November 2024 - GCIC Finserv

November 25, 2024November 25, 2024

Nifty 50 Surges Over 400 Points, Sensex Reclaims 80K: Experts Highlight Top Stock Picks

Nifty 50 Surges Over 400 Points, Sensex Reclaims 80K: Experts Highlight Top Stock Picks

Building on the momentum from Friday’s rebound, the Indian stock market started the week strong, with significant gains in early trading. The Nifty 50 index opened higher at 24,253, quickly climbing to an intraday high of 24,330, marking a 423-point rally from its previous close of 23,907.

Similarly, the BSE Sensex opened at 80,193 and peaked at 80,452 in the morning session, recording a jump of 1,355 points. The Nifty Bank index also saw robust gains, opening at 52,046 and reaching an intraday high of 52,232, reflecting an impressive 1,100-point surge.

Factors Driving the Rally

Political Stability After Maharashtra Election Results
The decisive victory of the BJP-led alliance in Maharashtra’s elections played a crucial role in boosting investor sentiment. According to Palka Arora Chopra, Director at Master Capital Services, the win is expected to bring political stability and strengthen pro-business policies, positively influencing sectors such as infrastructure, urban development, and manufacturing.

“The continuity of policy direction, particularly in infrastructure development, is likely to attract further investments. This could lead to significant activity in the construction and real estate sectors,” Chopra added.

Reliance’s Strong Performance Amid Geopolitical Tensions
Reliance Industries, a heavyweight in the Sensex, gained around 2.5% during early trade. Mahesh M. Ojha, AVP at Hensex Securities, attributed this to rising crude oil prices driven by escalating geopolitical tensions. The company is poised to benefit from increased margins on existing stockpiles, along with continued growth in its retail and telecom businesses.

“Reliance looks strong for both short-term and long-term investors, given the positive trends in its core and diversified operations,” Ojha noted.

Sectoral Outlook

The election results have shifted investor focus from defensive sectors like FMCG and pharma to more aggressive plays in railways, infrastructure, and banking.

Avinash Gorakshkar, Head of Research at Profitmart Securities, observed that government initiatives in infrastructure and railways could drive demand in these sectors. Additionally, increased credit demand from infrastructure projects is likely to benefit banking stocks.

“The alignment of policies between the central and Maharashtra state governments ensures a conducive environment for growth in these sectors,” Gorakshkar stated.

As the market gains momentum, experts suggest keeping an eye on infrastructure, banking, and energy sectors for potential opportunities.

November 18, 2024November 18, 2024

Tata expands iphone manufacturing in India with Pegatron

Tata expands iphone manufacturing in India. Tata Electronics has taken a significant step in strengthening its position in the global technology sector by acquiring a 60% stake in Pegatron’s iPhone production facility in India. This strategic move enhances Tata’s role in the iPhone supply chain and aligns with efforts to diversify Apple’s manufacturing operations beyond China amid geopolitical tensions.

Under the new agreement, Tata Electronics will oversee the facility’s daily operations, while Pegatron retains a 40% stake to provide technical expertise. This partnership underscores Tata’s growing influence in iPhone manufacturing and reinforces India’s role as a critical hub for high-tech production.

This acquisition complements Tata’s existing facilities, including an assembly unit in Karnataka acquired from Wistron, another Taiwanese company. The addition of Pegatron’s Chennai plant, which employs over 10,000 people with an annual production capacity of 5 million iPhones, and a planned facility in Hosur, Tamil Nadu, further solidifies Tata’s expansion in the sector.

Beyond increasing manufacturing capacity, this deal signals Tata’s entry into the global iPhone supply chain, positioning it as a competitor to Foxconn, the other major iPhone manufacturer in India. The move is part of a broader strategy by Tata to establish itself as a leader in advanced technology manufacturing. This ambition is also evident in Tata’s partnership with Taiwan-based Powerchip Semiconductor Manufacturing Corporation (PSMC) to develop India’s first AI-enabled semiconductor fabrication plant in Gujarat.

