- 1 hour ago
Indian benchmark indices opened lower, with the Nifty declining around two hundred points and slipping towards 23,200 levels amid rising crude oil prices and spiking US Treasury and domestic bond yields. Financial and banking counters led the losses across sectors, while insurance stocks witnessed severe selling following draft consultation proposals by the insurance regulator to tighten commission caps from financial year 2028. PB Fintech, Turtlemint, Max Financial, and ICICI Prudential Life recorded sharp cuts in early trade. Meanwhile, primary market activity remained in focus with anticipation surrounding the National Stock Exchange listing, even as recent entrants like Hero Motors and SS Retail traded higher. In another development, the Food Safety and Standards Authority of India initiated penal action against major quick-commerce and delivery platforms, including Amazon, Swiggy Instamart, BigBasket, Flipkart India, and Zepto, citing non-compliance, misleading claims, and listings of prohibited food articles.
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NewsTranscript
00:00The currency this morning once again moving towards 96, 95.83 versus 95.74.
00:05So this morning pretty much all the metrics are once again sliding.
00:09Even in the pre-open, we have got a little bit of a downtick this morning.
00:13So despite managing to hold on to gains and some appreciation over the first half of the week,
00:20by Friday we're once again seeing a slip towards 23,000, 23221 on your screen for now.
00:28Let me welcome in Gaurang Shah joining us this morning.
00:31Gaurang, once again, you know, markets are leaving us a little anxious, you know, at this point of time.
00:37It's the Fed in the background, we've got, you know, Z in the US, crude on the boil again.
00:43It's really back to square one.
00:46Hi Abha, thank you so much for having me on your show.
00:48Good morning to all your viewers and to you.
00:50A small disclosure, we may go into stock specific as well Abha.
00:53So all recommendations that I'll be sharing with you this morning on your show.
00:56So they're part of our fundamental system recommendation from a long-term point of view.
01:01Our company, Giojith or myself, we do not have any kind of personal investments,
01:04no financial interest, no conflict of interest.
01:06But we share similar investment ideas with our clients.
01:09They might have their investment interest.
01:10So Abha, I think it is a mix of the new flows that we are hearing specifically with the global
01:17situation.
01:20We had Xi Jinping in US meeting President Trump and then we had the Iranian representatives speaking about the situation.
01:31We had walkouts from the respective representatives of a respective country when they were speaking about the situation.
01:38And of course, the tantrum by US President and the rhetoric that he has been talking about over the last
01:46six and a half months,
01:47it needs to be seen how situation pan out in the next couple of days.
01:52Oil, again, there is a bump up in the crude oil prices.
01:55And that's one of the primary reasons why our markets are behaving the way they are behaving.
02:00I think it's going to be a range-bound trade above 23,000, 23,200 on the lower side
02:07and 23,400 to 23,500 on the higher side.
02:11Having said that, over the last couple of weeks, I think we are seeing sectorial rotation.
02:16That's going to be the order of the day.
02:17And news-based, stock-specific movement is something that we need to watch out for.
02:23But yes, eagerly waiting for that 10 o'clock on the clock with the NSE listing.
02:28Yes.
02:29I think capital markets will be something that will be in action today.
02:33Of course, very difficult to predict the pricing, which I'm not at all capable of doing it.
02:38But yes, as a disclosure, we had given a subscribe to the NSE IP hour to all our clients from
02:43a long-term point of view.
02:45All right. Exciting times indeed.
02:46I was just going to come to the Big Bang NSE IPO and I'll come back to that again in
02:51a few moments as well.
02:52Exciting to see what happens at 10 o'clock.
02:54Sehbi Chairman Tuhin Kanta Pandey has said the regulator is looking at issues around margins for longer-term equity derivative
03:01contracts.
03:01He's also called for policy stability as retail traders continue to report losses in equity derivatives.
03:07Listen in.
03:10You know, based on whatever study we do, that what's being done about it, right, from week to week.
03:17So I think there has to be a certain level of stability going forward, right?
03:22When you said you will reduce the margin requirement, does it mean on longer derivative products you're thinking about maybe
03:29having a lesser amount of margins from people who want to trade longer derivative contracts?
03:33Yeah, I mean, what I'm saying is that what are the different issues if you have, say, around margins or
03:38others in the longer term, we are prepared to look into that.
