Banks Power The Market Up 941 Points

• (00:00) Stories Of The Day
• (01:00) Banks Power The Market Up 941 Points In Unexpected Surge
• (04:39) How Shanghai Retail Investors Are Sending Up Global Gold Prices
• (06:07) How Bangalore Is The Best Place To Be A Landlord
• (07:54) A New Tax Law To Help MSMEs Is Possibly Doing The Opposite
• (15:26) America Will Host A Major Cricket League, The T20 World Cup This Year

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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Banks Fire Up The Stock Market

It was a somewhat unexpectedly strong Monday at the stock markets as both the BSE Sensex and Nifty50 rose 1% each.

The overall cues, including from Asian markets were strong but the momentum was largely thanks to the banks, private and public.

Both stock indices meanwhile have begun inching back to their lifetime highs. 

The BSE Sensex closed 941 points higher at 74,671 levels, while NSE Nifty50 closed 223 points higher at 22,643 levels.

The broader markets, Nifty MidCap and SmallCap were moving more slowly, ending with gains of over 0.40 per cent and 0.20 per cent, respectively.

ICICI Bank rose almost 5% to hit a record high in its best session in over two years. On Saturday ICICI Bank posted March-quarter profit that beat analysts' estimates.

Axis Bank also hit a record high, days after beating fourth-quarter profit estimates. It has jumped 9% in three sessions, reported Reuters.

SBI rose more than 3%.

IT stocks are still not having it good with revenue pressures continuing. HCLTech fell 5.9% after reporting lower-than-expected fourth-quarter revenue.

Apollo Hospitals Enterprise  fell 4.64% after the hospital chain sold a stake in its digital unit in a deal that brokerages said undervalued the subsidiary.

The Bombay Stock Exchange the stock fell nearly 14% after the Securities & Exchange Board of India asked the exchange to pay regulatory fees on annual turnover based on the notional value of options contracts.

On Wall Street, the S&P 500, the Nasdaq Composite and the Dow Jones Industrial Average were all up under half a percent.

The big gainer was Tesla which jumped more than 11% after clearing a key hurdle for acceptance of its full self-driving technology in China following Elon Musk’s surprise visit to Beijing on Sunday. 

Apple climbed more than 3% on the heels of a bullish upgrade from investment firm Bernstein. Other big tech stocks like Microsoft, Alphabet, Meta and Nvidia were trading lower.

Interestingly, Domino's Pizza shares rose nearly 7% on Monday in early trade after gaining about 21% this year.

The pizza major managed to buck a downbeat trend for eating out in the United States, with better returns on its loyalty program and fresh promotional offers drawing inflation-weary consumers to its pizzas and chicken wings, Reuters reported. 

Oil Prices Ease Off Again Sighting Peace Deal Between Israel & Hamas

Oil fell in a choppy session as traders considered the possibility of a peace  deal between Israel and Hamas.

Bloomberg reported that US Secretary of State Antony Blinken will step up his push to secure a truce in Gaza during a visit to the region and the White House said Israel has agreed to hear out its concerns.

Crude prices were quoting under $89 a barrel.

Blame Shanghai Retail Investors For High Gold Prices

A quick check on gold which moved higher after a weekly drop.

Bullion rose marginally after losing more than 2% last week. 

Everything hinges around possible interest rate cuts in the US from the Federal Reserve which at this point are only appearing a possibility.

Higher rates are typically negative for gold as it doesn’t pay interest.

But then why have gold prices been rising ?

One reason is central banks who have been buying more this year, including China, but that is not the only reason.

Bloomberg says that after weeks of debate about whether a mystery buyer was stoking the rally, several prominent figures in the global gold market are concluding that the major new driving force is what it calls a legion of fleet-footed retail investors on the Shanghai Futures Exchange.

In a matter of weeks, the SHFE has gone from a sedate futures venue to a nexus of the global gold market. 

While centres like London and New York have also seen activity rise, the fact that SHFE volumes have spiked from a low base is an indicator that a new bunch of Chinese investors are driving prices sharply higher.

Meanwhile, spot gold climbed 0.2% to $2,342.21 an ounce at 12:39 p.m. in London, after recording its first weekly decline since mid-March. 

The Best Place To Rent Out A House is Bangalore

Rentals are rising across India and which means it is a good time to be a landlord, for those who can afford to be one.

Real estate consulting firm Anarock says that average rental values have soared and rental yields - the annual ROI investors earn from capital invested in a property - have been rising steadily. 

And the latest ANAROCK data indicates that as before, IT-dominated Bengaluru tops the list with a rental yield of 4.45% in Q1 2024.

You may have of course seen some social media posts of youngsters protesting complaining about rising rentals and draconian landlords.

Apparently, Bengaluru’s rental yield in pre-Covid 2019 stood at 3.6%, which amounts to a growth of 24% in this period.

Mumbai follows closely behind since rents have been rising here too with a rental yield of 4.15% in Q1 2024 as against 3.5% back in 2019 – a 19% growth. Gurugram is close behind with a rental yield of 4.1% in the last quarter against 3.5% in 2019.

So good news for Bangalore landlords. And obviously not good news at all for renters.

Now if the landlords can put the higher yields they are earning to do something about the water supply as well.

Small Enterprises Face Chicken And Egg Situation

Small businesses often complain and I can concur being part of one that some large companies and businesses don’t pay us on time and make us run around. I do stress on the fact that it is only some companies.

As a small business, delayed payments can cause havoc with cash flows and shakes the foundation of the business.

The good news is that the Government heard us.

The bad news is that they came up with a law that while intending to help us might do the opposite.

It all centres around Clause H in section 43B of the Income Tax Act, Finance Act 2023.

Which says that payments made to small businesses that are delayed beyond a specific period can be claimed as an expenditure only in the year payments are made and not in the year the liability arose.

Which means..

The outcome of this well intentioned but perhaps inappropriate tool is that bigger businesses are becoming wary of working with small enterprises. It's a catch 22 that will hurt the small guys more.

I spoke with Ved Jain, Former President of The Institute of Chartered Accountants of India and a fervent advocate against the use of Income Tax for what he calls social objectives and began by asking him to describe where this new rule came from.

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Get Set For The ICC Men’s T20 World Cup In America

The ninth edition of the ICC Men's T20 World Cup, which will be a 20-team event, will take place in the USA and West Indies from 1 to 29 June, 2024. There will be 55 games.

The T20 World Cup is a landmark one for obvious reasons and also comes on the heels of IPL. 

I reached out to well known cricket and sports journalist and commentator Ayaz Memon and began by asking him what would be different in the 9th edition?

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A quick reminder, the stock markets are closed on May 1 so we will not have an edition tomorrow morning and will return on Thursday, May 2nd