- 6 weeks ago
Experts believe that both exports and domestic defence manufacturing will benefit, making the sector one of the strongest investment themes in the market right now.
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NewsTranscript
00:00good morning and welcome you with us here in business today and we're going to get you all
00:21that you need to know ahead of markets opening in just a few moments let's first take a look
00:25at what's hot in the financial and corporate space this morning commerce minister piyush guhal issues
00:31a big statement on india u.s trade deal says india and the u.s are in active trade talks teams from
00:38both sides are engaged and discussions are progressing well he hopes for a fair and
00:42equitable trade agreement in the near future u.s stocks climb after the white house confirms
00:51president trump will meet chinese leader xi jinping next week in asia the long-awaited talks raise
00:56hopes of easing trade tensions s p 500 gained 0.6 percent nasdaq up 0.9 percent u.s futures little
01:04changed ahead of highly awaited inflation data oil prices surge over five percent after u.s imposes
01:13new sanctions on russia's top crude firms brent crude jumps five and a half percent to 65.99 per
01:20barrel while shares of exxon bp and shell climb on geopolitical concerns gold prices rise over two
01:28percent after two consecutive sessions of losses
01:31make an india boost for defense defense acquisition council clears 79 000 crore rupee military procurement
01:40to strengthen army navy air force defense talks will be in focus
01:44deloitte india projects f526 growth at 6.8 percent amid strong domestic demand policy reforms and
01:53festive consumption risks remain from global trade uncertainties and inflation pressures
01:59joined this morning by my colleague shailendra patnagar as always shree fan and listen editor
02:09markets as well as abhishek basu malik co-founder and fund manager shri rama managers good morning
02:15abhishek good morning shell good to have you both with us let's take a look at the setup first shell if
02:20you could just decode the charts for us and then i'll come to abhishek for his view on all the
02:24factors at play this morning
02:26well abha a very good morning to you and thank god it's friday we look forward to the weekend but
02:35with a lot of hope uh 25 900 is back on the charts and that's good news uh against the backdrop of
02:43very positive macro developments which is the u.s and indian trade talks are back on focus
02:50uh there is enough and more indication that india will now stop or reduce substantially its buying
02:57of u.s crude oil russian crude oil and that is a positive for the broader macro therefore look at
03:04indian textile companies look at indian exporters they were beaten down dramatically because of this
03:11trade pact being put on the back burner they will come back into focus also on the hot seat will be
03:18ongc india's largest oil explorer you mentioned a five percent uptick in oil prices that's very
03:24beneficial but it is negative for ril negative for psu omc companies so this is the broader trade setup
03:32nifty is looking good a sideways trend is expected over the last 15 trading sessions nifty is up
03:39seven percent so a sideways move ahead for friday abha all right and we did see that reaction on the
03:46omcs yesterday while reliance was still holding strong but we'll talk more about that in just a
03:51minute uh union minister of commerce and industry piush goyal makes a big statement on the india u.s
03:57trade deal during germany visit he said that india and the u.s are in active dialogue teams are
04:02engaged and talks are progressing he also hopes for a fair and equitable agreement in the near future
04:07listening we are in dialogue with the united states of america our teams are engaged we recently had
04:16the commerce secretary visit the u.s and he met with his counterparts we continue to engage with them
04:26and talks are progressing
04:30we hope to work towards a fair and equitable agreement in the near future
04:41let's also go across to karishma sudhani for more on this karishma because clearly something that's
04:48uplifting the markets at least overnight on wall street we're watching out for trade today as well
04:53take us through the key uh highlights or takeaways from the talk so far
04:56abha well a lot has been happening between india and the u.s and right now commerce minister is
05:04currently in the eu uh i'd say he's a man on mission because he's trying to steal the deal with
05:09the eu but he's also of course keeping a strict tab on the fact how our trade talks with the u.s is
05:15ongoing and like he said uh uh it is uh a fair and equitable uh uh deal that we are looking at and
05:22we are hopeful that the first tranche could conclude within this year prime minister narendra modi not
05:27attending a seance summit is slightly a back set because we were expecting his and trump's meeting