03:43All right, let's take a look at what else will be in focus today as well.
03:49We've got Jeffries on financials.
03:52The insurance regulator proposing to tighten caps there on insurance commissions from FY28.
03:58It sought public opinion on draft norms over the next month and rules apply prospectively.
04:04So a little negative coming in there for banks' bank assurance fees, especially credit protect premiums, as it's mostly single
04:13premium with high commissions.
04:14And it's based on FY26 Banker Commission slash FY27 normalised profit.
04:20IIB and IDFC have higher exposure and ICICI and PSU banks have lower risk here.
04:27So that's the latest coming in from Jeffries.
04:29And we had a very strong report, you know, earlier this week from UBS on financials, Goran.
04:35We had them saying that they feel that healthy asset quality across banks and NDFCs, flat, unsecured household leverage over
04:43the past three, four years,
04:45an abundant, you know, system, liquidity and a more risk-on stance from lenders as well is what they're pricing
04:53in.
04:53What do you make of that?
04:56Well, Sahab, we've been constructive on the entire BFSI segment for a pretty long period of time.
05:02That includes private sector banks, public sector banks and strong NDFCs.
05:07Having said that, I think there is a rhetoric in our markets in terms of creating a little bit of
05:11panic.
05:12Next month, we have the credit policy.
05:14Because the world is changing interest rates, they want India also to do that.
05:17But I think we'll have to leave it to the Monetary Policy Committee and the RBI Governor positive on the
05:22strong banks, both public, private, as well as strong NDFCs.
05:29All right.
05:30So, still sounding strong there.
05:32We've got opening ticks on your screen.
05:33Down a percent today.
05:34So, it's not even a moderate shave-off.
05:37We're down almost 200 points on the Nifty.
05:392, 3, 2, 6, 3 right now.
05:41Down over a percent on the Nifty Bank this morning.
05:44Financial services down about 2%.
05:46So, the first to see the hit, as usual.
05:51If you private bank down 1.5%.
05:52So, we're seeing cuts all across right now.
05:55Let's pull up the index for you.
05:57Get a sense of the breadth of the market.
05:58But I think the picture is pretty clear on your screen.
06:02And we've seen India gills also slump on the crude price increase.
06:06India 10-year bond yields is up 5 bps to 7%.
06:09And U.S. Treasury yields are now at 20-year highs.
06:13And so, these are concerns over Brent crossing 102 again.
06:16We've got higher yields pushing up borrowing costs.
06:19So, we've got a rate hike on the horizon.
06:21So, this is really what's troubling the market this morning.
06:24So, India gills slumping.
06:26And India 10-year bond yields up 5 bps as well.
06:29Treasury yields at 20-year highs.
06:32So, this is really what the picture is looking like this morning.
06:35Advanced decline ratio is completely skewed this morning.
06:38We've got a majority of stocks actually trending in the red.
06:41Financials, of course, the deepest hit this morning.
06:44So, it's a complete reversal to what we saw earlier in the week as well.
06:49Taking a look at some of the other losers on the list.
06:52And let me pull that up for you.
06:53Look at the VIX this morning.
06:54My gosh, about 7% high.
06:56It's really spiked.
06:57We've been trending soft on the VIX luckily for the last few weeks.
07:00But this morning, again on the back of the crude price hike.
07:03And maybe rate hike concerns.
07:05Not looking pretty.
07:06It's financials all the way.
07:07We've got HDFC Life down 5-6%.
07:10Bajaj Finn down 5%.
07:12Axis down 3%.
07:13These are not small cuts, Gaurang.
07:15Market is definitely looking incredibly nervous.
07:18And the list of financials just continues.
07:20The deepest cuts are all across the banking and NBFC names.
07:25Well, Abba, I think if we have a situation like this in terms of concerns on the yield front
07:32and concerns on the interest rate hike next month when the Credit Policy Committee takes place.
07:39And of course, not to forget, in terms of earnings, I don't think banks did bad.
07:45I think they did relatively well, barring one or two of them.
07:49But this is a knee-jerk reaction, Abba.
07:51I mean, I hope I'm normally not good at predicting, Abba.
07:56But I think we should see a little bit of recovery by the time we end the day today.
08:00And not to forget, next week is going to be truncated along with F&O expiry.
