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Economic Times
an hour ago
- Business
- Economic Times
Rupee gains slightly to cap week clouded by Middle East conflict
The Indian rupee ended modestly higher on Friday but fell for a second consecutive week as the conflict between Iran and Israel remained the key driver for global markets and kept energy prices elevated, pressuring oil-sensitive currencies in Asia. ADVERTISEMENT The rupee ended at 86.5850, up from its close of 86.7225 in the previous session. It was down nearly 0.6% on the week. While escalating tensions in the Middle East kept risk appetite under pressure for much of the week, markets found some relief on Friday after U.S. President Donald Trump pushed back a decision on U.S. military involvement in the Israel-Iran war. Brent crude oil prices declined more than 2% on the day after rallying to a five-month high of $79.04 per barrel earlier in the week. Most equity gauges in Asia logged gains, with India's benchmark equity indexes, the BSE Sensex and Nifty 50 , rising 1.3% each. Analysts pointed out that oil prices and the Middle East conflict would likely remain the key drivers for FX markets in the near term. On the day, the dollar index was a tad lower at 98.6 but was on course for a weekly gain. ADVERTISEMENT "The FX market has taken the somewhat lower probability of the U.S. intervening in Iran already this weekend as an opportunity to re-enter USD short positions, especially against European currencies," ING Bank said in a note. "This confirms that a constant flow of oil-positive, risk-negative geopolitical news is needed to keep the dollar supported," the note added. ADVERTISEMENT For the rupee, meanwhile, traders will also gauge the extent of portfolio inflows that a large IPO scheduled next week will draw. Sizeable inflows could help the rupee hold ground above the 86.50 mark while a sharp rise in crude oil prices could build momentum for a fall below 87, a trader at a foreign bank said. ADVERTISEMENT (You can now subscribe to our ETMarkets WhatsApp channel)
Economic Times
3 hours ago
- Business
- Economic Times
IT stocks up 35% in less than 2 months. Can it withstand Fed caution and geopolitical risk?
Fed Pushes Back on Rate Cuts Live Events Geopolitical Risks Tariff Threats Outlook (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel After a sharp sell-off earlier this year, Indian IT stocks have delivered a striking comeback. The Nifty IT index has surged 10.5% in under two months, with several individual stocks posting even stronger gains. But with global headwinds intensifying—from a cautious US Federal Reserve to rising geopolitical tensions—the sustainability of this rally is now in question. Coforge has rallied nearly 35%, while Tech Mahindra and LTIMindtree are up 28% each. Persistent Systems Oracle Financial Services Software (OFSS), and Mphasis have posted gains of 16% to 22%. Even large-caps like Infosys and Wipro delivered double-digit returns in the same the rebound is starting to face resistance. Following the US Fed 's June policy meeting, the Nifty IT index slipped nearly 1%, signalling renewed caution among Federal Reserve kept its benchmark rate unchanged in June but raised its core PCE inflation projection—its preferred inflation measure—from 2.8% to 3.1% for 2025. Headline PCE is now expected to reach 3%, up from earlier estimates, indicating that price pressures are proving persistent.'The Federal Reserve's decision to hold interest rates steady comes as no surprise, given the persistent inflationary pressures in the U.S. economy,' said Suresh Darak, Founder, Bondbazaar. 'These pressures were... exacerbated by global conflicts pushing up oil prices and sustaining inflation.'At the same time, US GDP growth expectations have been revised down to 1.4%, raising concerns about delayed tech spending by large clients. 'Growth and inflation outlook is at loggerheads at this moment,' said Vaqarjaved Khan, Senior Fundamental Analyst at Angel One. 'Markets are interpreting this tone as somewhat hawkish.'With only one rate cut now likely in FY26, Indian IT companies that rely on US enterprise spending may see continued pressure on deal as rate uncertainty builds, global tensions are driving a fresh spike in oil prices. Over the last week, conflict between Iran and Israel has intensified, and there are fears that the US may get involved. Iran's Supreme Leader has threatened to block the Strait of Hormuz, a vital passage for nearly 20% of the world's oil shipments, while US President Donald Trump has hinted at a more aggressive US a result, Brent crude prices jumped more than 18% to $79, while WTI rose 18.5% to $75.7 over just seven trading Indian IT firms, a prolonged oil rally could lead to higher inflation globally, currency volatility, and tighter tech budgets for energy-sensitive risks are also back in focus as the US heads toward its presidential election. Fed Chair Jerome Powell recently warned that 'tariff effects on inflation can be persistent,' sparking concern for Indian IT exporters that depend on stable global trade flows.'Going forward, if the US Fed delivers a 50-bps rate cut in 2025, it would increase liquidity in the global markets,' said Khan. 