05:33uh at least with the whole uh fiasco to have a face-to-face conversation and to have some clarity
05:40on what will be done with the russian crude especially on the fact that now us eu and uk
05:45all the three nations have imposed sanctions and it's going to indirectly impact india because we
05:50are highly dependent on uh russian struggle all right karishma thanks so much for that let me also
05:57go across now to abhishek on all of these factors at play abhishek you know this morning of course we're
06:03watching out for uh you know a steady a start to the markets lots of areas in focus we're keeping an eye
06:10on on the result of the uh ongoing sanctions on crude the trade talks and of course domestic
06:15triggers like consumption and earnings what's uh your view on the market setup
06:19abha good morning to you and all your viewers i think uh you know like what we've seen in the last
06:26uh you know few months primarily the indian market is reacting to uh the u.s tariff situation and the
06:36situation continues to remain volatile uh today i saw that there is some challenge uh again cropping
06:43up between u.s and canada so uh even when there is a deal in place the the volatility of the situation
06:51may not completely go away so that's something to keep in mind i think uh you know the given the way
06:58the u.s uh president and the presidency is running at this point in time i think the market participants
07:05would be you know well advised to take it that uh there is going to be uncertainty continuously going
07:14forward uh the the level of uncertainty may go down but it is going to continue now uh with relation
07:21to oil etc i think those are not very big challenges because uh oil is not spiking up a great deal i mean
07:29it was uh although it's up uh you know a bit today but it's not beyond that 70 80 dollar uh kind of
07:37level consistently so it's not that big a deal uh what we have to look for is basically domestic
07:45consumption domestic manufacturing and i think both the government as well as the private sector
07:51is focusing on that so that's what we are looking for okay so that's the focus and we'll come back
07:58to some of those pockets and stocks as well get abhishek's view in detail uh we're counting down to
08:03open let me also focus on some of the news makers today we've got the defense acquisition council
08:08clearing proposals worth 79 000 crore rupees uh to enhance the armed forces capabilities so stocks and
08:15focus there cochin shipyard mazdoc be ml grse bdl a whole host of them the india defense index as
08:23well we'll keep an eye on that as markets kick off for the day we've also got a few earnings so colgate
08:28palmalive q2 net profit is down about 17 percent a miss on estimates so watch out for colgate on
08:34opening as well we'll see how it reacts to earnings meanwhile lauras labs net profit has actually
08:38surged it's beaten estimates uh lauras has actually reached a 1.95 billion rupees uh so it's
08:45beaten estimates there on the earnings front as well and um on earnings i think those are a couple
08:52of the key ones that we'll be watching out for but defense is really where a lot of focus will be
08:56we'll also keep an eye on whether or not we continue to see some amount of a downtick on
09:00those omcs while reliance has been holding steady so far but let's not completely ignore what's
09:05happening on the oil front and let's keep tabs on that just counting down to open now and we've seen a
09:10pretty you know sideways move for the week so far but global markets have been showing some cheer
09:16overnight on the back of those trade talks so we're hoping to see some of that reflect in our markets
09:21this morning as well opening bell for you on your screen now nifty 50 just about flat as anticipated
09:28we're really watching out for that 26 000 mark on the nifty we were hoping to see it this week but
09:33maybe next week uh nifty bank also steady quiet this morning it about three four tenths of a percent
09:39up quite a roller coaster of a day yesterday on some of those it majors uh hindalco bel those are
09:45some of the stocks on top of the charts they're hindalco up two and a half percent infi continuing
09:49its uptick we're pro continuing its uptick on gc as expected up six tenths of a percent adhani
09:54ports on the gainers list as well on the downside hul siplar kotak mahindra bank some of the names
09:59uh that are seeing a cut this morning actual down about three and a half percent actually
10:03uh titan's taking a breather today so has access and tara consumers so some of these just taking a
10:08breather uh but bigger cuts coming in on uh an hul for instance tech mahindra also sitting out
10:14in today's trade as is an eternal uh quick look at some of the defense names yes defense is definitely
10:20spiking up eight tenths of percent right now let's pull up some of those individual stocks for you as