08:04So, that's also going to be very tricky, Abba, in terms of volatility.
08:09But I think if you're a long-term investor, these are great times, Abba, to create a portfolio
08:14in strong names, whether it is banking, BFSI segment, whether it is autos, whether it is
08:19defense, whether it is cap goods engineering, or capital-related market stocks.
08:23I think there are plenty of opportunities.
08:25Short-term, definitely there is a lot of pain, Abba.
08:28And largely, that pain is not from the local front, but from the global front.
08:34I'm just taking a look at the screen.
08:36We also got the IRDAI paper, Impact.
08:39We were just talking about that on the insurance names.
08:41But the cuts there are also incredibly deep.
08:44Pull up a PB FinTech, for example.
08:46Pull up a whole host of those names.
08:48They're down 10%, 15%.
08:50You know, Canada HSBC Life, they're down 5% to 6% right now.
08:54We've got Max Fin down about 10% this morning.
08:57PB Fin is also down about 10%.
08:59ICSA Pro Life down 7% this morning so far.
09:04Neva Bupa also taking a cut.
09:06So, it's across the board coming in on this paper with the insurance regulator.
09:11Tightening caps on insurance commissions.
09:14It's a complete nosedive on insurance names.
09:17Turtle Mint is down 20% right now.
09:20I mean, you know, it's again the smaller counters that get hit versus, of course,
09:28the larger banks that may have an insurance play.
09:30But across the board, some of these names are seeing massive selling.
09:36And I know you said knee-jerk reaction, Gorang.
09:38But let's take a look at this in perspective.
09:41Insurance, we were already talking about limited margin activity.
09:45Yes, we have seen, you know, performance coming in from the likes of a PB FinTech.
09:49But the questions around the, you know, potential upside have continued.
09:55Given now this latest whammy, would you still say buy on dips for this particular pocket of the market?
10:05Thank you, Karwajit.
10:06I think, yeah, I think Gorang had to take an urgent call.
10:10So, we'll come back to him on insurance.
10:12But it is a complete sell-off on these insurance names.
10:15Gorang, I don't know if you got a chance to hear my question.
10:18But I was just wondering when insurance in particular,
10:20given the fact that we've always had questions on the margins, right?
10:24And the potential upside.
10:26Would you still buy on dips given the kind of slamming they're seeing today?
10:30First of all, apologies, Abha.
10:31That was an urgent phone call that I had to take.
10:33So, sorry for that.
10:35So, yes, look, Abha, I think it's only going to be prudent for regulators to step in
10:41and bring in more accountability and transparency, Abha.
10:45We have heard multiple instances of mis-selling of products, Abha.
10:50And that is purely because of the incentives or commissions.
10:55I mean, incentive or commissions, I think for me, it's one and the same to be very honest.
11:00So, I think if industry players are not going by the rule book and if they are just to prop
11:11up their incentives or commissions or profitability, if they are mis-selling a product to a common
11:16person, I think that's the worst thing that you can do.
11:19So, I'm glad that regulators, whether it is SEBI, whether it is insurance regulator or whether it is any other
11:28regulator, I think it is time we bring in accountability and transparency.
11:32And I think to answer your question, we are positive on all four life insurance players, which are having
11:40large market share, LIC, SBI Life, HDFC Life and ICIC Prudential.
11:47We are also positive on one of non-life general insurance companies, ICIC Lombard.
11:53So, we remain positive.
11:55I mean, still, this is, I think, work in progress, Abha.
11:57We need to have a little bit of more clarity.
12:00This is a paper, consultancy paper, if I'm not mistaken.
12:03It is not the final outcome.
12:07All right.
12:08You know, big developments there on the insurance front.
12:11Now, ahead of Navratri, FSSAI has stepped up its crackdown on food safety violations.
12:16So, food regulator has initiated penal action against Amazon, Swiggy, Instamart, Big Basket, Flipkart India and Zepto
12:25over misleading claims, non-compliant product information and prohibited food listings.
12:31FSSAI has also flagged Milky Mist dairy products and Dhatura listings.
12:36Ashutosh joining us with us on what this means going forward.
12:39Ashutosh, take us for what, you know, how it's really going to impact consumers.
