All You Need To Know | U.S. Equities Continue To Slide | NDTV Profit - video Dailymotion

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- Asian markets trade mixed ahead of jobs data from the U.S. - #GrasimIndustries sets price for Rs 4,000 crore rights issue at over 12% discount  This and more with Alex Mathew on 'All You Need To Know'. #NDTVProfitLive   Guest List: Geoffrey Dennis, Independent Emerging Markets Commentator _______________________________________________________  For more videos subscribe to our channel: https://www.youtube.com/@NDTVProfitIndia Visit NDTV Profit for more news: https://www.ndtvprofit.com/ Don't enter the stock market unaware. Read all Research Reports here: https://www.ndtvprofit.com/research-reports  Follow NDTV Profit here Twitter: https://twitter.com/NDTVProfitIndia , https://twitter.com/NDTVProfit LinkedIn: https://www.linkedin.com/company/ndtvprofit Instagram: https://www.instagram.com/ndtvprofit/  #ndtvprofit #stockmarket #news #ndtv #business #finance #mutualfunds #sharemarket  Share Market News | NDTV Profit LIVE | NDTV Profit LIVE News | Business News LIVE | Finance News | Mutual Funds | Stocks To Buy | Stock Market LIVE News | Stock Market Latest Updates | Sensex Nifty LIVE | Nifty Sensex LIVE

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00:45 Good morning, and thanks so much for tuning in.

00:47 Happy Friday to you.

00:48 My name is Alex Matthew, and you're watching All You Need to Know.

00:52 Like the name suggests, we try to tell you everything that you need to know

00:55 before the start of trade.

00:56 Let's start with the headlines.

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01:00 US equities continue to slide for a third straight day.

01:03 All benchmarks set to break their nine-week winning streak.

01:07 Bond yields rise across the curve, with the 10-year now close to 4%.

01:12 Asian markets start mixed, with investors wary ahead of important jobs data

01:18 in the US this evening.

01:21 Draft power tariff regulations propose higher return on equity on new storage-based projects,

01:27 NTPC, Adani Power, among others, to benefit.

01:32 Grossam Industries sets price for its 4,000 crore rupee rights issue

01:37 at over 12% discount to the current market price,

01:41 promoters to bring in 1,200 crore rupees at the very least.

01:46 Kumar Mangalam Birla says Capex from private sector is picking up,

01:50 says that the government spending on public infra is welcomed.

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01:58 Now, US equities declined overnight, with them losing ground for a third straight day,

02:04 and all benchmark indices are set to snap their nine-week winning streak.

02:09 Risk assets have remained on the back foot for a little while,

02:12 as bond yields have continued to rise in the US,

02:15 and they did rise once again sharply overnight.

02:18 Traders have reduced expectations for interest rate cuts at major central banks this year,

02:24 after the latest data has pointed to greater resilience among major global economies.

02:29 US treasuries have risen across the curve yields,

02:38 with the 10-year yield up as much as eight basis points to about 4%.

02:43 For context, about a week back, they were trading at less than 3.8%.

02:47 The latest data that caused the shift in expectations was that US companies increased hiring in December,

02:53 and wage gains continued to ease.

02:56 Private payrolls have increased by 164,000 last month,

03:00 and that's the most since August, according to the latest figures from the ADP Research Institute.

03:05 Investor attention will now turn to the government's monthly jobs report that is due on Friday.

03:11 Now to put some of this into context and to tell you what to expect going forward,

03:15 I'm joined by Jeffrey Dennis, who is Independent Emerging Markets commentator.

03:20 Jeff, thanks so much for taking the time this morning.

03:22 Help us understand why we're seeing such a sharp rise in bond yields,

03:27 and we've seen that over a couple of sessions.

03:29 We're now at 4%, whereas a week ago we were at 3.8%.

03:33 Seemingly, the bets of very aggressive rate cuts are being pulled back.

03:40 I think that latter point is absolutely one of the keys here.

03:44 I think there's two things going on here.

03:46 First of all, we had such a strong fourth quarter, and especially a very, very strong December,

03:52 that I think there's just some natural profit-taking as you go into the new year,

03:56 investors being a little bit more cautious.

03:59 But if you want a real factor, I think you put it down to the fact that the FOMC minutes

04:05 really tried to make the point that the Fed was not particularly thinking about rate cuts at this stage.

04:12 So the minutes turned out to be much, much more bearish or somewhat more bearish than Chair Powell was

04:21 in his press conference following the December meeting.

