Hello and good morning.
Well its a fresh new day and you're watching Market
Cafe with niece Nahi Shah and with me is Shayanthi
Singh.
And well you're watching ET Now.
Lots of excitement about the elections.
You know yesterday after the poll outcome not very similar,
in fact completely contrasting to the exit polls that we
had seen and define these exit polls.
The opposition stunts the BJP in vital states, resetting Indias
political landscape.
PM Modis Bharatiya Chanta Party failed to clinch to a
national majority after major losses in key states like Uttar
Pradesh, Maharashtra as well as W Bengal.
Regardless, the BJP has emerged as the single largest party
in the Lok Sabha, albeit falling short of its performances
from 2014 and 2019.
The BJP is still likely to form the government but
will now be dependent on key support from its allies.
Here is an Here is an excerpt of what PM
Modi had to say after the clinch the third term
of majority last year.
Name listen in aaj bada mangal hai Ari spamandin NDA
Ki laga tar T Sri bhar Sarkar Bani Thai tea
Sri kar karma des bade fasloka Ek naya adhai likhega
or yeh Modi Ki guarantee hai.
Bharat ko duniya Ki ti Sri badi kanami banali kaliye
NDA Sarkar Puri shakti SE kaam karegi bhaiyaar bhano aatka
Bharat baishvik samadhan ka hissabi Banda hai.
Well that was the word coming in from the Prime
Minister after that sobering win.
But let's also go across and listen in to Times
Now Executive Editor Padmaja Joshis outlook on Modi 3 point
O which will no more be a Modi Sarkar but
an NDA Sarkar.
Take a look at what she had to say that
its more than three-point O.
But this time around instead of Modi Sarkar its going
to be an NDA Sarkar.
And the reason is that on its own, the BJP
hasn't managed to cross the halfway mark of 272 which
basically puts two parties in the drivers seat.
They are going to be critical to the alliance.
The 1st is the TDP of Chandrababu Naidu, which also
by the way has swept to power in Andhra Pradesh
assembly elections along with the Jan Sena and the BJP.
And the 2nd party is Nitish Kumars JDU.
Where do the other parties stand?
Remember Rahul Gandhi had said that its going to be
295 for India.
But the alliance together, the opposition alliance together has manage
to get anywhere close to that mark.
The Congress on its own is at 90, and the
opposition alliance is somewhere in the vicinity of 250 itself,
not managing anything close to the number needed to form
the government.
What does this do?
Then Basically through the day, there were overtures made to
these two major parties, the JDU and the TDP.
Sources suggested that people had called up Nitish Kumar and
offered him the Deputy Prime Ministers post.
However, Nitish Kumar has not reciprocated the gesture.
The 2nd outreach was to Chandrababu Naidu where the Congress
said that we are willing to grant special status to
Andhra Pradesh, a long standing demand of Chandrabu Naidu for
his home state.
If Indi comes to power, if they form the government,
then a special status is guaranteed.
Again.
Chandra Babu Naidu hasn't reciprocated that gesture either.
In fact, he has acknowledged Narendra Modis congratulations on Platform
X and there is going to be a coordination meeting
of the NDA as well.
Report suggests that Chandra Babu Naidu could well be made
the convener of the ruling alliance.
However, what could happen in the next few days is
that the bargaining power of these parties will now be
greatly heightened.
With that also reflect in the way that the portfolios
are distributed.
Who becomes a minister in the Union Cabinet will be
keeping a close watch.
Alright Padmaja, thanks so much for that.
Meanwhile, my colleague Summit Chaturvedi gave us a gist of
what PM Modis first lines were after clinching the third
term government and what are the next steps for the
government.
Listening to what he had to say after facing a
result day of ups and downs PMO, they delivered his
speech which was clearly nothing less than a weekly speech.
In his speech, he mentioned a lot of things that
are going to continue, especially in the reforms areas of
the reforms in the areas of Akhen and Partab in
defense sector for women, green mobility, semiconductors, also corruption free
India.
He took A to get a position once again saying
that corruption free drive is going to continue.
So all these areas are going to be the major
focus.
There's not no deviation from what he was saying earlier.
Also a goal towards Vixit Bharat.
He also mentioned their performance BJ, PS performance in Orisha
and overall Ndas performance in the country.
