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The BSE Sensex and Nifty 50 closed at record highs, but ended off session highs. The GIF Nifty is indicating a flat start for the Indian market. The market capitalization of BSE listed companies rose to over 430 lakh crore rupees. Realty and IT sectors gained, while media and FMCG sectors declined. The Nifty Bank Index failed to close above 50,000 mark. Foreign and domestic institutions were net sellers in the cash market. The Nifty is witnessing a time-wise correction. In the global market, Asian markets are trading mixed, while Wall Street extended its record-setting streak. In economic data, wholesale inflation ticked down and weekly jobless data came in above forecast. US Treasury yields slipped. Crude oil futures are firm above $82 and gold has reversed its losses. Stocks to watch include Ambuja Cements, Suzlon Energy, Vodafone Idea, L&T Finance, Puravankara, and Wipro. Jonathan Garner of Morgan Stanley Good morning, you are listening to market minutes and I am Nandita Khelka. Today is Friday, the 14th of June and here are the top things to know before the market opens. The BSE Sensex and Nifty 50 saw a record closing high on weekly expiry day, but the benchmarks ended off session highs. This morning, the GIF Nifty is indicating a flattish start for the Indian market. So, we could expect the indices to remain range bound. On Thursday, the Nifty hit an all-time high of 23,481 and the Sensex rose to a record level of 77,145. The index is up 0.5% in a week and it has scaled new peaks in three out of the four sessions so far. The market capitalization of BSE listed companies rose to over 430 lakh crore rupees with an addition of 2.5 lakh crores on Thursday alone. Meanwhile, the broader market outperformance continues with both the BSE mid and small cap indices rising nearly a percent each. Among sectoral indices, Realty and IT were the major gainers as they rose 2% and 1% respectively. Media and FMCG were the worst hit, declining 1% and 0.5% respectively. The Nifty Bank Index deserves mention as it failed to close above that 50,000 mark yet again. The index fell over 350 points from Thursday's intraday high of 50,186 to close in the red. Experts say a decisive close above 50,200 is needed for the momentum to return on the Nifty Bank Index. Among the top gainers on the Nifty on Thursday were the likes of Sriram Finance, HGSE Life, Divis Lab and M&M, while HUL, Britannia, Axis Bank and Ayesha Motors were among the worst hit as they fell 1-2%. Both foreign and domestic institutions were net sellers in the cash market on Thursday. Experts believe that the Nifty is witnessing a time-wise correction and the current trend is likely to continue. Hence, they advise keeping a stock-specific approach. Analysts feel 23,200-23,500 will be the immediate range on the Nifty, which may extend to 23,600 in the near term. Let's turn our attention to the global setup this Friday morning. With Bank of Japan interest rate decision in focus, the Asian markets are trading in the mixed territory. Overnight, Wall Street extended its record-setting streak with the S&P 500 and Nasdaq notching new closing highs. Software giant Adobe leapt 15% after second-quarter results surpassed Wall Street expectations. Adobe also raised its full-year guidance. In economic data, wholesale inflation unexpectedly ticked down by 0.2% last month, vis-à-vis expectations of 0.1% increase. This follows a consumer price index reading that was flat on a monthly basis in May. Meanwhile, weekly jobless data came in at 2,42,000, well above the 2,25,000 forecast from economists. This offers another positive indicator for those hoping that the Federal Reserve has seen enough evidence that elevated interest rates have tightened the economy. US Treasury yields slipped once again after the latest inflation data showed an unexpected drop. The 10-year yield slipped by 5 basis points to 4.2%, hitting its lowest level since 1st April. Meanwhile, in the commodities market, crude oil futures are firm above the $82 mark, while gold has reversed its losses. Shifting focus to all the stocks to watch out for in today's trade, Ambuja Cements, a subsidiary of the Adani Group, has announced the acquisition of Penna Cement for an enterprise value of a little over Rs 10,400 crore. The acquisition, formalized through a binding agreement, will augment the Adani Group's capacity by 14 million tonnes per annum, bringing the total to 89 million tonnes per annum. Under the agreement, Ambuja will buy 100% of Penna Cement shares from its existing promoter group P. Pratap Reddy & Family. The acquisition will be fully funded through internal accruals. Suzon Energy has appointed Khetan & Company, an eminent law firm in India, to conduct a review of its corporate governance practices. The move comes days after one of Suzon's independent directors had quit citing corporate governance issues. Besides Khetan & Company, Suzon also said that certain additional advisors may be appointed as required from time to time. Meanwhile, Vodafone Ideas Board of Directors has approved a fundraising plan where the company will raise up to Rs 2,458 crore by issuing over 166 crore shares in one or more branches on a preferential basis. The shares will be issued to Ericsson India and Nokia Solutions & Networks India. Also in focus will be L&T Finance as Morgan Stanley Asia buys a majority of the stake in the block deal which was offloaded by Bain Capital's affiliates along with BNP Paribas Financial Markets. The 3.5% equity exchanged hands at an average price of a little over Rs 170 per share. Morgan Stanley picked up shares worth Rs 576 crore while Axis Capital and Velligare bought shares worth Rs 67 crore each. Parent company L&T also acquired half a percent stake. Moving on to Purvankara, the board has approved the fundraising of Rs 1,000 crore through a QIP. The in-principle approval by the board is valid for one year, according to SEBI regulations. The real estate company will raise funds by issuing equity shares, debentures or preference shares. The company is yet to finalize and approve the terms of the issue. Meanwhile, Wipro has collaborated with Siemens to transform automotive software development through the integration of the paid 360. On that note, let's move on to our voice of the day segment. Today we have Jonathan Garner of Morgan Stanley who shares his insights on how India stacks up versus its emerging market peers, especially China. Let's listen in. So you can get these short covering, low quality bounces in a market that's becoming inherently more volatile, i.e. the China market, but the structural secular bulge market is right here in India. If you look at Indian earnings growth versus overall emerging markets, it's 60 percentage points higher in the last three years. It's quite simply compounding earnings much faster than anywhere else, whereas China's not compounding earnings at all. And so the China valuations essentially represent a van trap. It's not a great idea in equities to buy just simply on the low one-year forward PE or price to book, if you're not thinking about the earning streams in the future that you're buying and the ROE that you're buying. And if you look at India's ROE, it's one of the highest in global markets. In fact, only really the United States has higher return on equity than India does, whereas China's return on equity has approximately halved in the last decade. Well, that's all we have for you on Market Minutes today. Stay tuned to MoneyControl.com for more news and updates. Thank you and have a great trading day.
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