Analysts project that India’s share in global iPhone production could grow significantly, with the country expected to account for 20-25% of total iPhone shipments this year, up from 12-14% last year. The Pegatron facility will play a key role in meeting this rising demand.

Regulatory approval from the Competition Commission of India (CCI) is still pending, and financial details of the transaction remain undisclosed. However, this acquisition marks a pivotal moment for Tata Electronics, underscoring its commitment to scaling operations and becoming a key player in the global technology landscape.

In summary, Tata expands iphone manufacturing in India with Pegatron’s iPhone production facility is a bold step towards enhancing its manufacturing capabilities and securing a prominent position in the global supply chain, while also contributing to India’s growing importance in the technology sector.

November 12, 2024November 18, 2024

Rupee could decline by 8-10% if Trump secures a second term, according to an SBI report.

The rupee could decline by 8-10% against the U.S. dollar during Trump’s second term, according to an SBI research report, with the Indian currency recently hitting a historic low on November 11, 2024. Titled U.S. Presidential Election 2024: How Trump 2.0 Impacts India’s and Global Economy, the report suggests the rupee may experience a temporary depreciation before stabilizing.

Trump’s return to office is seen as a catalyst for select markets, but attention is shifting to broader economic effects and potential realignments in supply chains. According to the report, Trump’s administration presents both challenges and opportunities for India. While short-term risks like increased tariffs, a strong dollar, and potential restrictions on H-1B visas could create market volatility, there are long-term benefits for India, such as expanding its manufacturing sector, diversifying export markets, and enhancing economic independence.

The report notes that while the rupee could weaken, this may be beneficial for export sectors like textiles, manufacturing, and agriculture. However, depreciation could also increase import costs, especially for commodities like oil, with minimal inflation impact projected.

In addition, the report anticipates that foreign direct investment (FDI) patterns may shift, as India is now receiving FDI in diverse sectors such as renewable energy, maritime transport, and medical equipment. The Trump administration’s potential for H-1B visa restrictions could also impact Indian IT firms, potentially raising costs as companies may need to hire locally in the U.S.

SBI’s analysis concludes that while the rupee may experience fluctuations, it is unlikely to face extreme depreciation, and India’s broader economic base may provide resilience amidst the evolving U.S.-India economic relationship.

November 11, 2024November 18, 2024

Mutual fund monthly SIP inflow crosses Rs 25,000 crore mark for first time

SIP inflow crosses Rs 25k crore in October 2024, a notable increase from ₹24,509 crore in September. This is the first time SIP inflows have exceeded the ₹25,000 crore mark.

The number of new SIP registrations also saw significant growth, with 63.7 lakh new accounts in October, up from 58.7 lakh in September.

As a result, the total number of SIP accounts rose to 10.12 crore, reflecting a 2.5% increase from 9.87 crore in the previous month.

The total Assets Under Management (AUM) from SIPs reached ₹13.30 lakh crore in October, marking a 2.3% rise from ₹13.01 lakh crore in September. This growth comes amid a broader trend of rising equity inflows, with the mutual fund industry recording its 44th consecutive month of positive inflows.

The retail folios have now crossed 17.23 crore, with the total AUM standing at ₹67.26 lakh crore.

Anish Mehta, National Head of Sales, Marketing & Digital Business at Kotak Mahindra Asset Management, noted that investors are increasingly favoring large-cap funds, particularly in the current market environment. He observed, “Investors are recognizing the stability of large-cap funds, and there’s also a shift toward multi-cap and flexi-cap funds for a more balanced risk approach.”

Venkat Chalasani, CEO of AMFI, commented on the broader trend, saying, “October 2024 marks the 44th consecutive month of positive equity inflows, continuing since March 2021. This sustained momentum in SIPs and AUM is a testament to the growing maturity of Indian investors, who are focusing on long-term wealth creation through mutual funds.

