Powell’s Fed Rate Cues, Reliance AGM To Bolster Indian Stocks

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(Bloomberg) — Before the trading day begins, we present you with a summary of the major news and events likely to move markets. Today we take a look at:

• Reliance AGM is approaching
• India’s IPOs Outpace US
• Perla’s Journey into the World of Paints

Good morning, I’m Chiranjeevi Chakraborty, equity markets correspondent in Mumbai. Indian stocks are set to follow Asian markets higher as the prospect of a rate cut by the Federal Reserve boosts sentiment. The upbeat backdrop should keep Indian investors in good spirits as we enter the last week of August. The week is set to be eventful, with Reliance Industries’ AGM, June quarter GDP data and monthly derivatives expiry all on the agenda.

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All eyes on Reliance AGM; Jio listing, retail in spotlight

The week is all about Reliance Industries, as the country’s most valuable company prepares for its much-anticipated annual shareholders’ meeting on Thursday. While the meeting is happening later than usual — in part because of the Ambani family’s lavish wedding — the outlook is largely the same as last year. You can see that in Reliance’s share price, which has been roughly flat over the past month. Sanford C. Bernstein expects the AGM to reveal a possible listing date for Mukesh Ambani’s consumer businesses, Jio and Reliance Retail, along with a timeline for the company’s new energy projects.

India’s IPO market returns outpace US, Europe

Returns from initial public offerings in India are outpacing those in the United States, as investors flock to the country’s booming tech startups. This year, 195 companies have gone public, including high-profile offerings like electric scooter maker Ola Electric, and have returned an average of 58%. That’s well ahead of the 12% average for U.S. IPOs and the 18% average for European offerings, data compiled by Bloomberg show. At least 20 other companies, including Hyundai Motor’s India unit, are poised to tap the market’s abundant liquidity. It’s no wonder the Bombay Stock Exchange’s index of newly listed companies has surged 33% this year, outpacing the 14% gain in the benchmark Sensex.

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Perla’s entry into the paints is unlikely to upset the big players.

Initially, Birla Group’s bold foray into paints put some pressure on existing players, but market watchers see room for new entrants. Nuvama Institutional Equities doesn’t expect Grasim Industries’ entry to disrupt the market, prompting it to take an “anti-consensus” buy stance on the three major players in the industry. With a potential recovery in pricing power and signs of growing rural demand, the sector looks set for a boost. Leading player Asian Paints is up 8% this quarter, after falling 14% in the first half.

Analyst actions:

• Bansal Wire Stock Rated New Buy on Investec; PT Rs 440
• Devyani share price cut to Rs 185 on KR Choksey
• ITC interest rate cut for accumulation in KR Choksey; PT 545 Rs
• Polycab India Downgrades Systematix Stocks & Securities to Hold

Three great reads from Bloomberg today:

• Cheap AI Voice Robots Are Going Global in India
• Powell’s shift leaves traders wondering about size, path of rate cuts
• Chickenpox Outbreak: How a Preventable Virus Became a Global Threat

Finally..

The rally in government bond prices looks set to continue as foreigners continue to buy bonds amid the prospect of lower interest rates. The yield on the benchmark 10-year note could fall to around 6.50% by March 2025, according to PGIM Mutual Fund, a 36 basis points drop from Friday’s close. The securities, which recently joined a major JPMorgan Chase & Co. index, are among Asia’s best performers this year.

—With assistance from Malavika Kaur Makol.

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