So they're not taking it lying down.
And it's quite clear that NDA is going to clearly
once again stake the claim to form the government at
the center.
Cabinet is going to happen when around 12 PM, 12
noon, overall Council of Ministers meeting will happen.
They will resign and then PM will go to president
to state the claim to form the government negotiations.
Well, they will keep on happening.
Allies are there.
Allies are very, very important.
So interesting times ahead as far as India is concerned.
But for economy, clearly the reform bandwagon which was started,
the reforms which were undertaken, which were started are clearly
going to be continued.
All right, thanks so much for that update.
Interesting times indeed.
But now let's also go across and listen in to
what Swaminathan Iyer Eating, our consulting editor, had to say
on the election outcome.
And when does he expect the market to recover from
the heavy losses as well?
The BJP has won, of course, but this is a
rare election where I find the losers are celebrating more
than the winners are.
The BJP's claim that it would exceed 400 seats is
now looking like a bit of a fairy tale.
I think what's clear is that Modis ability to change
India, that has been cramped.
Earlier, there was a notion of Modis invincibility, his moral
authority, his unchallenged way forward to transform India.
Some people said it would become a Hindu authoritarian state,
others had different things, but there was a feeling that
Modi would be able to mold India and change the
Constitution in various ways.
That stands completely stopped at this particular point of time.
From a political point of view that if you look
at this productivity linked insurance, it came up with a
budget of $26 billion, of which only 1 billion has
been disbursed so far, mainly to that telecom sector.
So at this point of time it would be little
difficult to claim that this is a big success, but
it has moved a certain number of steps forward and
I do not expect any major change on the economic
policy one way or the other.
And I imagine with 20,000 crores per month being bumped
in from the SIPSI think the market will recover.
I think the market will go up again when you
see that GDP growth in the last financial year 8.2%,
GBA growth 7.2% which is a better indicator but really
in difficult conditions.
Overall, the Indian economy has done rather well and if
it continues along the same course, I think there is
every reason for the market froth to come back.
I think the markets will come back.
Given the huge change in expectations.
I am unsurprised that the markets have crashed and they
said the Adani shares are may have crashed more than
some others.
But at the end of it all, within a week,
I mean, everybody will say, look, Modi is back in
power.
That is the bottom line.
Maybe he has done much worse.
Maybe you will have less scope to change the Constitution.
His moral authority is reduced.
But can he carry on with the economic program that
his manifesto program laid out, which was mainly continuity?
I see no difficulty in his continuing with that.
All right then.
Well, that was the word coming in from Swaminathan Iyer
as well.
But snehi, what a move we've seen happen right from
a tsunami to a little bit of a wave to
like what somebody, what a lot of people are calling
an undercurrent as well.
But the people really have spoken and they've spoken very
loudly because they've asked for more accountability from the BJP
government and they've delivered their mandate.
So I don't think the democracy has been as alive
as it is right now as ever.
But well, with that, let's also step a little bit
away from the elections and take you through the daily
course of programming of the show.
Let's come back and take a look at what the
global markets are up to.
And Shianzi, let's start with the US handover because muted
move coming in, but in the green nonetheless.
Absolutely, that sums it up.
But then, you know, when you take a look at
Dow Jones futures, then you're looking at similar moves coming
in across futures, actually.
So just about 110th of a percent advance coming in
for the futures.
But then when you look at the moves muted but
winning day on Wall Street, largely because you did have
the Dow climbing about 140 points, You do have the
NASDAQ that added close to about 2/10 of a percent,
similar moves coming in from S&P 500 as well.
So that largely is what you saw as well.
When you look at the markets now, of course, there
was a little bit of a data set coming in
that was in focus.
So you did have the job opening and labor turnover
data that came out on Tuesday morning, also known as
Joules.
And that showed 8.059 million vacancies in April, the lowest
level in more than three years.
So that was an important data set coming in and
it was also well in below the 8.4 million consensus
forecast that was previously being penciled in.
Now the next notable set of data of course comes
in the form of the ADP data on Wednesday morning
in US time.
And readers will also be monitoring data on service.
This is in manufacturing purchasing also due on Wednesday.
And then of course, you have numbers on Thursday and
Fridays, all important me drops data as well.
So that will be in focus in the market.