November 9, 2024November 18, 2024

Exclusive: Documents reveal that India’s food delivery giants Zomato and Swiggy have violated antitrust laws

An investigation by India’s Competition Commission (CCI) found that food delivery giants Zomato & Swiggy have violated antitrust laws by favoring certain restaurants through exclusive business practices, according to confidential documents reviewed by Reuters. The report revealed that Zomato secured “exclusivity contracts” with partners, offering lower commissions in return, while Swiggy assured business growth to restaurants that listed exclusively on its platform.

These exclusivity agreements between the companies and selected restaurant partners limit competition in the market, according to CCI’s investigative findings. The antitrust probe, which began in 2022 following a complaint from the National Restaurant Association of India, highlights concerns about the impact of such practices on smaller food outlets.

The confidential documents, shared with Zomato, Swiggy, and the complainant in March 2024, have not been previously disclosed. After Reuters’ report, Zomato’s shares dropped 3%, though they were flat earlier in the day. Swiggy’s IPO prospectus lists this investigation as an “internal risk,” warning that any violation of the Competition Act could result in significant fines.

Swiggy informed investigators that its “Swiggy Exclusive” program was phased out in 2023, though it plans to introduce a similar program called “Swiggy Grow” in non-metro areas. Both Swiggy and Zomato have transformed India’s food delivery landscape as smartphone use and online ordering surged, listing hundreds of thousands of outlets on their platforms.

The investigation found that both companies also required restaurants to maintain pricing parity, reducing market competition by preventing discounts on other platforms. Zomato was noted for enforcing price restrictions, sometimes with penalties for non-compliance. Swiggy allegedly warned some partner restaurants that their rankings would suffer if they didn’t follow price parity.

The final phase of the CCI case involves a decision from its leadership, which is still evaluating the investigation’s findings to determine any potential penalties or required adjustments to Swiggy’s and Zomato’s business practices. This decision may take several weeks, and both companies could still challenge the findings.

Zomato’s stock has surged to a valuation of approximately $27 billion since its 2021 listing, while Swiggy values itself at $11.3 billion in its IPO. According to Macquarie Capital, Swiggy’s projected food order values for 2024-25 are $3.3 billion, about 25% lower than Zomato’s.

Both companies are rapidly expanding into the quick commerce sector, offering grocery delivery within minutes. Last month, India’s largest retail distributors’ group requested the CCI to investigate alleged predatory pricing practices in this segment by Zomato, Swiggy, and competitor Zepto.

Read Aslo: Tata expands iphone manufacturing in India with Pegatron

November 8, 2024November 18, 2024

Indian Hotels profit up by 232% for Q2, reaching ₹554 crore, with revenue rising by 27%.

Indian Hotels profit up by 232% to shareholders, reaching ₹554.6 crore for the quarter ending in September 2024. In the same quarter of the previous fiscal year, IHCL had reported a net profit of ₹167 crore, according to the company’s exchange filing.

Operating revenue grew by 27.4%, rising to ₹1,826 crore compared to ₹1,433 crore in the prior year’s period. Total income for the current quarter reached ₹1,890.2 crore. Expenses for the company also saw an increase, climbing to ₹1,502 crore from ₹1,248.68 crore a year earlier.

In Q2 results Indian Hotels profit up by 232%, The company’s Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) stood at ₹501.27 crore, up 41.3% from ₹354.78 crore in the year-ago quarter. On the NSE, shares of IHCL closed at ₹688.30 per share, marking a slight rise of 0.53%.

November 5, 2024November 25, 2024

Noel Tata Joins Tata Sons Board as First Family Member Since 2011

Noel Tata, chairman within the Tata Group, has been appointed to the board of Tata Sons, the holding company of the group, through an online resolution on Friday. This move marks him as the first Tata family member to hold seats on both the Tata Trusts and Tata Sons boards since 2011.

