Holiday Trading Takes Markets To New Highs
This was not a regular weekend for the stock markets in India with special trading sessions on Saturday on the National Stock Exchange and the Bombay Stock Exchange to test disaster preparedness and business continuity.
Our Top Reports For Today
- (00:00) Stories Of The Day
- (00:50) Holiday trading takes markets to new highs, sustaining might be tough
- (02:54) India’s wealthier are growing faster than elsewhere in world
- (09:46) Latest GDP numbers have caused some head scratching. What should one really focus on?
- (18:44) A $1 billion gift that ought to inspire many
NOTE: This transcript contains only the host's monologue and does not include any interviews or discussions that might be within the podcast. Please refer to the episode audio if you wish to quote the people interviewed. Email [email protected] for any queries.
---
Holiday Trading Takes Markets Up
This was not a regular weekend for the stock markets in India with special trading sessions on Saturday on the National Stock Exchange and the Bombay Stock Exchange to test disaster preparedness and business continuity. This is a normal feature.
Not so normal of course was the fact that the markets rose again to new highs…or is that normal too ?
The S&P BSE Sensex hit a fresh all-time high at 73,995, and eventually settled with 61 points up at 73,806. The NSE Nifty 50 hit a new high at 22,420, and finished 40 points higher at 22,378.
Tata Steel rallied 3.5 per cent to Rs 155 and was the top gainer among the Sensex 30 stocks.
The high GDP numbers were priced into the market’s rise on Friday and then on special trading day of Saturday.
There are thus not many triggers for Monday which could make it more supply-led.
The only shift if so is that foreign portfolio investors are net buyers now in February, having bought around Rs 1,539 crore worth of shares.
As is well known now, foreign investor selling is not having much of an impact on the market itself because of the strong counter force of domestic buying and retail money.
FIIs sold in January and February — they offloaded shares worth around Rs 24,204.67 crore.
On Wall Street, markets were strong, also in some ways keeping the global sentiment for stocks high.
On Friday, The Nasdaq Composite rose to an all-time high Friday, surpassing its 2021 record, as investors poured into mega cap technology stocks. The tech-heavy Nasdaq advanced 1.14% to 16,274.94. The S&P 500
added 0.80% to 5,137.08 for its first close above the 5,100 threshold.
Chip Making giant Nvidia, already up 260% over the last 12 months, was up another 4% Friday.
India’s Ultra Wealthy Population Growing Faster Than Rest Of World
Knight Frank’s flagship The Wealth Report 2024 has said that the number of ultra-high-net-worth individuals (UHNWIs) in India is expected to expand to 19,908 by 2028 from 13,263 in 2023.
UHNWIs are worth $30 million or more, being the accepted benchmark.
This accounts for India to witness 50.1% growth in UHNWIs, in the next five years. In contrast, the number of wealthy individuals globally is expected to increase by 28.1% over the next five years to 8,02,891 by 2028.
In the year 2023, the number of UHNWIs globally rose by 4.2% in 2023 to 6,26,619 from 6,01,300 a year earlier.
The year on year (YoY) change in UHNWIs in India was recorded at 6.1% with the country now boasting of 13,263 ultra wealthy in 2023 as against 12,495 individuals in 2022.
Moreover, India’s UNHWIs are pretty bullish about their prospects and fortunes.
The Knight Frank’s Report says 90% of Indian UHNWIs are expecting to witness an increase in their wealth during the year 2024.
Almost 63% are expecting to witness a significant increase of more than 10% in their wealth value. Meanwhile Mumbai has ranked 8th in terms of global growth in terms of annual luxury residential price rise, putting it squarely in the Top 10 in the world.
And finally, almost a third or 32% of India’s ultra-high-net-worth individuals’ (UHNWIs, Individuals with a net worth of US$ 30 mn and above) wealth is allocated towards residential real estate asset class.
Also, some 14% of their residential portfolio is allocated outside India.
About 12% of India’s UHNWIs plan to buy a new home in 2024.
To get a sense of what the rise in numbers of UNWHI means, from a broader economic standpoint as well, I caught up with Gulam Zia, Executive Director at Knight Frank and began by asking him to explain the relevance of these numbers.
---
What India’s Latest India GDP Numbers Mean
The latest GDP data says that India will end the year with a GDP growth of 7.6 percent—up from 7.3 percent.
The numbers were a surprise since the most optimistic of economists did not get it right as we discussed on Friday as well.
Like in all such good stories, a backgrounder is emerging.
New Indian Express columnist and well known economic journalist Shankkar Aiyar points out, as did QuantEco economist Vivek Kumar on Friday, that the upgrade in growth follows a flurry of revisions for previous years and quarters—growth for 2022-23 was scaled down and revised upwards for the current year’s first three quarters—including the revelation that economy grew at 8.4 percent between October and December 2023.
He also alludes to the much lather generated on the 8.4 percent GDP growth, while the gross value added or GVA for the period was 6.5 percent.
The explanation for the lower GVA is explained by a lower spend on subsidies. (The CSO defines GDP= GVA + taxes – subsidies.) Interestingly, the GVA has slid sequentially for three quarters from 8.2 percent to 6.5 percent and probably deserves a more elaborate explanation.
Be that as it may, I reached out to Shankkar Aiyar to get a sense of these numbers but more from a point of view of what we should look for in the granular details in case the numbers, as it happened this time, tend to shock us.
---
A $1 Billion Gift That Will Inspire Many
A heartwarming story of philanthropy at a time which will hopefully inspire others across the board.
The 93-year-old widow of a Wall Street financier has donated $1 billion to a Bronx medical school, the Albert Einstein College of Medicine in New York, with instructions that the gift be used to cover tuition for all students going forward, the NYT has reported.
The donor, Ruth Gottesman, is a former professor at Einstein, where she studied learning disabilities, developed a screening test and ran literacy programs.
This donation is one of the largest charitable donations to an educational institution in the United States and most likely the largest to a medical school.
The fortune came from her late husband, David Gottesman, known as Sandy, who was a protégé of Warren Buffett and had made an early investment in Berkshire Hathaway, the conglomerate Mr. Buffett built.
The donation is notable not only for its staggering size, but also because it is going to a medical institution in the Bronx, the city’s poorest borough, the NYT says.
The Bronx has a high rate of premature deaths and ranks as the unhealthiest county in New York. Over the past generation, a number of billionaires have given hundreds of millions of dollars to better-known medical schools and hospitals in Manhattan, the city’s wealthiest borough.
Dr. Gottesman said her donation would enable new doctors to begin their careers without medical school debt, which often exceeds $200,000. She also hoped it would broaden the student body to include people who could not otherwise afford to go to medical school.