And on the earnings front, you do have discount retailer
Dollar Tree as well as at leisure company Lululemon that
will be reporting, reporting its numbers as well.
So those would be important to watch out for.
When you look at Europe, then European markets close lower.
So if you're looking at a stock 600 or a
DAX, those are the kind of moves that you saw
when you take a look at Europe as well.
So Snee, that largely is the handover coming in internationally.
All right, Well, that's the handover coming in internationally.
When we talk about Indian bonds, save the 10 year
Treasury yield that also spiked up above 7 yesterday.
But let's also talk about another commodity in focus on
that is oil, because oil prices eased an early trade
yesterday, extending their losses from the previous session when prices
fell to their lowest in four months as investors worried
about supply ticking up later in the year.
Brent crude futures fell $0.20 or almost 3/10 of a
percent at 78.16 dollars a barrel.
Brent closed below $80.00 for the barrel for the first
time since the 7th of February after falling more than
3% on Monday.
So continue to build upon those losses.
That's what the Brent was up to yesterday.
Brent fell for the sixth straight session, lowest in four
months amid concerns that the global supply could increase later
this year.
Now US WTI crude futures also the E 17 17
cents or 2/10 of a percent to $75 a barrel.
It had also settled near a four month low on
Monday after sliding more than 3 1/2 percent.
Now remember the Organization of Petrol Exporting Countries, which is
the OPEC and allies led by Russia together known as
OPEC Plus, on Sunday agreed to extend most of their
oil output cuts into 2025.
But they've also left room for voluntary cuts from eight
members to be gradually unbound from October onwards.
The signs of weakening demand growth have also weighed on
oil prices in recent months, with data on US fuel
consumption in focus now.
The average gasoline price in the United States declined 5.8
cents per gallon to 3 1/2 dollars per per gallon
on Monday.
the US government will release inventory and products supplied data
today as well.
And products supplied was considered a proxy for demand will
show how much gasoline was consumed around the Memorial Day
weekend, the start to the US driving season.
So lots of focus when it comes to both of
these indices.
You have Brent as well as WTI continue to build
on losses that we've been seeing over the last couple
of sessions here.
Well, absolutely.
And it does look like the OPEC Plus has left
the bearish journey out of the bottle.
So that is what we've seen play out.
But on to some more global updates then where I'm
this morning.
Job openings in the United States have fallen more than
expected to the lowest in more than three years.
Thanks for the labor market is softening to aid the
Federal Reserve fight against inflation.
Job openings were down to 96,000 to 8.059 million in
April.
This is remember the lowest since February 2021.
Alright shifting focus then.
Carmaker Toyota will recall over 100,000 SUVs and pickup trucks
in the United States over engine failures.
The recall includes some Toyota Tundra pickup trucks and Lexus
L6 SARS LX 600 SUVs equipped with the Japanese automakers
V35A6 cylinder engine.
Alright then.
In staying with the auto space, Ford has reported an
11% growth in sales for the month of May on
a year on year basis, largely aided by a robust
demand for SUV's, pickup trucks and hybrid vehicles.
And demand for crossover SUV's and pickup trucks has also
helped US automakers post stronger sales over the past few
years as Americans prefer the flexibility offered by those vehicles.
Alright.
With that, we'll slip into a very short break on
this edition of Market Cafe.
When we return.
We keep on going with what other markets around the
world are doing.
We'll take you through what Asia is up to this
morning, how they've opened up.
So you stayed here.
Hi there.
Welcome back.
You're still watching Market Cafe on ET Now.
Thanks so much for staying tuned.
Let's take a look at what the Asian markets are
up to, how they've opened up this morning.
And let's start by looking at what Australia is doing
because first quarter GDP figures are expected out of Australia
today.
And Australia's ASX 200 edged almost 2/10 of a percent
higher on open.
Continues to be there not doing much.
2/10 of a percent higher is where Australia is.
However, on the flip side, Japan's Nikkei dropped 1.1% at
open is right there a 1% loss coming in over
there.
380 point cut coming in.
Follow Nikkei this morning because real wages in Japan have
fallen for a 25th straight straight month in April, potentially
stifling the Bank of Japan's plans to raise interest rates
and realize its virtuous cycle of increasing wages and prices.
Nominal wages were up two point 1% on a year
on year basis.