12:48Well, you know, to start with, every day we are seeing some or other updates coming from FSSAI
12:53and perhaps seems to be a large campaign that was, you know, literally gone against FSSAI
12:57that kind of we are seeing adulteration.
12:59There is the watchdog which is doing nothing.
13:02And for last few weeks, we see constant action.
13:04So, here, the larger e-commerce platforms, the food delivery platforms like Big Basket,
13:08Flipkart India, Amazon, Swiggy, Instamart, all for non-compliance of the regulatory norm
13:15that have been framed, including misleading of advertisement,
13:18the kind of product that you claim to be selling, including if there is a low-fat cream,
13:22whether it is low-fat cream or not.
13:23So, that is kind of non-compliance.
13:25For example, this includes misbranding, misleading claims,
13:29as well as sale and display of prohibited and poisonous food articles that it says
13:34that if there are certain food items are prohibited and that is still being sold in the name of XYZ,
13:39including particular product that is being sold.
13:42And if they claim it's a zero-fat, it's a zero-sugar,
13:45it's a, you know,
13:47we're making a big deal of all these products that we're having to eat.
13:53Okay, I think it's a slightly choppy line, but that's the latest from FSSAI.
13:58Just want to turn my attention to the recent listings.
14:01And remember, we're watching out for NSC this morning.
14:03That's the big one.
14:04Gorang, we've also had a few other recent listings.
14:06You know, for example, Hero Motors, SS Retail.
14:10Let's just pull them up.
14:12We've got some good amount of action coming in on those names.
14:15Hero Motors are 14-15% this morning.
14:18So, strong action there.
14:19And NSC is the big one today.
14:21You know, just want to get a sense from you on both of these.
14:24Did they pan out as you expected?
14:26You know, SS Retail is also up about 13-14%.
14:29So, the primary market is hot and happening.
14:33Well, yes, Abha.
14:34And there was a concern last week because the total IPO pipeline was 26,500 cross.
14:44And people were again misrepresentating and misguiding people in terms of sell-off in secondary market
14:51and liquidity moving to primary market, etc., etc.
14:54None of that happened.
14:56Secondary market survived.
14:57Primary market also survived.
14:59And I think there's plenty of liquidity in the system.
15:01My only request to all your viewers is that in this rush of IPO listing gains,
15:07please don't expect each and every paper to give you 40, 50, 60% premium on listing.
15:13Businesses are different, valuation are different, managements are different.
15:17So, you need to be careful if you are thinking about listing gains.
15:21But yes, there have been valid papers and with attractive valuation.
15:26And those papers, Abha will always see a decent listing.
15:29It's a different thing that on listing, some may possibly want to book out because of leverage
15:36that they have taken in terms of IPO subscription.
15:39But for NSE, I hope, I mean, I don't want to really make any prediction.
15:43But I expect it to be a very decent listing and not a runaway or not a large disappointment.
15:49Right.
15:50And did the NSE IPO in particular, Goran, pan out the way you anticipated in terms of the kind of
15:55rush for it,
15:56the kind of, you know, as you said, we don't know exactly about the pricing,
16:00but in terms of like the impact it's going to have as well on competitors?
16:04So, for this also, there was a lot of propaganda in the social media, if you actually go to see.
16:09And I don't know, I mean, this unsolicited, unrecognized international universities of social media, Abha.
16:16I'm far away from that.
16:18Thank God for that.
16:19I'm not on any one of them.
16:20So, there's a lot of, again, you know, people are misguiding and people are trying to create a fear
16:25that the IPO will get listed at a huge discount, so on and so forth.
16:29But I think last day, that was this week on Monday, we saw a decent subscription.
16:34And look, Abha, I think NSE is the largest platform provider, right?
16:39And if Indian capital markets have to do well, then platform providers, service providers,
16:44asset management companies and intermediaries, all of them will do well,
16:47provided they are fundamentally strong needs.
16:51All right.
16:53Noorang, thanks so much for joining us.
16:54Listen, let's hope the end of the week is not, you know, too damaging.
17:0123249 is where we're holding steady right now.
17:03But the impact is there on banks, financials, insurance.
17:06And on the upside, it's the primary marketplace and the big NFC listing that we're eyeing at 10 o'clock.
17:12We'll leave it there for now.
17:13Do tune in at 3 p.m. for all the closing action.
17:15Thanks for watching.
17:16Thanks for watching.