Following his appointment, Noel met with Tata Sons chairman N Chandrasekaran, signaling the start of what sources describe as a “healthy working relationship,” according to the Economic Times.

With Noel Tata’s addition, the Tata Sons board now includes three Tata Trusts-nominated directors: TVS chairman emeritus Venu Srinivasan, former defense ministry official Vijay Singh, and Tata himself. Presently, Noel Tata, along with Srinivasan, Singh, and Mehli Mistry, are members of the executive committee overseeing Tata Trusts.

The Tata Sons board currently comprises nine members: two executive directors, including Chandrasekaran, three non-executive directors—Noel Tata, Srinivasan, and Singh—and four independent directors.

November 4, 2024November 25, 2024

India’s Factory Growth Speeds Up in October, PMI Reveals

India’s manufacturing sector gained momentum in October after three months of slowdown, driven by a notable improvement in demand. This uptick has positively influenced job creation and bolstered business confidence, as highlighted in a recent survey.

According to the HSBC final India Manufacturing Purchasing Managers’ Index (PMI) by S&P Global, the index rose to 57.5 in October from 56.5 in September, which had marked an eight-month low. This figure also surpassed an initial estimate of 57.4. “India’s manufacturing PMI surged significantly in October, reflecting broadly improving operating conditions,” stated Pranjul Bhandari, HSBC’s chief India economist.

“New orders and international sales growth indicate strong demand for India’s manufacturing sector,” Bhandari added.

Both output and new orders hit a three-month peak, signaling heightened demand, with international demand recovering from a previous low in September. Rising demand for Indian goods saw orders from regions like Asia, Europe, Latin America, and the U.S., boosting the outlook for the coming year.

“Business optimism is high, driven by expectations of sustained consumer demand, upcoming product launches, and pending sales approvals,” Bhandari further noted.

With demand surging, companies ramped up hiring, marking the eighth consecutive month of employment growth. This trend may ease pressure on the government, which faces challenges in creating well-paid jobs for new workforce entrants. However, economists project moderate job creation over the next year, as per a recent Reuters survey.

Inflationary pressures rose, with input and output prices climbing. Input costs hit a three-month high due to increased material expenses, wage demands, and transportation fees, leading firms to pass these costs to clients more quickly than in September.

India’s inflation reached 5.49% in September, nearing the RBI’s 2-6% target range and primarily driven by rising food prices. Despite this, a recent Reuters survey indicated that a slim majority of economists expect the RBI to cut interest rates in December from the current 6.50% to 6.25%.

November 4, 2024November 25, 2024

Wiping Out Rs 8 Lakh Crore in Investor Wealth: Reasons Behind the Drop

On Monday, Indian benchmark equity indices fell significantly, impacted by declines in banking, financial, and IT stocks, as investors remained cautious ahead of the U.S. presidential election and the potential for further interest rate cuts by the Federal Reserve.

The BSE Sensex dropped by 1,409 points (1.77%) to 78,316, while the Nifty50 fell by 454 points (1.87%) to 23,850 around 10:58 am. The total market cap of all companies listed on the BSE saw a reduction of Rs 8.44 lakh crore, bringing it to Rs 439.66 lakh crore.

Top losers on the Sensex included Reliance Industries, Infosys, ICICI Bank, HDFC Bank, and Sun Pharma, which together contributed to a 420-point drop. Other major players like L&T, Axis Bank, TCS, and Tata Motors also added to the decline. Sector-wise, indices for Nifty Bank, Auto, Financial Services, IT, Pharma, Metal, Realty, Consumer Durables, and Oil & Gas recorded losses between 0.5% and 1.7%. Meanwhile, the India VIX, a measure of market volatility, rose by 5.2%, reaching 16.73.

