MarketBuzz
1211: Marketbuzz Podcast With Hormaz Fatakia: Why Smallcaps, ITC, SBI will be in focus
Good morning and welcome to CNBC TV18's Market Bus Podcast. I am Harmas Patakia. There are pockets of froth in the small and mid-cap space in the equity markets that has the potential to become a bubble and burst affecting investors. No, no. I am nobody to make this call. But this statement was made by SEBI chairperson Madhappi Puri Booch yesterday and the impact was felt instantly as the small-cap index ended 2% lower. And that will be the index to watch out for today as well. In four out of the last five trading sessions, the small-cap index has declined by over 1% in three of them. It ended 2% lower yesterday. It ended another 2% lower last Wednesday as well. So things are not looking good within the small-caps. Although the mid-caps have been largely resilient. And that, some bit of that rubbed off on the benchmark indices as well on Monday. It is a helpless scenario, right, when your heavyweight constituents don't participate or lend support. And that was the case with the nifty HDFC banks, downgraded by CLSA took the stock and subsequently the nifty and nifty bank lower. Today is also the weekly expiry of the financial services index. Another stock that may keep the nifty bank under pressure is State Bank of India. And that is after the Supreme Court denied its request for extension up to the 30th of June in the electoral bonds case. Now, India's largest lender has been asked to furnish all the details to date itself which will be put up on the election commission's website no later than 5pm on the 15th of March. The stock had declined 2% yesterday as well. Speaking of heavyweights, another such stock that will be in focus is ITC. And sources are telling CNBC TV18 that BAT, which is British American Tobacco's Block, to sell some stake in the company can be launched as early as this evening after market hours. Remember, my colleague Mangala Malu was the first one to report about this on the 8th of February that BAT, which is ITC's largest shareholder, is likely to monetize some of its 29% stake. The stock was also part of our popular segment D-Street Chatter yesterday where my colleague Namesha spoke about the block being launched soon. And since we are on the topic of block deals, a big one took place in indigo yesterday and as we told you, Rakesh Gangua, the promoter, was indeed the seller in that transaction that was well over 6700 crore rupees and Morgan Stanley was the buyer in that transaction. Moving on to more specific stocks and Aditya Bela Capital last evening announced that it will merge its wholly owned subsidiary Aditya Bela Finance with itself to create a unified operating NBFC. Rationalization and simplification of the group structure improved financial stability, likely stakeholder value enhancement and increased operational efficiency are highlighted as the rationale behind this move. Most brokerages have shared positive views on this announcement and other NBFCs which have been in for action due to regulatory issues like GM Financial, IFL Finance which also saw heavy losses on Monday as well will also remain in focus. Now another segment that has been battered in the past but saw some relief rally yesterday are hospital stocks like Narayana, Apollo, Shelby as sources have told CNBC TV18 that the health ministry is yet to begin consultations on the Supreme Court order to fix treatment costs. Remember the six week deadline of the Supreme Court to fix treatment costs ends on the 11th of April. Also watch out for tire stocks where government has extended the counterwailing duty on pneumatic radial tires used in buses, trucks and lorries until the 23rd of July 2024 so we will keep an eye out on all of these stocks. In cues from the global markets, the US markets ended slightly lower overnight ahead of the inflation data to be reported later this evening. Speaking of which, India will also be reporting its CPI and IIP data later this evening. Asian markets have opened mixed but the Nikai continues to see profit booking after the rally that it has seen recently. JP Morgan Chase CEO Jamie Diamond said that while the US economy is booming, the odds for a recession are not off the table just yet. It is also booming his bitcoin and that is showing no signs of slowing down whatsoever. It crossed the $72,000 mark overnight as more investors continue to plow into the ETF flows as well. And what is also gaining strength is gold and the yellow metal is also testing newer highs and it is also crossing the mark of $2,200 per ounce. So, keep an eye out on the cryptocurrency as well as gold but the gift nifty as we speak is pointing towards a flat start for our Indian markets. And lastly, in some news beyond the markets, the Modi government last evening notified the Citizenship Amendment Act four years after it was passed in parliament. You can read more on our coverage of the same on CNBCTV18.com. That's all for today. We hope you have a wonderful trading day and for the sharpest market insights. Stay tuned to cnbctv18 and cnbctv18.com. [Music]