Valuation Is of the New Era, but Where’s the New-Era ‘Story’ To Back It?
The current phase in the stock market is unique. It defies many of the past patterns that have played out in markets around the world. Stock indices are now trading at ‘nose-bleed’ valuations. The Nifty P/E (price-to-earnings ratio) at ~26 is almost the highest ever. The last three times the index was trading at these levels, there was always a ‘new era’ story to justify such excessive...
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  • Nifty, Sensex Indecisive – Thursday closing report

    The major indices of the Indian stock markets were range-bound on Thursday and closed with small losses over Wednesday’s close. After opening on a positive note, the key Indian equity indices ceded their gains to trade in the negative territory on Thursday. According to analysts, the indices were weighed down by selling pressure on auto, capital goods and banking stocks. On the NSE, there were 486 advances, 1,227 declines and 350 unchanged. The trends of the major indices in the course of Thursday’s trading are given in the table below:

     

     
    German auto component maker Bosch would invest Rs1,700 crore in India over the next three years, a top company official said. "To meet the rising demand in the Indian market and expand its strong role in our global network, we will invest Rs1,700 crore over the next three years," Bosch Group Chairman and Chief Executive Volkmar Denner told reporters here. A major part of the fresh investment will be used to expand the company's smart campus here and modernize its manufacturing facilities in the Indian sub-continent. The 66-year-old Bosch has 18 manufacturing sites and 7 development and application centres across the country, with 31,000 employees, including 18,000 research and development (R&D) associates. Besides three plants in Bengaluru, the company's other production sites are at Chakan near Pune and Nashik in Maharashtra, Jaipur and Chennai and other states in the country. Of the group's consolidated revenue of Rs19,204 crore, Rs13,790 crore was generated by third parties, while its flagship company (Bosch Ltd) contributed Rs10,842 crore in fiscal 2017-18. "We will integrate our mobility services and Artificial Intelligence (AI) in India, as we are committed to address its transition to Bharat Stage (BS)-VI from April 2020 from BS-IV currently," said Denner. Bosch shares closed at Rs17,940.05, up 1.07% on the NSE.
     
    In a sudden development, the Economic Offences Wing (EOW) arrested Ravindra P Marathe, the Chairman and Managing Director of Bank of Maharashtra, in a case of Rs3,000 crore fraudulent loans extended to Pune's DSK Group, an official said. Bank of Maharashtra shares closed at Rs13.45, up 0.75% on the NSE.
     
    Aerospace major Boeing said that it has delivered the first of "737 MAX" aircraft ordered by Jet Airways. According to the company, Jet Airways will be first Indian carrier to fly the new and improved 737 airplane, "which delivers a double-digit improvement in fuel efficiency and improved passenger comfort". "This delivery marks the first of 150 737 MAX airplanes the Mumbai-based airline has on order with Boeing, following two separate orders for 75 jets placed in 2015 and earlier this year," the aerospace major said in a statement. As per Boeing's statement, the "737 MAX" is the fastest-selling airplane in Boeing's history, accumulating more than 4,500 orders from 99 customers worldwide. Jet Airways shares closed at Rs377.00, down 1.11% on the NSE.
     
    Tech Mahindra announced a strategic investment in the US and Germany. The firm inaugurated its research and development centre -- Makers Lab -- in Munich, Germany and at Plano, Dallas, the US. According to Tech Mahindra, "Maker's Lab" is a research and development hub for co-innovation of solutions and services of the future with customers, partner companies, research institutions, universities, and start-ups. With the launch of the Makers Lab in the US and Germany, Tech Mahindra now has seven R&D centres globally. Tech Mahindra shares closed at Rs684.20, down 0.92% on the NSE.
     
    The Interpol will soon issue a Red Corner Notice (RCN) against diamond jeweller Nirav Modi, who is one of the accused in the Rs13,500 crore Punjab National Bank fraud, officials said on Wednesday. A Central Bureau of Investigation (CBI) official said that "we have expedited the process to issue a RCN against Nirav Modi" as it has been known that he travelled to multiple countries between February 10 and March 31 on revoked Indian passport. The CBI officials said that a June 5 letter, shared by Britain, revealed that the fugitive businessman travelled from John F. Kennedy International Airport US, to Britain's Heathrow Airport on February 10; from Frank Pais Airport in Cuba to Heathrow on February 15; from Heathrow to Hong Kong International Airport on March 15; from there back to Heathrow on March 28 and from Heathrow to Charles de Gaulle Airport in France on March 31. On June 11, the CBI approached the Interpol to issue a RCN against Nirav Modi. On June 13, it again approached the Interpol to issue a RCN against Nirav Modi's brother Nishal, who is a Belgian national. 
     
