lowest level in 3 weeks after a massive 6.5% rally since the month of April. The trade war outcome is still not too clear to traders.
- However, dollar bulls are worried that even as the US equity markets may outperform, dollar may come under pressure if central banks reduce their dollar holdings.
Related reads:
Why India should be concerned about the US-China standoff?
News: Gujarat Gas acquires GAIL’s stake in Vadodara Gas
Investment perspective:
- The 50% stake of GAIL may be acquired at a consideration of around Rs.250 crore and will help Gujarat Gas to expand its footprint in the entire state of Gujarat
- With a view to expanding its presence in the industrial state of Gujarat, Gujarat Gas will also be participating in the city gas auctions scheduled to take place in mid-July.
Read latest research reports Trade now Open an account
Click here to go back