'However... Middle East tension and tariff-related announcements by the US... could increase inflation expectations globally. If any of these risks play out at a larger extent, the upside scenario in Indian equities might get halted.'The recent 35% rally in IT stocks has been driven in part by easing attrition, improving margins, and hopes of a demand revival. But with the Fed turning cautious and geopolitical risks rising, the sector's near-term trajectory looks uncertain.'Jerome Powell's comment that 'despite heightened uncertainty, the economy is in solid position' is important. However, he has warned that 'tariff effects on inflation can be persistent'... With only 1.4% GDP growth expected this year, the US is unlikely to attract a lot of capital flows,' said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit IT names like LTIMindtree and Tech Mahindra dropped over 3% in a single session on June 19—reflecting the sector's sensitivity to global IT index's sharp bounce from its early-2025 lows shows that investors remain optimistic about long-term fundamentals. However, the path forward is likely to be sticky inflation, oil-driven macro risks, tariff uncertainty, and a cautious Fed, the sector's recovery rally faces real tests. Whether the momentum can continue—or gives way to another round of selling—may depend on how these risks evolve over the next quarter.: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)
Time of India
3 hours ago
- Business
- Time of India
No low-hanging fruits in this market; be ready for healthy real returns but lower nominal returns: Prashant Jain
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel , CIO,, observes that the Indian market is fairly valued. He notes reduced valuation dispersion across sectors. Nominal GDP growth is around 10-12%. Profit growth should align with this. Nifty is expected to compound in low double digits. Consumer discretionary and capital spending should grow faster. Banks and utilities look relatively better. He remains underweight in consumer staples and large-cap is always the case. In equities, it is always a game of right understanding, discipline, and lots and lots of patience. In a growing economy, the more patient you are, the more wealth is created. Multiple people have said this in multiple ways, but yes, what you are saying is absolutely is probably the most fairly valued market that I have seen in my entire career. Not just in aggregate terms, but even across sectors, the dispersion in valuations has really come down. Five years back, retail banks were five times price to book; corporate banks were 0.2 to half time price to book. They have converged between two, two-and-a-half stocks were 70-80 PE. Utilities or defence companies were 3, 4, 5, 7 PE. Both come around to 15 to 40 odd times. This is a market which has little room for multiples to move up and even across sectors the under and over valuation is the lowest I have seen. This is a classic compounding market and one more thing which has changed which all investors should take note of is that while the real growth in India continues to slowly tick up, inflation has come down really a result, our nominal GDP growth is now growing at around 10-11%. Margins are fairly healthy across sectors. Barring isolated companies, we do not see too much room for margin improvement. At a very broad level, I feel profit growth should track nominal GDP growth around 10-12%. We saw it a few days back that even bank credit growth has slowed down to 9 odd percent and so, aligning with nominal GDP. It is growing companies are growing in single digits. So, this is a market where Nifty should compound in low double digits over next 5-10 years and not much to choose across sectors. I think that 10-12% compounding is extremely valuable if you put it in the context of extremely low inflation and low cost of capital. The gap between India and US interest rates is now sub-2%. The margin is the lowest we have ever experienced. For most of my career this number used to be between 4% to 8%. And now, it is sub-2%. So, we have to be prepared for healthy real returns but sharply lower nominal returns. That is what I thought looking at these I said, some dispersion is, of course, there but it is sharply lower compared to the past. Having said that, I feel consumer discretionary and capital spending should continue to grow faster than nominal GDP. Consumer staples and IT, especially the large companies should grow much slower. But this is about growth in businesses, growth in profits. Valuations seem to be discounting most of what I