    US Commerce Secretary Wilbur Ross on Wednesday said global tariffs on steel and aluminium were necessary to prevent China from routing those metals to the United States via other regions.
     
    The top gainers and top losers of the major indices are given in the table below:
     
     
    The closing values of the major Asian indices are given in the table below:
     
     
  • User

    Nifty, Sensex Rally Again – Wednesday closing report

    We had mentioned in Tuesday’s closing report that Nifty, Sensex continued to be under pressure. The major indices of the Indian stock markets rallied on Wednesday and closed with gains over Tuesday’s close. Broadly positive Asian cues lifted the key Indian equity indices on Wednesday, with the barometer Sensex of the BSE gaining over 250 points. According to analysts, banking, consumer durables and metal stocks witnessed buying activity. On the NSE, there were 864 advances, 843 declines and 345 unchanged. The trends of the major indices in the course of Wednesday’s trading are given in the table below:

     

    Global software major Infosys said it has opened a digital centre of excellence at Marseille to provide expertise to its clients in the region, and hire and train local talent. "The centre will make digital offerings to companies in France as they navigate to the next state of their business journey," the IT major said in a statement here. Infosys shares closed at Rs1,241.45, down 0.01% on the NSE.
     
    Textiles major Arvind Ltd is looking to take its B2C (business to consumer) segment which includes fabrics and ready-to-wear garments to Rs1,500 crore in the next five years from the current Rs700 crore, an official said on Wednesday. "Under B2C, only men's wear business stands now at Rs400 crore and we are looking at this to grow to Rs1,000 crore in five years. If you include the women's wear, the overall segment stands at Rs700 crore and is expected to be Rs1,500 crore," Susheel Kaul, CEO, Lifestyle Fabrics - Knits and Wovens, said here. The company's overall textiles business currently stands at Rs6,000 crore. Of this, the knits and woven segment contributes some Rs3,000 crore, he said on the sidelines of the launch of a festive collection. The company currently has presence in 10,000 retail touchpoints across India and has 200 exclusive stores. Rather than supplying fabrics, the company is focusing on "verticalisation" and would get into more manufacturing garments, Kaul said. "Today, 10% of fabrics that we produce are being converted into garments by ourselves. Over the next five years, we are looking at increasing this by 40-50 per cent," he said. Arvind, which sells about 300 million metres of fabrics and over 30 million pieces of ready to wear apparel, is also expecting its textiles business to grow to Rs10,000 crore and will be investing Rs1,500 crore over the next three years, he added. The company’s shares closed at Rs406.50, up 0.09% on the NSE.
     
    Stocks of Indian airlines plunged on Wednesday after  data showed that the number of domestic air passengers registered a slower growth of 16.53% during May on account of rising fuel prices leading to increase in fares.  Indian carriers carried 11.9 million passengers during May, up from 10.17 million in May 2017, a Directorate General of Civil Aviation (DGCA) data showed. InterGlobe Aviation shares closed at Rs1,136.45, down 7.50% on the NSE. Jet Airways shares closed at Rs382.50, down 1.51% on the NSE. 
     
    General Electric (G.E.), the last original member of the Dow Jones Industrial Average, was dropped from the blue-chip index for the first time in 110 years and replaced by the Walgreens Boots Alliance drugstore chain. Australia's biggest telecom operator Telstra is cutting 8,000 jobs in a dramatic bid to bring down costs, the company announced on Wednesday. There is a shake-up going on among large employers in the global stock markets.
     
    Stock markets fell around the world on Wednesday in the wake of US President Donald Trump's latest tariffs threat to China. The Dow Jones was down 300 points after Asian and European markets fell sharply earlier. Trump has threatened to put tariffs on an extra $200bn of Chinese goods, sparking fears of a trade war. The US President said the tariffs would be imposed if China "refuses to change its practices". He condemned China's "unfair practices related to the acquisition of American intellectual property and technology" and added: "Rather than altering those practices, it is now threatening United States companies, workers, and farmers who have done nothing wrong." China's Shanghai Composite fared the worst in Asia, ending the day down 3.8%. In Europe, Germany's Dax index was down 1.2% by the close and France's Cac 40 had lost 1.1%. Away from Trump's dispute with China, Russia said it would impose tariffs on certain American goods in response to the recent tariffs placed on steel and aluminium imports by the US.
     
    The top gainers and top losers of the major indices are given in the table below:
     
     
    The closing values of the major Asian indices are given in the table below:
     
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