04:25 At the same time, one of the regional governors also argued that they may even have to raise rates again.

04:33 So I think what that's done is push the market's views of rate cuts out to perhaps the second half of the year.

04:40 I've said the second half of the year for quite some time is more likely,

04:44 and I think that's contributed to this sort of risk-off situation where bond yields have gone up,

04:50 albeit they're still way down from where they were just a few weeks ago,

04:54 and also a sharp move higher in the dollar so far this year.

04:59 It's all classic sort of risk-off, and I think you put it down to those two factors.

05:04 Now, ordinarily, the jobs data or the information on jobs that we got overnight from the U.S.

05:11 would have led to a little bit of a bullish sentiment, but that hasn't really played out.

05:16 I'm just trying to understand. We're looking at a structural move, obviously,

05:20 over the course of the next year and a half, perhaps, with interest rates expected to come down.

05:26 So this, would you say, is a classic speed bump in the road?

05:31 And structurally, we're going down for bond yields and up for equities over a period of time,

05:38 assuming, of course, that that soft landing does take place.

05:42 Yes, you're right. I think it's a speed bump.

05:45 But I think it's worth pointing out that with the size of the U.S. trade deficits,

05:50 and in particular the size of the U.S. budget deficit and the level of debt in the U.S.,

05:56 I think it's wrong to assume that bond yields will go that much lower.

06:01 I suspect bond yields for 10 years will probably go to 3.5 percent, maybe by the spring or the early summer.

06:08 But I don't think they're going to go much lower than that.

06:11 And therefore, some of this good news has already come through.

06:15 So I am constructive on equities this year, particularly constructive on emerging markets,

06:20 but I'm constructive on equities generally.

06:24 But I don't think we're going to have as good a year as last year because the drivers here,

06:28 the macro drivers, will not be as helpful.

06:32 They will be helpful, but not as helpful as they were in 2023.

06:37 And, of course, we're sitting, certainly in the U.S. anyway, at very, very high valuations.

06:43 Now, on the jobs numbers, I wouldn't worry too much about that.

06:48 I don't think the market should worry too much also about the ADP figures.

06:52 The payroll numbers today or today your time are going to be much, much more important.

06:58 And I think that's going to give us a better idea of whether the softening of the labor market that we've seen recently is continuing

07:04 and what the outlook is for wages.

07:07 So we're in a situation right now where bad news is good news.

07:11 We've got a softer labor market report, especially on the wage inflation front.

07:15 The markets would like that because it would bring, potentially bring earlier Fed rate cuts into play.

07:23 Last very quick question.

07:25 Jeff, when do you expect the rate cuts to actually pan out?

07:28 What are your own expectations?

07:30 I think it's going to be sometime around the middle of the year.

07:34 Now, we do know that the Fed is talking about three rate cuts this year.

07:38 The market seems to want more, at least it did want more.

07:42 I think it's a question of interest rates staying higher for longer.

07:47 And if we do get rate cuts this year, which I think we will, they'll probably all be in the second half.

07:53 Maybe we get one in June, but it's going to be around mid-year with the first one and then potentially a couple more later in the year.

08:00 Yes. All right. Thank you so much, Jeff, for joining us this morning and giving us that perspective.

08:07 All right. Let's shift focus to the Indian equity markets now and talk about the F&OQs.

08:13 Agam is joining in to tell you just that.

08:15 Morning, Agam. What are you picking up?

08:17 Good morning, Alex. So yesterday we were expecting weakness, but that didn't come through.

08:21 And in fact, we saw strength on the benchmarks with advances coming through.

08:25 So it was a mixed sort of a day, at least when it comes to the broader markets.

08:29 The nifty futures did see unwinding, even as the index advanced by around 7.7 percent.

08:36 And as far as the bank nifty futures is concerned, that is also where we did see strength.

08:41 Let's pull up the bank nifty futures. And that should be up for you on your screen as well.

08:45 That's where we saw an up move around 1 percent with an increase in open interest towards 2.4 percent.

08:51 When it comes to the options market, as we move into a new week, we are keeping an eye on a 500 point range once again.

08:58 And we once again shift focus to the 22000 mark where we do have max OI around the calls.

09:06 And of course, the 21500 put is where we are seeing the max OI in puts.

09:11 That's the 500 point range that we are expected to see the nifty to move within.

09:16 Now, in terms of what happened yesterday, we saw the nifty move higher.

09:20 But along with that, we also started to see a lot more writing around higher levels in terms of calls

09:25 and some unwinding of puts around the 21000, 8000, 21900 marks.