the stocks outperforming just because profits are growing higher need not be the case. But I still feel on the margin, banks look a little better; utilities look a little better. The consumer discretionary looks alright to me; pharmaceuticals based on individual companies are promising. And what we are underweight on is basically consumer staples and largecap are right some themes will grow faster. Of course, I mean, Make in India is a very powerful theme. But it has been discussed for many, many years. Defence is, of course, a very powerful theme. So, these themes will definitely grow. Digital businesses is a very powerful theme. They will continue to outpace the GDP growth by a wide margin. The only challenge these themes have is that they appear to be fairly valued, and in some cases, even example, look at the price movement of defence companies. They are up 10x to 15x, so the multiples are not cheap, of course, growth is there. The key is that the growth is mispriced and I see very little areas where companies with a promise of faster growth are mispriced. So that is why one has to be a little cautious. There have been multiple occasions in the past when companies have done exceedingly well but stocks have done nothing over 10-20 years because the growth was overestimated and over discounted by the market. I do not think there are any low-hanging fruits in these markets.: I wish it was the case. But as I said, this is one of the most perfect markets that I have seen in my entire career – both in terms of aggregate multiples and multiples across sectors., I am sure there will be a few companies, maybe many companies, which will in the end outperform. But I am able to spot these right will be individual companies which need not fit a theme. Pre-covid maybe there were three crore Demat accounts, today there are 13 or 15 crore Demat accounts. So, this has been a narrative-driven market and most of these are first-time investors and narratives. The narrative is correct and it is very logical and that is why these narratives have probably fully or over discounted. That is why I feel it will be a market where one can try and outperform the markets by individual bottom-up picks and not through theme- based investing. At least that is my view. Of course, one could be wrong and some themes may outperform significantly even from here.
Economic Times
3 hours ago
- Business
- Economic Times
No low-hanging fruits in this market; be ready for healthy real returns but lower nominal returns: Prashant Jain
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel , CIO,, observes that the Indian market is fairly valued. He notes reduced valuation dispersion across sectors. Nominal GDP growth is around 10-12%. Profit growth should align with this. Nifty is expected to compound in low double digits. Consumer discretionary and capital spending should grow faster. Banks and utilities look relatively better. He remains underweight in consumer staples and large-cap is always the case. In equities, it is always a game of right understanding, discipline, and lots and lots of patience. In a growing economy, the more patient you are, the more wealth is created. Multiple people have said this in multiple ways, but yes, what you are saying is absolutely is probably the most fairly valued market that I have seen in my entire career. Not just in aggregate terms, but even across sectors, the dispersion in valuations has really come down. Five years back, retail banks were five times price to book; corporate banks were 0.2 to half time price to book. They have converged between two, two-and-a-half stocks were 70-80 PE. Utilities or defence companies were 3, 4, 5, 7 PE. Both come around to 15 to 40 odd times. This is a market which has little room for multiples to move up and even across sectors the under and over valuation is the lowest I have seen. This is a classic compounding market and one more thing which has changed which all investors should take note of is that while the real growth in India continues to slowly tick up, inflation has come down really a result, our nominal GDP growth is now growing at around 10-11%. Margins are fairly healthy across sectors. Barring isolated companies, we do not see too much room for margin improvement. At a very broad level, I feel profit growth should track nominal GDP growth around 10-12%. We saw it a few days back that even bank credit growth has slowed down to 9 odd percent and so, aligning with nominal GDP. It is growing companies are growing in single digits. So, this is a market where Nifty should compound in low double digits over next 5-10 years and not much to choose across sectors. I think that 10-12% compounding is extremely valuable if you put it in the context of extremely low inflation and low cost of capital. The gap between India and US interest rates is now sub-2%. The margin is the lowest we have ever experienced. For