10:25well and take a look shortly there you have it bharat dynamics is up about three percent right now
10:29uh we'll pull up some of the others like bml coach and shipyards up one and a half percent we were
10:34expecting this move across some of these defense names as well shell what are you picking up on
10:39opening and clearly it's defense all the way this morning
10:41it's a defense on an offense abha if you may uh if if we look at it bdl uh 3.2 percent higher
10:53be ml 1.8 percent higher bel rocketing 1 percent higher these are again a defense psus from the
11:01government part as far as shipbuilders are concerned uh more gains 2.4 percent on coaching garden
11:07reach 2.1 percent on coaching shipyard apart from that uh let's look at the oil impact
11:15i'm looking at reliance uh this is uh down a bit as far as uh prices are concerned and the price is
11:23there right in front of you i want to see what ongc is doing uh this is a major beneficiary of uh spike in
11:30oil prices and of course uh the broader market in a very good shape 1300 stocks in the green 962 in the
11:38red the rally is led by the metal space you mentioned endalko look at national aluminium look
11:45at nmdc as well all of them in top shape so that's the structure of the market so far a mild sideways
11:51trend and that is what is expected after a seven percent 1700 point rally on the nifty in the last
11:5715 sessions abha all right let's take a look at uh what's happening with vidanta news coming in
12:05uh the vidanta group is looking to invest one lakh crore in urisha uh promising new job opportunities
12:12as well a one lakh crore investment that they've announced look at the stock vidanta is up about
12:16a little over two percent right now so a sharp move on the back of that news coming in abhishek let me
12:22come across to you on vidanta first on the back of these plans that they've announced they're going
12:27strong on that they've also been in news for other reasons such as inorganic acquisitions recently
12:31what's your view on vidanta and also the larger metals basket yeah i think if you look at again
12:37just uh taking a step back i think metals is a place uh which is doing well globally and uh vidanta
12:45obviously is one of the heavyweights in metal so uh obviously it's rubbing off on them uh vidanta as a
12:52group has always been uh you know always trying to expand so uh it always well for them i think now
12:58they have some tailwind uh at the industry level so it covers well for them for now
13:04okay so vidanta looking good on the chart six month move also about 18 19 percent coming in
13:11on vidanta uh from the metal basket abhishek would you have any other favorites so to say
13:16oh not really i mean uh i i tend to stay away from a lot of these uh very cyclical companies
13:25but if i had to uh probably i would go with more uh you know so-called uh ancillaries of metals so
13:32maybe the mining companies uh that would be you know probably more to my liking uh rather than go
13:40directly with the metal players okay so i'm just going to keep a focus on metals just for a moment
13:45because a lot of action building there uh shell if we just take a look at you know some of the charts
13:50and and i can see um our producer twinkle is is is firing some of those monthly and quarterly charts
13:56as well just for us to be able to see the trend but if if you were to kind of highlight some of the
14:01key movers uh in the last few weeks or months you know and and observe where perhaps the opportunity lies
14:08uh absolutely abha it's aluminium and therefore hindalco and nalco uh national aluminium and
14:20alco of course india's largest uh producer from the aditya birla stable up 5.6 percent this week
14:27and if you look at the monthly gain uh hindalco is up seven percent national aluminium is a step ahead
14:3310 percent higher so far in october and on today's basis it's the top gainer in the metal space
14:413.3 percent higher i'd also keep an eye out on vedanta something that you've already mentioned
14:47the de-merger of its six subsidiaries is well on its way and a lot of value unlocking will happen
14:54via vedanta so that is a stock for the medium to long term but to chase momentum it's nalco and
15:01all right so that gives you some idea of a strategy within the metal basket let's also focus
15:08on defense abhishek i want to bring you in on this because we've seen that move building across
15:12several of these defense names uh clearly and now with this massive announcement coming in this morning
15:1879 000 crores uh to the uh you know armed forces defense acquisition council clearing that investment
15:24it's going to mean a significant amount of capital invested here uh what's your take on this
15:30and where would you uh look within the defense basket i think defense is going to be a very very
15:36big driver of manufacturing growth in india for a while and it's not going to be only domestic
15:45consumption uh domestic defense but it's also going to be exports so if you look at what is