Now this accelerated from Marches nominal wage growth of 1%,
posting its highest pace of growth in the last 10
months.
Government data showed that real wages fell 7/10 of a
percent, a softer fall from the 2.1% loss in March.
But on the back of that, Nikkei is not doing
well at all.
1% cut is showing up for the Nikkei as of
now.
Shifting focus, let's talk about what South Korea's Cosby is
up to.
That opened half a percent higher, but well, it has
well built on those gains because 1.1% higher is where
Nikkei is as of now.
30 points added to that index as well.
Let's also take a look at what Hang Seng and
Shanghai are up to.
Hang Seng also pretty stellar moves coming in this morning,
1.2% higher.
And Shanghai, well, very nominally in the red, but as
flat as it could be.
Not doing much.
That's Shanghai for you.
But well, let's focus back home.
And we closed at 21884 yesterday, almost 6% lower on
closing.
Nifty registered its biggest single session fall in four years
since March 2020 as well.
And at one point, we were lower by almost 8%,
400 points away from a circuit filter being put into
place.
But luckily that didn't happen.
And implied open at 22,036 today, indicating like a 150
point higher start on the spot basis, but a rather
subdued start on the futures basis.
And with all the uncertainty that we're still seeing around
BJP and its allies, we'll just have to wait and
watch on how the market reacts to whatever this election
outcome has been.
Chancy.
Well, absolutely.
And wait and watch we will because this was the
election where we saw all of the parties celebrate.
You did have BJP and Congress headquarters being lit up
and there was celebration that ensued there.
So let's see how the mood of the market will
also be after the elections then and how this all
pans out for us after that, that part yesterday.
But we do have a jam packed lineup for you
on the market.
We'll be decoding the verdict with ET Now at 8:15.
We'd be in conversation with Rupal Bhansali, CIO Double Duty
Money Management and 8/25/10.
We'd also be talking to some G Prasin, Director, IFL
Securities to help you out with your trades in the
volatile market.
And 8:30.
Then we'd also be talking to Swaminathan, IR Consulting Editor
at ET Now to decode the verdict and the mandate
of the people 920 Then menu Gopal Gare will be
talking to us.
He's the managing director at Bernstein and he'll be talking
to us about the verdict as well.
And at 9:30, Neelkanth Mishra, Chief Economist, Access Bank and
head of Global Research, Access Capital, will be in conversation
with ET.
Now at 9:50, then Atul Suri Marathon Trends, we will
be talking to him as well.
And at 10 O 5:00, we'd also be in conversation
with Sunil Singhania, founder of Backus Asset Manager LLP, as
well as Navneet Munot at 10:20 MD and CEO of
HDFC AMC.
So keep an eye on all of those conversations in
the market.
Welcome back.
Thank you so much for staying tuned in.
Let's shift the focus back to Indian political league then.
And we continue to center focus on the political landscape
of the country.
Sources tell us that the Union Cabinet will be meeting
today to take stock of the Lok Sabha election outcome.
PM Modi said to chair this this meeting starting 1130.
Let's go across with Prakash who's standing by with more
details.
Prakash yes, it's a very crucial meeting in the sense
that the fate of the next government would be decided.
You know, the Prime Minister probably meeting last time under
current tenure with his cabinet colleague today at around 11:30
AM and that will be followed by the Council of
Ministers meeting at around 12:00 PM.
The Cabinet will approve the proposal to dissolve the current
loop Sabha and then the proposal will send to the
president.
After that, Council of Ministers meeting will behave where the
Council of Ministers will submit their resignation to the Prime
Minister and the Prime Minister is expected to make president
today where he will submit his resignation and stake a
claim to form the next government.
Remember, there is an India meeting is scheduled today at
around 5:00 PM today, which is a very crucial meeting
in terms of analyzing the structure of the new government
under India.
And remember, India Alliance is also going to hold a
meeting by evening today where they will.
Decide their future strategy as to whether they'll fit in
the opposition or will try to form the government.
So a lot of publication conditions are taking place.
Political developments are expected to take place today by evening.
Today we are given to understand that the picture is
clear that the NDA, what will be the structure of
the India alliance?
What will be the structure of the India alliance and
who will be in the better position to form the
government.
As of now, India is poised to form government for
the third consecutive time and the Prime Minister Modi is
likely to meet president today to stake a claim to
form the new government.
