ETMarkets Morning Podcast: What’s Fueling the Rally in Banking Stocks?

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.

– Charanjit Singh Channi becomes first Dalit Prime Minister of Punjab
– Advent to buy Eureka Forbes for Rs 4,400 crore
– Government can make PLI for AC, LED makers sweeter
– New loans by NBFCs reach pre-Covid levels

Now let me give you a quick look at the state of the markets.

Dalal Street is likely to have a negative start this morning. Convenient futures on the Singapore Exchange traded 147 points lower at 8:10 am (IST). The majority of Asian stock exchanges, including Japan, China and Korea, remained closed on Monday due to a holiday. MSCI’s broadest index of Asia-Pacific stocks outside of Japan fell 1.19 percent.

Elsewhere, 10-year Treasury yields remained at 1.36%. The dollar got off to a solid start to the week on Monday, as investors were in a cautious mood ahead of several central bank meetings headlined by the Federal Reserve, while the looming debtor catastrophe at debtor China Evergrande made markets even more vulnerable. Oil prices fell on Monday, extending losses from Friday after the US dollar soared to a three-week high and US rigging increased. US West Texas Intermediate (WTI) crude futures fell 30 cents, or 0.4%, to $71.67 a barrel.

That said, this is what makes news.

As EVs rise in the global sales charts, so should Sona BLW Precision. The gear and motor maker could double its EV revenue — perhaps in a few years — because this vertical encapsulates a disproportionate share of incremental sales. The Gurgaon-based company’s share of EV segment revenue was one-fifth of its total in June, compared to just 1.3% in FY19. The share of EV revenue in the total is likely to improve to 40% in the next two years. The largest contributor is expected to come from equipment sales to EV manufacturers, where the company has a global market share of 6%. The company expects its market share to double in the next four to five years. The stock is trading at 63 times expected earnings in FY23, a 40% premium for global EV suppliers.

Options data points to further gains in banking stocks after last week’s outperformance. Bank Nifty could outperform benchmark Nifty in the near term following last week’s technical break, forcing traders to bet against further advances in the index to liquidate their positions. Industry sentiment was boosted by Finance Minister Nirmala Sitharaman’s announcement last week to issue a formal government guarantee on the securities receipts the planned bad bank will issue to lenders if it takes NPAs off their books. The government’s emergency measures for the telecom sector also contributed to sentiment.

The Tatas have so far injected capital of over Rs 5,100 crore into two e-commerce group entities this fiscal year – the highest fund infusion ever made in a year by the digital commerce salt-to-software conglomerate. Tata Digital has received this fiscal Rs 5,025 crore so far. This company has now become the group’s flagship e-commerce entity with plans to roll out the SuperApp and has taken controlling stakes such as in e-grocer BigBasket and digital health company 1mg. It has also invested $75 million in fitness company CureFit.

LAST,

In yet another twist on the arduous debt resolution at Videocon Group, lead consortium lender State Bank of India has approached an appeals court to order the Creditors’ Committee (CoC) over its decision to impose a collective haircut of 95% on the exposure. accept, reconsider. State Bank of India (SBI) is now seeking instructions from the National Company Law Appellate Tribunal (NCLAT) to enable the resolution professional (RP) to invite a new expression of interest and revised resolution plan.

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

Welspun India has said it plans to invest about Rs 800 crore in the next two years in capacity expansion of its home textiles and flooring business.

Jindal Steel and Power has mined the Kasia mine in the Keonjhar district of Odisha at a premium of 118% to the ore’s sales value, increasing access to high-quality iron ore and increasing the risks of raw materials.

The recent departure of Zomato co-founder Gaurav Gupta does not warrant disclosure to exchanges as he was not a promoter or shareholder at the time of his resignation, the food delivery platform said in a regulatory filing.

SpiceJet has received a waiver from lease rent of approximately Rs 300 crore for four Boeing MAX aircraft for the period commencing in March 2019 as it prepares to return them to service by the end of this month, ET reported.

Also, check out over two dozen stock recommendations for trading today from top analysts on ETMarkets.com.

That’s it for now. Stay with us all day for all the market news. Have fun investing!