15:51happening in europe i think roughly 27 countries in europe have already said that they will double their
15:57you know spend on defense and a large number of them uh will actually sort of uh uh you know outsource
16:06parts of their defense manufacturing to companies uh which are essentially european and where india
16:16comes into this play is you have a lot of these you know big companies having uh either collaborations
16:22or manufacturing setups in india so that is an indirect way but i think defense is a huge opportunity the
16:29world is volatile so the recency effect comes in uh every country now wants to be self-reliant on
16:36defense uh so both exports as well as domestic uh you know rearmament is uh very very imminent
16:45the other factor which is very important to understand is that the uh the nature of defense
16:53spending is changing so previously when uh a large part of defense was being spent on say the army
16:59now it's more on gadgets it's a lot more on electronics it's a lot more on surveillance drones
17:06so that is going to be something which is uh going to drive incremental demand okay um you know
17:15shell i i know you're the eternal optimist but uh advanced decline ratio is tilting a bit towards
17:22the negative right now we do we do seem to be cooling off in today's trade not managing to keep
17:29the market afloat there currently um hul what's happening there even colgate actually and that's an
17:36earnings impact a miss on miss on earnings so is i don't know if that's a sentiment factor that's
17:40playing out across other consumer stocks as well uh but colgate's down three and a half percent and
17:45hul is down three and a half percent as well
17:47i think this was profit booking due uh see overall what is happening the breadth of participation towards
17:57the long side is very high in nifty consumption stocks of which both hul and colgate are a part
18:04now money is moving away from them after a fairly decent run up but everybody is waiting with is
18:11waiting with bated breath for the numbers to come out for this month of october which should be november
18:18this is normal profit booking i would not be worried at all about fmcg banks and psus many of their
18:26stocks are showing double top breakouts and that's a very very positive for the market what is also
18:31interesting is look at how bel is moving uh be ml so the theme for today is defense from the news that
18:39you mentioned and broader stocks are showing a bit of correction nothing to be worried about i remain
18:45an optimist okay all right abhishek you know i want to get your view on pharma as well because um
18:52some amount of interest likely to come back there given that we're seeing relief on the trade front as
18:58well uh are you also looking at pharma or do you feel that there are perhaps other bets in the market
19:02right now i think i've i've been a you know sort of uh very positive on pharma at least indian pharma
19:09for a while uh because if you look at uh the real impact of u.s tariffs has been on more on the patented
19:17side of the product basket not on the generics because uh globally we are the cheapest supplier of
19:24medicines and no country whether it is us uk europe can actually afford to say that we will not take
19:32the uh the cheapest word uh version of medicines available uh going by the fact that most of these
19:39countries have very very bloated uh expenditure on public health care so i think indian pharma uh
19:46especially the generic side which is practically 90 percent of it is very very well protected uh so
19:53the entire value chain pharma cdmos everything uh looks very very interesting all right just a quick
20:02look at gold and silver we had been seeing some amount of profit booking there a little bit of
20:07stability yesterday but then back down again today uh shell what's the latest on that front
20:12well abha we've been cautioning our viewers not to get into gold and silver and that's a great call
20:21that has been working out very well silver is down 15 16 percent from its most recent high and there are
20:27more losses in the pipeline gold is down eight percent from its most recent high more profit booking will
20:33be seen i think that trades best is behind us and today 0.8 percent down on silver at
20:411 lakh 47 433 gold is down 0.3 percent at 1 lakh 23 750 these will retrace much more this money will
20:53move into crude oil as also equities so that's how the money movement is happening within asset classes
21:01and of course uh uh financial services stocks are doing very very well abha all right uh buzzing and
21:09pockets the market so keep an eye on some of those segments abhishek shell thanks so much for joining
21:14us and we'll be back at three o'clock with all the action on market closing
21:18we'll be back at three o'clock with all the time today we'll be back at three o'clock with all the time
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