09:31 Talk about stocks and what's really happened there.

09:35 It was a mixed day of trade long seen in Alcom Labs in India cement.

09:39 On the other hand, shorts building up in LTIM, Naveen Florian and Escorts.

09:43 And in terms of stocks, we saw unwinding that is squaring off for positions.

09:47 We saw longs unwinding and looping, but short covering for ONGC, Nalco, GMR Airports and Federal Bank.

09:54 Alex, we are towards the end of the week, a week which has been relatively volatile.

09:59 And well, I reckon that positions today will be taken to be seen as to where we are going to be going ahead

10:08 as far as this upcoming week's concerned.

10:10 All right. Thanks so much, Agam for bringing us those details.

10:13 Let's focus in on a group of stocks that is going to be likely very active in trade today.

10:19 Those are the power stocks. The Central Electricity Regulatory Commission in its draft tariff norms

10:26 for the next five years has raised the return on equity for new storage based hydro projects.

10:33 But more importantly, it has kept the ROE unchanged for thermal power projects.

10:39 Vikas is here to tell you why that is important and to tell you everything that we need to know

10:44 before the start of trade today.

10:46 Vikas, important update coming in for the power sector as a whole. Can you break that down for us?

10:51 Yeah, right Alex. As you rightly said, it has been increased.

10:55 The ROE has been increased for pumped hydro projects and storage based hydro projects to 17%,

11:01 which is a jump from 16.5% earlier for the previous regulation.

11:06 As far as thermal power projects are concerned, for existing as well as for new projects

11:10 that will be commissioned after April 1, the time when the regulation will get effective,

11:15 has remained unchanged at 15.5%. But for transmission projects, it has been reduced to 15% from 15.5%,

11:24 especially for new projects which will be commissioned after April 1.

11:28 Now, this kind of shows the intent of the government that they want to continue with thermal power projects

11:34 as well as they are transitioning to say cleaner fuel based power generation,

11:39 where storage based hydro projects is also one of them, apart from renewables.

11:44 So, why it's important is because most of these companies were expecting that there would be

11:51 reduction in the ROE for thermal power projects, especially because now the focus is shifting towards

11:59 greener projects and also ROE is a fixed cost towards tariff determination.

12:05 So, if you bring down the ROE, the tariffs would also come down and which would be beneficial

12:10 for the customers like you and me. So, that hasn't happened. So, that kind of shows that

12:15 government plans to continue with these kind of projects for coming years,

12:20 especially up till 2030 when new 80 gigawatt of additional power projects are expected

12:26 to come up on the thermal side. This is going to be very beneficial for companies like NTPC,

12:31 which is India's largest thermal power producer. They are also shifting into renewables

12:36 with focus on pumped hydro companies like Tata Power, Adani Power, JSW Energy,

12:42 NHPC which is big time into hydro power and pumped hydro power generation.

12:47 So, these companies are expected to benefit in coming days because of these.

12:52 Absolutely. Thanks so much for bringing us those details. A group of stocks that has gained

12:57 quite significantly in the recent past and will likely be in focus today as well.

13:02 Let's talk about Grasim. The update that came in last evening has to do with the price

13:07 for its 4000 crore rights issue and to tell you more about that and to tell you what the context is

13:14 and what the funds will be used for, I am joined by Mahima. Mahima, what can you tell us

13:18 about the price and why the company is using these funds?

13:22 Right, Alex. As you rightly mentioned, Grasim's right issue is to take place and the record date

13:27 is set at 10th of January. The ratio for this right issue will be for every 179 shares,

13:32 6 shares will be issued and the price is set at 1812 per share which is at a discount of 12.47%

13:40 as per the last closing price, that is yesterday's trading price. Now, how will this be paid?

13:44 The first 25% of this share price will be paid on application. Then first call will be for another 25%,

13:51 then followed by 25%, 25% for second and third call each. Now, this needs to be completed by March of 26th

13:58 and these right shares will of course be traded on the exchanges. If we talk about promoters,

14:04 promoters held 42.75% stake as of September and the promoters are set to deploy 1710 crore

14:11 in this particular right issue. The total right issue stand at 4000 crore as you rightly mentioned.

14:17 The proceeds from the right issue will basically be used for the CAPEX expansions and repaying their debt.

