India Market Buzz: Electric Vehicles Spark Investor Fancy

India Market Buzz: Electric Vehicles Spark Investor Fancy

Before the trading day starts we bring you a daily digest of the key news and events that are likely to move markets.

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(Bloomberg) — Before the trading day starts we bring you a daily digest of the key news and events that are likely to move markets.

Good morning, this is Ashutosh, an equities reporter in Mumbai. Asian markets are buoyant, while the US stocks closed firmly in the green overnight after cooling inflation offset a somewhat hawkish Federal Reserve policy decision. It’s the kind of backdrop that’s likely to keep our markets in good cheer today.

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Banks shares are lagging behind the market rally

While the broader market has hit a record high, lenders — who make up a fifth of the total market cap — are among sectors yet to fully catch up. In fact, one out of ever three members of BSE’s banking gauge is trading below the 200-day moving average, and the index itself is still 3% short of its record. The reason: banks are still scrambling for deposits to meet rising loan demand. In the latest quarter, lenders ramped up their efforts to garner deposits by offering higher interest rates, but this has squeezed their margins — a trend that’s likely to persist.

Electric vehicles spark investor excitement

Investor can’t get enough of electric-vehicle themes. Mirae Asset is about to launch its first passive fund focused on this space, and the NSE has even created an index to track companies in the EV ecosystem. Bloomberg’s custom index of 15 EV firms has jumped 75% in last year, triple the benchmark’s gains. And that’s impressive, considering EVs only make for 2% of India’s four-wheelers and 4% of two-wheelers.

Green energy goals to provide tailwind for infra firms 

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Shares of infrastructure companies are set to outpace the benchmark Nifty for the fourth year in a row. With Modi’s old team still in charge, the focus on building roads, bridges, and airports isn’t likely to change. These companies are gearing up to invest in energy transition to meet demands of the booming economy, says Moody’s Ratings. The agency reckons India’s renewable energy goals will need $190 billion to $215 billion of investments over the next seven years, plus another $150 billion to $170 billion for upgrading the power grid.

Analysts actions:

  • Britannia Cut to Hold at ICICI Securities; PT 5,250 rupees
  • Honasa Consumer Rated New Buy at HSBC; PT 550 rupees
  • Jyothy Labs Raised to Buy at ICICI Securities; PT 520 rupees
  • Restaurant Brands Asia Cut to Hold at ICICI Securities
  • Tata Motors Raised to Add at Emkay Global; PT 1,050 rupees
  • Torrent Power Reinstated Hold at ICICI Securities

Three great reads from Bloomberg today:

  • Citi Sees India’s Allure Enticing Global Bond Funds to Stay Put
  • The Tiny Trades That Brought Down Segantii’s Giant Hedge Fund
  • Bathroom Off Limits at Archegos When Key Stocks Were On Move

And, finally..

The rupee may see an uptick, tracking gains in emerging Asia spurred by US inflation, my colleague Malavika Kaur Makol notes. Slight easing in local inflation may also support sentiment. The rupee has been one of Asia’s most resilient currencies this year due to the RBI’s interventions. However, it’s still lost ground this week, just sitting near its record low against the dollar.

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—With assistance from Malavika Kaur Makol.

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