(Bloomberg) — Before the trading day starts we bring you a digest of the key news and events that are likely to move markets. Today we look at:
Good morning, this is Ashutosh Joshi, an equities reporter in Mumbai. Indian equities look set for a firm open this morning, with Nifty futures and most Asian markets in the green. But the real action will be in the quarterly earnings, with big names like Infosys, Tata Consumer, and Dr Reddy’s reporting their numbers. So far,the earnings season has been a bit underwhelming, which is keeping equity bulls cautious.
Earnings season echo weak market momentum
Investor hopes for an earnings revival — one that could justify lofty stock equity valuations — are starting to look shaky. So far, only half of the 12 Nifty companies with first-quarter profit estimates have managed to beat analyst forecasts, according to data compiled by Bloomberg. That’s much lower from the prior quarter, when more 58% had surpassed expectations at the same point in results season.
Jane Street factor fires up capital market stocks
Yet, amid the weak earnings, not all corners of the market are struggling. Capital market stocks remain buoyant, as traders track the the return of global trading giant Jane Street to Indian bourses. Angel One, for instance, witnessed its highest bullish options activity in over a month, while shares of BSE and Nuvama Wealth rose Tuesday on hopes of increased trading volumes. The upcoming weekly derivatives expiry on Thursday will offer a clearer read on whether Jane Street’s re-entry is really adding depth to the market.
Top jeweler’s overseas pivot may add luster
Meanwhile, in the consumer space, Titan is looking overseas to counter a softer outlook at home. The Tata Group company is set to buy a majority stake in Middle Eastern jeweler Damas, giving it access to 146 premium locations in the UAE. Analysts at JM Financial expect the move to enhance Titan’s standing in Gulf countries at a time when discretionary spending and consumer confidence in India is flagging. Even so, investors appear to be staying the course: Titan has outpaced the Nifty consumption index by three percentage points this year.
Three great reads from Bloomberg today:
Foreign appetite for local shares is showing signs of fatigue. After pumping in over $5 billion between March and June, global funds have turned cautious, pulling out $650 million so far this month through July 18. If the trend holds, July could mark the first month of net outflows since February. With earnings lacking excitement and stock valuations still looking rich, prospects for speedy rebound in the Nifty are fading, with the index more than 5% below its peak.
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–With assistance from Savio Shetty and Chiranjivi Chakraborty.
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