Back to you.
All right, Prakash, thanks so much for taking us through
that.
There's all the details on that cabinet meeting taking place
at 11:30 AM today.
But with the street showing a thumbs down to PM
Modi's narrow oven, what is the way forward for the
market here on?
Is there more to this correction?
Should investors look at this as a buying opportunity?
Here are views from Ramdev Agarwal, Sandeep Tandon as well
as Balabhansali on this.
I have some patience.
I think let's have some appetite for some more correction.
I would say another 510% correction on the downside and
I hope it is only 10%.
Then I think corporate earnings, I mean dialogue will change,
new government will come and the corporate earnings, the winners
will come.
Maybe some change in policies will happen.
I would think that with this mandate will not we
will not have a great year in terms of the
bulk of the time will go in correction and whatever
excess return we had in last 2-3 years part of
that we have to give in, in next 12 months.
That's, that's that's the I'm preparing my mind for kind
of very low return or no return for in near
future.
I think if we remain constructive for India from a
longer term perspective, I think these are great buying opportunities
and I will generally like this thing whenever a fraud
get built, you give you sharp correction and all week
layers are out.
So again market becomes a healthy.
Now this statement, people will not like it at this
point in time because everybody's portfolio was hurt very badly.
But the point is very important the way when we
look at from the institution perspective, these are great opportunities
to build or reconstruct your portfolio.
Long term trend of Indian economy I do not think
is here to change.
The most important development in the last few years or
last couple of years maybe was the trend in investment
cycles.
As long as that investment cycle does not get dented,
I think the Indian story will continue.
Market loss myths, you know, I mean myth of public
sector company, myth of private sector company, I think that
has to be broken down.
But markets work the way the way it works.
I mean, they love to put PSU as a separate
category altogether and private sector as a separate category and
that's how they pick a stock.
So everything goes up and everything goes down.
But I would think that time has come where public
sector companies should be seen on its merit rather than
just because it is a private public sector company.
I think what could be affecting is more of a
psychological impact in terms of P multiple for a very
near term perspective.
But I think these are these cycles have reversed completely
from a longer term perspective.
So I think we live with that some pain.
If you have gain of last 2 1/2 year, you
have sitting on massive gain which we are.
I'm happy to live with 1/4 pain also because my
longer term thesis and when we talk about that India
or PSU are decadal opportunity, then I will not get
upset just because of 1/4 fear of underperformance.
Alright, and that was the word coming in from market
honchos.
Let's get a little more stock specific then.
And Jeffries has upgraded HUL to buy and revised its
target as well.
What is Jeffrey penciling in for the stock?
Winnie standing by with the details.
Winnie, What are the key takeaways from this report then?
Absolutely.
What we saw yesterday was that the FMCG pact was
managing to hold on to gains in that weak market.
And why is that so?
Because what now?
Everyone believes that the government will have to adopt A
more favorable policy towards the consumption side, the rural side,
which they will be focusing on.
And that's the word that's coming in from Jefferies as
well.
So Jefferies upgraded HOL to a buy with a target
price of ₹2950.
Previous target price was 2000 ₹530 per share.
They've also upgraded the EPS estimate by 1 to 3%.
They said when in doubt, just go and buy staples
is their outlook and they believe HOL is a good
proxy play to participate in the likely uptick that one
could see.
Do not forget that HOL was one of those companies
that has been on under performance in the last five
years.
Even valuations are around that five year average mark as
well.
So you're keeping an eye out on HOL.
Its the leader in the FMCG side, the consumption story
and that is what Jeffries is playing out.
That's why they've upgraded the stock, right?
So well.
Thanks for taking us through that.
HOL will be in focus on the back of a
bullish brokerage note coming in from Jefferies.
But yet another stock that will be in focus today
is Hindalco because Hindalco's only own subsidiary, Novelis has postponed
its initial public offering.
They say that this is due to market conditions and
the company will continue to evaluate the timing of the
offering in the future.
Reports suggested that the listing was supposed to happen in
the first half of this month, but analysts could not
see much upside anyway because you are the likes of
Investech saying that there was little to cheer based on
the indicated price span now at 18 to 21.
Anywhere between that price span per share, the EV to
EBITA was at 7.3 to 8.1 times.