most of my career this number used to be between 4% to 8%. And now, it is sub-2%. So, we have to be prepared for healthy real returns but sharply lower nominal returns. That is what I thought looking at these I said, some dispersion is, of course, there but it is sharply lower compared to the past. Having said that, I feel consumer discretionary and capital spending should continue to grow faster than nominal GDP. Consumer staples and IT, especially the large companies should grow much slower. But this is about growth in businesses, growth in profits. Valuations seem to be discounting most of what I the stocks outperforming just because profits are growing higher need not be the case. But I still feel on the margin, banks look a little better; utilities look a little better. The consumer discretionary looks alright to me; pharmaceuticals based on individual companies are promising. And what we are underweight on is basically consumer staples and largecap are right some themes will grow faster. Of course, I mean, Make in India is a very powerful theme. But it has been discussed for many, many years. Defence is, of course, a very powerful theme. So, these themes will definitely grow. Digital businesses is a very powerful theme. They will continue to outpace the GDP growth by a wide margin. The only challenge these themes have is that they appear to be fairly valued, and in some cases, even example, look at the price movement of defence companies. They are up 10x to 15x, so the multiples are not cheap, of course, growth is there. The key is that the growth is mispriced and I see very little areas where companies with a promise of faster growth are mispriced. So that is why one has to be a little cautious. There have been multiple occasions in the past when companies have done exceedingly well but stocks have done nothing over 10-20 years because the growth was overestimated and over discounted by the market. I do not think there are any low-hanging fruits in these markets.: I wish it was the case. But as I said, this is one of the most perfect markets that I have seen in my entire career – both in terms of aggregate multiples and multiples across sectors., I am sure there will be a few companies, maybe many companies, which will in the end outperform. But I am able to spot these right will be individual companies which need not fit a theme. Pre-covid maybe there were three crore Demat accounts, today there are 13 or 15 crore Demat accounts. So, this has been a narrative-driven market and most of these are first-time investors and narratives. The narrative is correct and it is very logical and that is why these narratives have probably fully or over discounted. That is why I feel it will be a market where one can try and outperform the markets by individual bottom-up picks and not through theme- based investing. At least that is my view. Of course, one could be wrong and some themes may outperform significantly even from here.
Economic Times
4 hours ago
- Business
- Economic Times
Influx Healthtech IPO subscribed over 41 times on Day 3; GMP signals strong listing
Influx Healthtech IPO GMP Live Events Business Overview and Fund Utilisation (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel The Rs 55.63 crore initial public offering (IPO) of Influx Healthtech was subscribed 41.07 times by 11:26 a.m. on the final day of bidding, Friday, driven by strong interest from retail and non-institutional retail investor portion was subscribed 53.88 times, while the non-institutional investor (NII) segment saw 63.64 times subscription. The qualified institutional buyer (QIB) portion was subscribed 1.71 the grey market, Influx Healthtech shares were commanding a premium of Rs 37–38, indicating an estimated listing price of around Rs 134. This reflects a 39% gain over the issue's upper price band of Rs 96 per IPO opened on June 17 and closes today. It is priced in the range of Rs 91–96 per share, with a minimum lot size of 1,200 Influx Healthtech is a contract development and manufacturing organisation (CDMO) that offers third-party manufacturing and product development services across nutraceuticals, cosmetics, ayurvedic products, and veterinary feed manufacturing operations are based in Thane, where it produces a wide range of products including tablets, gummies, jellies, skincare solutions, and ayurvedic the Rs 55.63 crore raised, Rs 45.07 crore is through a fresh issue and Rs 10.56 crore via offer-for-sale. The company plans to utilise Rs 34.19 crore for establishing two new manufacturing facilities focused on nutraceutical and veterinary products, along with investments in machinery and general corporate FY25, Influx Healthtech reported revenue of Rs 104.99 crore and a net profit of Rs 13.37 shares are proposed to be listed on the NSE SME platform, with a tentative listing date of June 25.: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)