14:22 At present, their debt in the balance sheet stands at around 8000 crores. If we also talk about,

14:28 a brief about how Grasim's CAPEX program is taking place, they have Birla Opus which is a 10,000 crore

14:34 paint business and they've also set up a 1 gigawatt plant in Aditya Birla Renewable and there is one more

14:41 Birla Pivot Tiles business which is a new venture. So, all these CAPEX expansion plans is where

14:46 the proceeds from right issues will be used.

14:48 Alright, thanks so much Mahima. Now, we will be talking about Grasim in a lot more detail in just a bit.

14:53 It's on the Editor's Cut and that's during the Market Open show. So, do stay tuned for that.

14:58 We have to slip into a very quick break. There's more stock specific action on the other side.

15:01 So, do stay tuned.

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18:03 Welcome back. You're watching All You Need to Know.

18:06 Let's focus in on stocks that are likely to be buzzing in trade today.

18:09 And among them, there are updates in the defense space.

18:13 We've got Anushi joining to tell you about some of those and perhaps more stocks as well.

18:17 Anushi, what do you have for us today?

18:19 Morning, Alex. Quite a lot of stocks in the list for today.

18:22 We'll start off with the Ministry of Defense which has come out with order worth Rs. 802 crores with BML and Jupiter Wagons.

18:30 So coming to Jupiter Wagons, they have secured orders worth Rs. 473 crores to build Bhogi Open Military Wagons for the Army units.

18:38 While coming to BML, it has secured another order for Rs. 329 crores.

18:43 Just to go back, H1FY24, the order book stood at Rs. 12,743 crores.

18:49 So quite, and we have seen in the Q3, they have reported quite some strong orders in this category.

18:55 Now the third one in our list is Lupin which has received a tentative US FDA approval for its Tapa glycofluosin and Saxa glypatin tablets.

19:05 These are used for the type 2 diabetes with an estimated annual sales of about $5 million in the US.

19:12 The production for this is going to take place in the Pitamur facility in India.

19:17 Along with this, now we have PFC which has increased its H1FY24 borrowing plan to Rs. 1.05 lakh crores compared to the Rs. 80,000 crores it had planned earlier.

19:27 Do remember that PFC is one of the strongest gainers of 2023 with the company also reporting a loan growth of about 19% and disbursement of 154% growth.

19:39 Along with this, there was this Amphirichek also wherein PFC is among the nine stocks that has been moved from the mid-cap to large-cap category for the mutual funds.

19:48 Now just a reminder today that Nestle is going X-split today with the ratio of stock split of 1 is to 10.

19:56 This is the first ever stock split for the company.

19:58 Just while we are on the stock split, the last stock for today is Vauri Renewable Technologies wherein the board is considering a stock split on Jan 20th for this.

20:07 This stock again has risen by more than 300% in this past one year itself.

20:13 So these are the stocks you should be watching out for today.

20:15 Alright, thanks Anushi for giving us those details.

20:18 Now India is on its way to becoming a developed economy.

20:23 The word coming in from Aditya Birla Group's Kumar Mangalam Birla.

20:27 He adds that the government is setting up infrastructure and doing all the right things to make this happen.

20:33 Listen in.

20:34 I also believe that the government is doing all the right things whether it is building infrastructure, digital properties that are public facing to make this happen.

20:46 So India has already seen with the government putting in so much money into CAPEX.

20:51 What kind of expectation do you have from the private sector now to play into this?

20:55 So I think CAPEX from the private sector is also picking up on different fronts.

21:00 And I think that along with government spend on public infrastructure is potentially a very potent combination.

21:08 Thank you.

21:09 Alright, we'll also talk about Grasim as I mentioned on the Editor's Cut.

21:14 So stay tuned for that.

21:15 For now let's turn to other stocks you want to watch out for in trade.

21:18 And there are several companies that are reporting quarterly updates for the quarter gone by ahead of the earnings season.

21:23 And Harsh is joining in to tell you about some of those.

21:26 Harsh, what do you have on your list today?

21:28 Well yes Alex, good morning.

21:30 Quickly on to some financials actually.

21:33 That's what I'll be covering over the next couple of minutes.

21:36 L&T Finance, very strong loan growth.

21:39 AUM has grown by 31% year over year in Q3.

21:42 You also had retail disbursements which were up 25% year over year at 14,500 crore on a 1 lakh crore book roughly.

21:51 That's quite a large number, impressive number coming in.

21:55 Portfolio retailization now has reached 91% is what they've suggested.

22:01 Also L&T Finance has done a quick fundraise, 500 crore with regard to NCDs is what they've approved.

22:08 Quickly moving on to Utkar Small Finance Bank, that one.