On the flip side, analysts had valued Hidalgo's Novellas arm
at a valuation of 6.5 to seven times FY20 6
EBITDA.
Now Hidalgo impact what?
What this postponement means for Hidalgo?
Hidalgo was supposed to receive anywhere between 9:32 and 1:00
thousand $87,000,000 with a built in green show option.
But there was no clarity on how these proceeds were
going to be used by Hidalgo because Hidalgo is a
net cash company.
So we'll just have to see what the outcome of
this, what happened happens over here and how long is
this postponement push to so well, yes, Novellus IPO postponed
as of now.
All right.
And that was the latest coming in as far as
Novellus IPO is concerned.
But with that, we timed out on this segment.
We'll see on the other side though with some more
news and updates.
Hi there, welcome back.
Let's keep it going with some theme specific ideas.
Let's keep it going with what you know, what market
experts are liking.
And the manufacturing trend is poised to continue.
This according to Ravi Durham.
She's the CIO at Value Quest Investment Advisors.
Listening to what else he had to say and the
sectors that he's bullish on listening.
Markets have been rallying for the last four years since
the bottom in March 2020.
SO1 cannot ignore the fact that valuations are on the
higher ground.
Having said that, probably there is a pocket.
There are pockets like infrastructure, defense, railways, which have done
very well on the back of anticipation of this government
coming back as well.
So those pockets are definitely on the more expensive side.
But there are other pockets like private banks, consumption areas
which are not so expensive as well.
So I won't pass a judgment on the entire market
that markets are expensive.
In fact, the large caps are not so expensive as
well.
OK, let's look at a very simple thought here.
And again we are discussing this with everyone in the
morning.
If you look at Modi 1.0, the focus was largely
towards getting Digital India right, getting the house in order,
fixing lot of loose ends like power and roads.
2020 was puts towards S, which is I'm just breaking
this question for the benefit of our viewers.
If you bought defense stocks in Moody one, you did
not hit a home run.
But if you bought the same set of stocks, let's
say post 2020, you hit a home run.
Do you think the set of stocks which will outperform
and which could potentially outperform in Moody 3.0, could that
be different?
No.
So as you rightly pointed out, the performance of the
stock depends on the entry point and the valuation.
So I do believe that the priority might change for
the government in the coming five years.
The first government's agenda was to put the house in
order.
The second government's job was to kind of kick start
the investment cycle that this particular government's job will be.
To actually put money in the hands of people is
what I strongly believe.
I think with the kind of in tax rate, tax
collections and GST collections we are seeing, I think there
is a strong case to be made for the rates
to come down.
And if that's the case, then I think that should
finally kickstart the consumption cycle, especially at the bottom of
the pyramid which has been languishing since a while.
So how would you be investing differently in the next
five years versus how you've invested different in the last
five years?
If you honestly, if you want to make money from
a five years perspective, go where nobody is looking and
consumption which includes discretionary as well as non discretionary consumption
and sorry, I'm forgetting, but essentially rural consumption, rural consumption
and exports are two areas which I think should continue
to do, should start doing well.
What has been doing well, infrastructure and all.
I think market has kind of factored that in and
valuations are on the other side now.
So next 5 is Asian Pains will make more money
or SBI will make more money, without naming any particular
stock, but I think stocks that have not bought, you
can talk about it, stocks that have not performed well
for five years is the place where one should be
looking at.
You know, Ravi, I recall that when you had come
to our studios about a year ago, I think it
was that you spoke about that manufacturing renaissance and that
really has already played out.
What's the sense that you're getting at a time like
this?
Is this a prudent portfolio allocation strategy to still look
at that entire manufacturing space?
Absolutely.
Manufacturing is going to continue.
It's not a trend that's going to reverse, but in
a longer term trends, there can be periods of no
performance under performance.
And I think this theme has been well recognized in
the market for this point of time.
I think most of the companies are factoring in two
years forward numbers.
So one should be careful in terms of entry point.
But from the perspective of companies doing well over A5
year, 10 year horizon, I have no doubt about it.
Are we talking about how the underperforming sectors are likely
to reverse and one such sector has been pharma for
the last few years.
Is that something which could be a bit of a
dark house as well and which segment within that?