Key Factors Behind the Market Decline

Caution Ahead of the U.S. Election
Investor sentiment in India was affected by the uncertainty of the upcoming U.S. presidential election on November 5, with a close race between Democratic Vice President Kamala Harris and Republican former President Donald Trump.
Anticipation of Fed Meeting Results
Investors are also cautious about the U.S. Federal Reserve’s policy meeting on November 7, where a quarter-point rate cut is expected. While this may encourage foreign investments in India, investors await the Fed’s stance, adding to market caution.
Weak Q2 Corporate Earnings
Disappointing Q2 results from Indian companies have further weighed on the market, with foreign investors offloading Indian stocks.“The Indian market faces challenges from slowing earnings growth, with Nifty’s estimated EPS growth for FY25 likely dropping below 10%. At current valuations of around 24 times FY25 earnings, sustaining a rally may be difficult,” said Vijayakumar.
Increase in Oil Prices
Oil prices surged over $1 early Monday following OPEC+’s decision to delay a planned output increase by one month. Brent futures rose by $1.18 to $74.28 per barrel, while WTI crude increased by $1.20 to $70.69 per barrel.

November 4, 2024November 25, 2024

5 Reasons why you need a Financial Distributor

Health is wealth. Good health is not just the absence of any illness, but complete physical and mental wellness of an individual.

In today’s world, stress affects both physical and mental health – and one contributor to stress is the state an individual’s finances.

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Here’s where your financial doctor, or advisor, comes into the picture. Just like you need a doctor for your physical or mental health, you need one for your finances too.

So, how can your financial doctor help you?

Understand your financial health –Your financial advisor will work with you to assess your current financial health – your assets, liabilities, income and expenses. He/she will also consider any expected future obligations (insurance, taxes, other long-term expenses) and sources of income (pension, gifts, etc.) to get a complete picture of where you stand.
Assess your goals –Once your advisor maps out where you stand, he/she will understand your investment goals, time frame and risk appetite. An understanding of risk appetite will allow your advisor to determine your asset allocation. He/she will also assess your retirement needs at this stage.Invest now
Build the financial plan –The next stage is where your advisor charts out a comprehensive financial plan for your goals. This plan will include details such as where to invest, how much to invest, for how long to invest. He/she has the expertise to understand how all these products will work in tandem for you to achieve your goals. The plan will also look at your retirement plan, your projected withdrawal rates during retirement and have the best- and worst-case scenarios for your expected life span. If you’re already investing for your goals, your advisor will review your current habits and suggest a course of action. If you’re investing without goals in mind, your advisor will help you allocate your existing investments for your goals. Read why goal-based investing is important here. Once your plan is ready, it’s on you to implement it.
Help you understand where you’re investing –When building your financial plan, it is important to understand the products you’re investing in. The pros and cons, how it fits in your portfolio, what it can do for you – your advisor will help you with this.
Regular reviews and adjustments –It’s a good idea to revisit your investments regularly to check if you’re on track, review what you’re doing and see if you need to adjust your plan to incorporate new goals or modify/remove existing ones. Depending on your needs, your advisor will suggest changes to take you closer to your goals.

Financial advisors are the doctors you need for your financial health. With their expertise, you can get the best out of your investments.

Month: November 2024

Tata expands iphone manufacturing in India with Pegatron

Rupee could decline by 8-10% if Trump secures a second term, according to an SBI report.

Mutual fund monthly SIP inflow crosses Rs 25,000 crore mark for first time

Exclusive: Documents reveal that India’s food delivery giants Zomato and Swiggy have violated antitrust laws

Indian Hotels profit up by 232% for Q2, reaching ₹554 crore, with revenue rising by 27%.

Noel Tata Joins Tata Sons Board as First Family Member Since 2011

India’s Factory Growth Speeds Up in October, PMI Reveals

Wiping Out Rs 8 Lakh Crore in Investor Wealth: Reasons Behind the Drop

Key Factors Behind the Market Decline

5 Reasons why you need a Financial Distributor

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