22:12 Gross loan portfolio up 31% year over year.

22:16 Mind you, newly listed as well.

22:18 Total deposits up 18% year over year.

22:21 And the CASA ratio has shrunk just about by a percent versus the year ago period.

22:27 RBL Bank advances up 20% year over year.

22:30 Deposits up 13%.

22:32 Again, you can see the difference between growth of advances and deposits.

22:37 LDR seems to continue to increase and CASA ratio continues to shrink.

22:43 J&K Bank up 14% year over year in terms of loan growth.

22:47 Deposit growth at 9%.

22:50 That's the one for J&K Bank.

22:52 Slightly weakish loan growth also below what the market has done.

22:58 And deposit growth also slightly below what the market has done for J&K Bank.

23:02 All of those will be in focus.

23:04 All right. Thanks so much, Harsh, for bringing us those details.

23:07 Let's shift focus now to the FMCG space.

23:10 And Dabur India has estimated that its revenue in the October to December quarter

23:15 will grow in mid to high single digits.

23:19 We've got Sesha joining in to tell you more about what exactly the company is saying

23:24 and why it's expecting that range of growth.

23:28 Sesha, what can you tell us?

23:30 Dabur India has come up with this Q3 business update now.

23:34 It has said that it expects the revenue growth to be in the mid to high single digit.

23:39 Now, this is against the backdrop of the persistent weakness in rural demand

23:44 as well as price-led benefits have continued to fade.

23:49 Now, growth in rural demand is still lagging urban growth, according to the company.

23:54 However, it is still seeing early signs of revival in consumption.

23:58 Now, cost-saving initiatives, easing inflation, as well as strong international performance

24:04 help the firm forecast a bigger gross margin expansion.

24:08 Segment-wise, food and beverages is estimated to grow in high single digit.

24:13 Home care and personal care division is expected to grow in mid single digit.

24:19 And the healthcare business is expected to grow in low to mid single digit

24:24 due to the delay in the onset of winter season.

24:27 However, in terms of the margins, the operating profit is likely to grow

24:34 slightly ahead of the revenue post-growth as well as post-growth in the year-on-year terms.

24:40 All right, an update on, thanks so much, Sesha, for bringing us those details.

24:44 An update in the manufacturing space.

24:46 The Ministry of Commerce and Industry is presently not considering

24:50 a new production-linked incentive scheme to boost domestic manufacturing of toys.

24:54 Instead, the ministry's focus is on ensuring that the existing plans,

24:59 our PLIs, in various sectors are well implemented.

25:02 We've got Janani joining in to tell us more about that decision.

25:05 Janani, why did they decide not to go ahead with this?

25:09 Good morning, Alex.

25:12 You know, one of the primary reasons for this was to actually take a review

25:16 of all the existing PLI schemes and see whether they have been well utilized.

25:21 Now, this comes at the back of, you know, when there will be whether new PLI schemes could be introduced.

25:27 Now, remember, toys, e-bikes and even footwear were some of the ones that were considered

25:32 that could be, you know, the new PLI schemes.

25:35 As for the review last year, there was expected to be a lot of savings

25:38 and it was said that, you know, from the existing outlay of 1.97 lakh crore,

25:44 new schemes could also emerge and they'll be funded within the existing PLI outlay.

25:49 But right now, the Commerce Ministry has told us that the PLI scheme for toys is not on the annual right now.

25:55 And it is also said that, in fact, the toys industry is doing very well.

25:58 They've seen a revival or a regrowth due to, you know, governmental support,

26:03 such as, you know, increasing the basic custom duty, quality control measures and other governmental support.

26:09 So what we're getting to hear right now is perhaps the government just wants to do a review.

26:14 You know, yesterday, the DPI secretary further added that for the white goods PLI,

26:19 which is for air conditioners and LEDs, a third party review will be undertaken

26:23 and they will actually check if, you know, the beneficiaries are getting the intended benefits out of this

26:28 and if there are any roadblocks in the particular scheme and if that, in fact, needs any course correction.

26:33 So the thought process right now is to check whether all is running smoothly,

26:37 if there are any chinks, you know, in the armour, if the scheme is going well.

26:41 As far as latest data goes, we know that a 95,000 crore worth investment has come in as of September through this scheme.

26:48 All right. Thanks so much, Anandi, for bringing us those details.

26:50 And that brings us to the end of this edition of All You Need to Know.

26:53 India Market Open is up next. So do stay tuned.

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All You Need To Know | U.S. Equities Continue To Slide | NDTV Profit

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