The Stock Markets Resume Their Run, Hit All Time Highs
Both the Sensex and Nifty hit all time highs on Thursday and then settled lower. The BSE Sensex hit a record high of 67,771 during the day and then closed at 67,519, up 52 points and the Nifty50 hit a new high of 20,168, before closing at 20,103.
Our Top Reports For Today
- [00:50] The stock markets resume their run, hit all time highs.
- [10:04] Oil trades near a 10 month high of $90 as traders predict tightness.
- [11:33] Birla Group joins the Rs 70,000 crore decorative paint business
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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Stock Markets On The Run Again
The stock markets resumed their run, the fears of the last few days forgotten, at least for now.
Both the Sensex and Nifty hit all time highs on Thursday and then settled lower. The BSE Sensex hit a record high of 67,771 during the day and then closed at 67,519, up 52 points.
The Nifty50, too, hit a new high of 20,168, before ending the day at 20,103, up 33 points.
The Nifty 50 hitting and then staying over 20,000 is a landmark of sorts for stock market enthusiasts. One WhatsApp Group I was part of even carried this title proudly for a while.
The BSE MidCap and Small Cap indices whose fortunes we don’t usually care about but are of late paying more attention after market veterans showed the thumbs down were also up, about a 1 percent each.
It gets a little interesting because millions and quite literally millions of investors are still pouring into the stock markets, as all data sets are showing now.
This money is also going to initial public offers which are seeing among other things, fairly large founder or promoter exits, at least higher than before.
A report in CNBCTV18 last month said In 2023 Indian promoters successfully offloaded shares valued at approximately Rs 81,000 crore, twice the total of promoter stake sales witnessed in 2022 and four times the growth compared to the situation back in 2018.
Another report, in BQ Prime says 11 companies including JSW Infrastructure to Yatra Online, hope to raise over Rs 10,000 crore through the initial public offering route this month alone. Of which 3 have raised Rs 977 crore through the IPO route already.
The number of small investors have gone from approximately 40 million to around 140 million in 4 years.
This rush has come with a huge amount of liquidity which among other things is keeping the markets steady to strong, like right now, even if institutional investors including foreign investors are selling, again right now.
I reached out to market veteran G Chokkalingam of Equinomics Research and began by asking him what he was seeing in the underlying trends or currents in the market and what we could take from it.
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We touched upon oil last week which is now trading near a 10-month high near $90 a barrel as analysts are predicting and projecting tighter supply conditions.
The International Energy Agency predicts a “significant supply shortfall” in coming months and OPEC estimates the deficit could be the biggest in over a decade. The US government also expects that global consumption will exceed production, says Bloomberg.
OPEC leaders Saudi Arabia and Russia are constricting supplies.
Are Tax Collections Good or No?
Among other numbers most people think as weather vanes on what is happening in the economy are corporate tax collections.
Corporate tax collections between April and July had fallen 10% to Rs 176,000 crore ($21.20 billion) from a year earlier, government data showed.
This is despite healthy profit growth reported by listed Indian companies.
India's corporate tax collections must be looked at over a longer period of time and the full-year numbers are likely to be in line with budget estimates, India’s economic affairs secretary Ajay Seth told reporters on Thursday in a Reuters report.
"We should not look at a few months' data and try to find a long-term trend over there... my sense is that whatever numbers are there in terms of budget estimates and revenues, those will be realised," Ajay Seth told reporters.
Painting The Town Red
India’s decorative paints industry is estimated at Rs 70,000 crore. And for a long time, the organised part of it has been monopolised by a few players like Asian Paints, Berger Paints and Kansai Nerolac among others.
Near monopolies usually mean more players jump in quickly. That has not happened, at least not successfully in paints, excepting one or two like Indigo Paints in 2000. In recent years, several, larger players have jumped in including steel and infrastructure group JSW in 2019.
The latest to do so is Grasim Industries of the Aditya Birla Group which will launch its paint business under the brand name Birla Opus in the fourth quarter of the current financial year (Q4FY24).
In a release on Thursday, the flagship company of the Aditya Birla Group said that it will offer a "full suite of high-quality products in the decorative paint segment".
A research and development (R&D) facility has already been set up in Maharashtra. Moreover, it has piloted its painting services in key metro cities, the company said.
Grasim had previously committed an investment of Rs 10,000 crore towards setting up the paints business. The paints will be produced at the company's manufacturing plants in Haryana, Punjab, Tamil Nadu, Karnataka, Maharashtra, and West Bengal. They will have a total capacity of 1,332 million litres per annum (MLPA).
ONDC
India’s Open Network for Digital Commerce or ONDC was created as an open source - as the name says - platform to connect buyers to sellers directly via a buyer app. As a consumer you will see a buyer app. ONGC's point is that more than 12 million sellers earn their incomes by selling or reselling products and services but only 15,000 or less than 1% are ecommerce enabled. That is the opportunity.
ONDC is still growing and one of the challenges of course is the comfort for retail consumers around fulfilment and the concerns of dealing with the seller directly.
I caught up with T Koshi, MD of ONGC for The Core Report Weekend Edition and asked him, among other things, about ONE's journey and where it was right now.
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