Record Day At The Stock Markets, 70,000 And 21,000 Breached For Close
The United States central bank the Federal Reserve's indication that it would now unleash at least three interest rate cuts in 2024 sending stock markets rallying across the world, with India joining the party, as it were
Our Top Reports For Today
- (00:00) Stories Of The Day
- (01:10) Record day at the stockmarkets again, 70,000 and 21,000 breached for close.
- (02:52) Best Fed day across assets in 15 years as global markets salute reversal in rate.
- (08:41) Demand for oil in India could fall.
- (10:20) Home sales across India set to be 38% over last year.
- (11:49) World copper supply drying up after projections of surplus, will India be affected.
- (18:47) Thieves love for Range Rovers in the UK leads to insurance premiums spiking.
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.
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Markets
As we expected and perhaps hoped, the United States central bank the Federal Reserve’s indication that it would now unleash at least three interest rate cuts in 2024 sending stock markets rallying across the world, with India joining the party, as it were.
The expectation now is that the Fed will lower rates by 75 basis points next year — a sharper pace of cuts than indicated in September.
Next year, as you know, is not too far.
So, the benchmark BSE Sensex and the Nifty50 closed at 70,514, up 930 points while the Nifty50 settled 256 points higher at 21,183.
The 50-member Nifty index has now hit a record high in eight of the 10 sessions so far this month.
A slew of good news flowed in before that, including another upgrade in India’s GDP, this time by the Asian Development Bank and the general easing of oil prices which obviously is good news for the Indian economy. More on that shortly.
Other markets did very well too thanks to the Federal Reserve hints, with the MSCI's index of Asia-Pacific shares outside Japan shooting up 1.8%, its biggest one-day percentage jump in a month.
European indices also were strong with France and Germany hitting all time highs.
The rupee finally recovered, if only slightly after the US dollar weakened. Conversely a strong dollar has been pushing down currencies across the region, though not so much in the last month or so.
The Indian rupee closed stronger on Thursday. The rupee ended at 83.33 against the US dollar up compared to its close of 83.40 in the previous session.
It was the best Fed day across assets in almost 15 years, according to data compiled by Bloomberg.
“This is a massive paradigm shift on Wall Street, with the most aggressive rate-hiking cycle in decades coming to an end,” Adam Sarhan, founder of 50 Park Investments, told Bloomberg, adding that the Fed was no longer dealing with inflation as public enemy No. 1.”
The S&P 500 moved closer to it's all-time high, topping 4,700.
The Dow Jones Industrial Average hit a record and the Nasdaq 100 has now risen 50% this year.
I reached out to Gaurang Shah, SVP of Geojit Securities and asked him what he was seeing as triggers between domestic and international factors driving the markets in the near term.
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Oil Demand Slumps: IEA
Our energy segment brought to you by India Energy Week
Oil demand growth in India is set to slow next year as the spurt in consumption that followed the pandemic fades.
Consumption will expand 150,000 barrels a day in 2024, down from about 290,000 barrels a day seen from 2021 to 2023, according to Rystad Energy Head of Oil Trading Mukesh Sahdev, quoted by the Economic Times.
The drop will return growth near the pace seen from 2011 to 2019, he said. The International Energy Agency, meanwhile, sees growth halving to 100,000 barrels a day, according to its November report.
India is not alone.
Meanwhile, India's Russian oil imports in November rose to a 4-month high of 1.6 million barrels per day (bpd), up 3.1% from October, making up about 36% of the nation's overall imports last month, Reuters reported.
In case you had not noticed, Russia has become India's top oil supplier this year.
Global oil demand growth is slowing down sharply as economic activity weakens in key countries, the International Energy Agency said as it slashed estimates for this quarter.
Meanwhile, soaring production from the US, Brazil and Guyana is offsetting production cuts by Saudi Arabia and its OPEC+ allies, it said.
Crude prices slumped to a five-month low below $73 a barrel in London earlier this week on signs of growing oversupply. Futures have tumbled around 23% since late September as China’s economic outlook darkens while output swells from a number of exporters.
The energy segment was brought to you by IndiaEnergyWeek set to start on February 6 next year. More details on www.indiaenergyweek.com
Sales of Real Estate Spike
Sales of real estate for 2024 are set to clock in at 38% over the previous year as home values increase as do buyers’ appetite.
Sales in the first nine months of the current year have already crossed last year’s figure as Indians continue to pump money into buying homes, including of course more highly priced ones.
Mumbai, NCR or National Capital Region and Bangalore lead the tally.
Figures put out by real estate consulting firm Anarock say that homes worth INR 3.49 Lakh Cr. have already been sold across the top 7 cities in the first 9 months of 2023 – 7% higher than the entire 2022 sales value (approx. INR 3.27 lakh Cr.)
At current sales momentum, the current 4th quarter to see min. INR 1 lakh Cr. worth housing inventory sold in top cities - taking total sales value above INR 4.5 lakh Cr.
So that is the figure, Rs 450,000 crore of real estate in 7 cities in 2023.
In terms of number of units, between January and September 2023, approx. 3.49 lakh units were sold in the top 7 cities, against approx. 3.65 lakh units in entire 2022.
What’s Happening In Copper
The world at large was expecting a surplus of copper but this has suddenly vanished.
Electric vehicles and renewable energy infrastructure in general are big users of copper.
In October, Reuters reported the International Copper Study Group (ICSG) saying the copper market will transition from supply-demand balance in 2023 to a major supply surplus next year. This was after its meeting in Lisbon at that point.
Production is forecast to exceed usage by 467,000 metric tons in 2024, a significant upward revision from the expected 297,000-metric ton surplus at the time of the Group's last meeting in April.
In the past two weeks, one of the world’s biggest copper mines was ordered to close in the face of fierce public protests, while a slew of operational setbacks has forced one of the leading miners to slash its production forecasts, Bloomberg reported.
The sudden removal of around 600,000 tons of expected supply would move the market from a large expected surplus into balance, or even a deficit, analysts say.
I reached out to Mayur Karmarkar, CEO of The International Copper Alliance and began by asking him how the supply dynamics were playing out and whether India could be affected.
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Range Rovers Get Stolen
A string of Range Rover thefts in the UK has caused insurance premiums to skyrocket.
Thanks to which the SUV’s resale value has tumbled, Bloomberg is reporting.
JLR as you know, is owned by the Tata Group.
While other luxury SUVs also are also apparently popular targets for criminals, six of the 10 most-stolen car models in the UK in the year to March 2023 were Range Rovers, according to the Driver and Vehicle Licensing Agency.
The Range Rover Velar was the model most targeted.
And a few words on the modus operandi.
Thieves have apparently used relay attacks, where hand-held radio devices extend the signal from a key inside the house to open the car.
Newer keyless technology can prevent this, while drivers are increasingly purchasing special cases for the fobs that prevent the signal from being transmitted.
JLR has been rolling out ultra-wide-band technology to protect its cars against this.
In an effort to reassure existing owners and potential buyers, JLR said last month that it had spent £10 million since September 2022 on security updates for 65,000 Range Rover and Range Rover Sport vehicles made between 2018 and 2022. This included updating software preventing thieves from driving away without the keys to the car.
As a result, JLR said, thefts of vehicles made during these years had fallen 40%.
The JLR story is also interesting for its latitude of coverage.
Apparently, JLR is also working more closely with police officers to help them identify the tools and tech used to steal cars, which could then be used as evidence.
The company sends members of a 40-strong team to examine stolen cars when they are found, to establish the tactics used by criminals.
Nonetheless, the thefts continue.