I think you're right, pharma can be a segment that
does well, but pharma does not seem like a top
down sector that is going to do well.
It's more a selective bottom up stories that are likely
to do well.
The revival in the first part is the US generics
where the price erosion is kind of ebbing for the
moment.
So that is a segment that is doing well.
But what we are very keen on is some niche,
some specialty where the competitive intensity is on the lower
side.
So there are certain pockets where the profit pools are
still pocketed, protected and those companies I think can do
well over a longer term period.
Now what do we have?
We have a drop.
We do have a drop, a gap down start and
the gap down start is just not getting filled.
Look, technical factors are at play here.
Before you judge today's market independently, let's look at what
happened yesterday and then we are still hired from Friday's
low.
I Simply put it this way, I can pour cold
water by saying that large part of the gains yesterday
have gone away.
But you have to always put things into context.
Don't look at the market for next two or three
days.
Look at the market for next two or three years.
That's what I, you know, we've been maintaining that this
is a market where you may see a knee jerk
reaction, you may see a compulsive here and there, but
that's not the way of looking at the market.
Maybe one debate which everyone's having is that the positioning
of FIS has been shot and that's one big factor
which could be a moving factor.
Fi short means that they may come back.
Fi short means also means that they're bearish.
If markets like what the verdict is, which is what
it appears right now, looking at the leads, 295 NDA,
201 NDA looks like BJP Sarkar.
Could FIS be forced to exit their short positions?
I think that is likelihood and I wouldn't be so
worried on the large cap valuations.
Honestly large cap valuations are not that expensive.
So positioning not only in the derivatives market but also
in the cash market, I think it's at a 11
year low.
Foreigners equity positioning is I think at around 1617%, which
is on an 11 year low.
So from both the perspective, I think with the event
out of the way, uncertainty being gone, presuming the what
the early leads are showing, the trend stays even with
that the government is coming back.
I think money will get allocated.
Only H over here is the valuation and India is
still part of that emerging Market Basket which is actually
not seeing inflows.
The money has all been flowing towards U.S.
market.
So those are more the reasons why money has not
been coming to India.
But that should change going forward if the policy, I
mean political stability continues.
Do you think that at a time like this, it's
the large caps that present a good tactical positioning versus
the made and the small caps in general?
You're right.
Having said that, the definitions of small and midcaps have
changed.
You know, even a $10 billion market cap company is
now a midcap company.
So these are all largest companies.
But honestly from a larger, if we are to slice
it by market capitalization, probably because FII money has not
come in and that money tends to come into the
large cap space, that is the space that should do
well.
If the FIM money comes back, the domestic I think
juggernaut will continue to roll on.
We are sitting on all the mutual funds are sitting
on enough cash and that money should also get deployed.
So barring the today's reaction, I am not really worried
about the markets trend changing at this point of time.
Alright then that was the word coming in from Ravid
Aramshi as well.
At the bottom of your screen, you do have the
gift Nifty that is still penciling in a positive start
both on a spot and futures basis.
But let's get a move on then and take a
look at what brokerages had to say about elections.
Then in terms of the election verdict, when you look
at CLCS India portfolio, what they've talked about is that
they've removed L&T and they've replaced it with HCL Tech.
So that is what CLC had to say about their
portfolio.
And when you take a look at what they're talking
about, what they're saying about their preferred sectors, they have
private banks, IT, insurance and commodities that make it to
that list.
And when you take a look at the India portfolio
in terms of key commentary coming in, they've talked about
how there's limited exposure that they have two Modi stocks,
the likes of ONGC as well as RIL.
And they're also saying that they fear derating an expensive
discretionary and CapEx space as well.
So that largely is the word coming in from CLSA.
And they're also talking about how ITC remains their preferred,
their preferred staples name as well as how they have
doubts over the stable government and policy making styles as
well as of now.
And in terms of Nifty, they're talking about how Nifty
remains 19X above the 18 year historical average PE as
well.
So that largely is the verdict coming in from CLSA.
When you take a look at what Goldman Sachs had
to say then in terms of what next after elections,
they're talking about how the government will be sticking to
fiscal consolidation path and they're also expecting spending reallocation towards
welfare.
And they are also saying that there may not be
a requirement to reduct reduce CapEx budgets as well.
So that largely is the verdict coming in from Goldman
Sachs as well.
