CLSA and Citi are taking opposite stances on Indian equities. CLSA reversed its tactical overweight on China while raising exposure to India, saying the South Asian nation is least likely to feel the heat from potentially higher tariffs when Donald Trump takes office as US President. The brokerage also pointed out that India offers a relative oasis of forex stability and the recent stock declines have made valuations attractive. Citi isn’t as optimistic. The brokerage recently downgraded Indian stocks, citing concerns about weaker earnings momentum.
Local funds’ cash hoard intact despite selloff
Foreign investors have sold over $13 billion of Indian equities since October, but local institutions acted as counter-balance with heavy buying. Interestingly, this hasn’t made a big dent in the cash levels of local mutual funds, according to Elara Capital. In October — the worst month for local shares in four years — the total cash reserves across all mutual fund plans fell by just 6.5 billion rupees to 1.68 trillion in October. The reason: a flood of cash into ETFs and index funds, as investors scrambled to ‘buy the dip,’ helped local institutions keep their powder dry.
HAL sees retail support despite mixed earnings
Hindustan Aeronautics bounced off its June lows after posting a mixed bag of quarterly earnings — profit beat estimates, but revenues fell short. While defense stocks are no longer the rage they were at the start of the year, retail investors are not giving up hope on HAL. The 12 billion rupees ($141 million) in outstanding margin-financed positions attests to that. Institutions, however, have been cool to the stock for a few quarters now. Still, analysts at Jefferies see it as a good bet during a market decline, thanks to its strong order book.
Analysts actions:
- Hero MotoCorp Raised to Add at HDFC Securities; PT 5,087 rupees
- Swiggy Rated New Add at Equirus Securities Pvt Ltd
- PNC Infratech Cut to Hold at ICICI Securities; PT 307 rupees
And, finally..
Office space leasing is gaining traction, even as concerns about a slowing economy linger. The demand is being driven by finance companies and co-working businesses. According to Nuvama, factors like the growth of global capability centers and rapid conversion of special economic zones to non-SEZs have fueled gross leasing activity in the latest quarter. While the long term performance of REITs hasn’t been particularly strong, they offer a safe haven for investors if the broader market weakens further.