But Sneehi, which are the ones that you're looking at?
Absolutely.
Let's keep up going with all these notes coming in
because you have a whole host of group Rogers that
have come out with what next after the elections.
And on the same note, then you have Rhythm Desai
of Morgan Stanley.
And he believes that the medium to long term views
on the market, they do not change as of now.
They he also says that they realized an implied volatility
will ebb going ahead and unresolved disagreements within the NDA
were not priced in by the markets.
And it's unlikely that the pace of reforms will slow
down, however, But the government is also unlikely to sacrifice
macro stability.
So that's largely what Rhythm Desai of Morgan Stanley has
to say.
And let's also keep on going with what IIFL have
to say.
And this is GV Gitty from IIFL.
These are his views.
He says that populism can cause compression of multiples.
And unreasonably priced Psus and cap goods look vulnerable.
As of now, he believes that it's best to avoid
the defense sector.
So what's next for IIFL?
What are they liking in terms of what they are
liking, they remain positive on financials, utilities as well as
construction proxies.
They believe that the underlying fundamentals of the market are
intact.
Pardon me, this is a note from access cap, but
let's also move it back to IIFL and what GV
Giri is saying that avoid defense and Sun Pharma.
Apollo Hospitals have been added in the large caps and
he has also removed SPI Life as well as BPCL
from the portfolio.
So that's largely what I AFL also has to say
on what next after the elections.
Well, absolutely.
So that's the word coming in from brokerages then.
But Nifty did have the biggest single session fall in
four years coming in yesterday and I'm just standing by
with the futures and options round up then.
Yes, that's right.
Actually all the gains made because of exit poll on
Monday got washed away in a single session yesterday.
But let's start with FIA.
So in index future F I I have actually covered
their longs by 67,000 contract.
They have added short by 91,000 contracts.
So net to net we are seeing reduction of around
1.6 lakh contract because of which the total long has
shifted lower from 28% directly to 12%.
And here we are seeing that the total net short
is up by 80% in one session itself showing their
barest stance in the market.
Also the net to net short is at all time
high level as well.
If you talk about retail then they have taken a
bullish stance in the market.
In index future they have added around 98,000 long, they
have covered around 46,000 short.
Net to net they are by around 1.4 lakh contract
and the total net long is up by 77% in
one session itself.
Now let's talk about a Nifty.
So if you can see in the chart, Nifty has
yes registered its biggest single session declined in four years
and it has slipped below its key DMA level of
A50 and 100 DMA as well.
But currently Nifty is just below its key critical support
of 22,000 level.
If we want to get on a bullish side, Nifty
has to breach above that 22,000 mark.
Well, if we talk about index future here, we are
seeing that open interest is about around 1% indicating short
build up which is a bearish sign.
Also an option friend, we are seeing call writing happening
at that psychological mark of 22,000 mark which is essential
for Nifty to breach in order to get on a
positive side.
Let's talk about Nifty Bank.
So if you can see in the chart as well,
the Nifty Bank has also register its biggest fall in
absolute points ever and it has also slipped below its
50 and 100 DMA and it has broken its channel
support which is around that 47,800.
So when Nifty Bank needs to go above that level
to be on a positive front.
If you talk about index future, here we are saying
that open interest has jumped by 8% and indicating very
strong short build up in the market.
Whereas if you talk about option fund today we have
weekly option expiry for Nifty banks.
So we may see some heavy volatility in banking stock
and you are seeing that call writing has happening at
around 47,500 indicating very strong resistance around this level.
Leslie, let's have a quick view on few FNL stocks
that are in focus.
And we are seeing that good long buildup happening in
Marico, HUL and Goldridge Consumer were short buildup in SBIPNBLTABB
India and Bharat Forge.
So keep an eye on the stocks.
All right, Ranjh, thanks so much for taking us through
the key levels to watch out for after the volatility
we've seen yesterday.
And the key stocks to watch out for, like Anj
mentioned today, the weekly expiry for Nifty Banks.
So we'll be watching out for that indice closely as
well.
But with that, viewers were completely timed out on this
edition of Market Cafe from Shianzi.
Me and the entire team that put this show together.
Thanks so much for watching.
But while we bid you goodbye, you stay tuned to
the channel.
Lots of top market voices lined up for you on
the market.