Markets Stage Relief Rally, Search For Fresh Directions

• (00:00) Stories Of The Day
• (01:00) Markets Stage Relief Rally, Search For Fresh Directions, Tech Stocks Lose Ground On Wall Street
• (02:47) Oil Prices Are Falling Fast, Now At $86 A Barrel
• (05:08) Reliance Industries Now A $120 Billion Company
• (06:25) Diamond Exports Fall Sharply
• (07:19) Insurance Regulator Wants New Health Insurance Products Including For Older People, Will Companies Deliver?

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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Markets Stabilise After Bout Of Tensions Of Interest Rate Pressures

Indian stocks moved up on Monday. Since there was no clear reason ascribable, people called it a relief rally.

The BSE Sensex closed up 560 points at 73,649, while the Nifty50 ended at 22,336, up 189 points or 0.86 per cent.

Top gainers were Axis Bank, L&T, Ultratech Cement, Bajaj Finance, Wipro, ICICI Bank, Nestle India, SBI, Infosys, Tech M, and Asian Paints were the top gainers on the Sensex.

A quick peek on what is happening on Wall Street because that tends to affect things here.

Last week was not so good for tech stocks. The  'Magnificent 7' of U.S. mega cap tech stocks retreated sharply as first-quarter earnings updates kicked off this week with AI major Nvidia falling 10% on Friday after a nervy week for the sector.

Four of the Magnificent 7 companies are due to report corporate updates this week - Tesla , Meta , Microsoft and Alphabet .

But the 10% drop of artificial intelligence bellwether Nvidia on Friday is perhaps the most eye-catching move of a pretty dour week for the sector. 

Even though shares in the chip giant are still up more than 50% for the year to date, they have now dropped 22% from last month's peaks to their lowest since February, Reuters reported.

This is also a good time to note that stocks on Wall Street, particularly tech stocks, are known to swing quite wildly, in both directions.

Meanwhile, UBS analysts on Monday downgraded what they dubbed the 'Big 6 Tech' stocks - basically the Magnificent 7 minus Tesla - to neutral from overweight, according to Reuters.

Oil Prices Are Falling Fast

Oil prices fell as some of the risk premium from tensions in the Middle East continued to recede.

Brent crude was quoting near $86 a barrel after posting the biggest drop since early February last week. Gold prices also fell. More on gold in a moment.

Friday was a tense day with Israel responding to Iran’s missile strike with strikes of its own into Iran’s territory and then both sides going unusually silent, presumably because of strong backchannel pressure and efforts to keep them that way. 

Calling it an uneasy calm over the market, Bloomberg reported Tehran saying Israel has received the “necessary response at this stage.”

The US House has passed new sanctions on Iran’s oil sector following the hostilities and also approved fresh funding for Ukraine in its war against Russia.

Oil prices are now quoting 12% higher this year.

Oil prices have receded and so have gold prices which are moving somewhat in tandem now, driven as they are by similar factors as well, for example in this middle east tensions which as we have noted are fading, for now.

Gold prices fell 2% on Monday as lower war-linked tensions reduced the rush towards safe haven assets like gold.

Spot gold was down 2% at $2,354.61 per ounce.

Gold had hit $2,417.59 per ounce in the previous session, close to the April 12 record high of $2,431.29 as investors sought refuge in the metal’s safe-haven.

In India, gold prices declined by Rs 450 to Rs 73,650 per 10 grams, down from around Rs 74,100 per 10 grams on Friday.

Silver prices also fell by Rs 1,100 to Rs 85,500 per kg. In the previous close, it had closed at Rs 86,600 per kg.

Incidentally, traders were predicting a $3,000 per ounce for gold which may still be possible, but not right now i would think.

Reliance Industries Is A $120 Billion Company

Oil-to-telecom conglomerate Reliance Industries Limited (RIL) on Monday reported a 2% fall in consolidated net profits to Rs 18,951 crore for the quarter that ended on 31 March 2024 (Q4FY24).

The company reported revenue of Rs 2,40,715 crore, up from Rs 2,16,265 crore reported during the same period last year.

Reliance Industries posted revenues of over Rs 10 lakh crore or $120 billion, up 2.6% year on year.

The company's annual consolidated profit after tax increased by 7.3% Y-o-Y to ₹79,020 crore ($9.5 billion).

It also reported strong capital expenditure for the year ended March 31, 2024, was ₹131,769 crore ($15.8 billion).

The company also announced a dividend of Rs 10 per share for the year ended March 2024. 

In the latest quarter, oil and & gas segment revenues increased sharply by 42.0%. 

Cut & Polished Diamond Exports Fall

Cut and polished exports from India fell 27% last year to around $z16 billion because of sluggish demand from the United States, China and the United Arab Emirates, the Gem and Jewellery Export Promotion Council said and Reuters reported.

The fall in exports forced India, also the world's biggest diamond polisher, to reduce imports of rough diamonds by 18% from a year ago to $14 billion in the same year.

Interestingly, India's plain gold jewellery exports surged nearly 62% in 2023/24 to $6.79 billion as shipments to the United Arab Emirates (UAE) more than doubled due to the Comprehensive Economic Partnership Agreement, signed between India and the UAE.

Regulator Wants More Health Insurance Products, Will Companies Comply?

India’s insurance regulator, the IREDA, announced several new products and process changes over the weekend for health insurance companies.

Among the key ones, it said it was removing the 65 years limit for fresh insurance policies and also eased up several rules on pre existing condition limitations.

There are several other products, including ones linked to maternity.

Now, all this has not happened earlier for a reason.

The question therefore is will insurance companies fall in line and if so how. 

More importantly, what is the context of the new announcements?

I reached out to Nilesh Sathe, former director of the Insurance Regulatory & Development Authority of India and also director now on several private insurance company boards.

I began by asking him how the insurance companies would respond to this diktat and if the regulator's intent would translate into product and how ?

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Boeing 747 Bids Goodbye, Unions Say Hello

An Air India Boeing 747 took to the skies for the last time on Monday — 

Air India bid adieu to its last remaining Boeing 747 on Monday, marking the end of an era for the iconic jumbo jet. The aircraft, once registered as VT-EVA and christened "Agra," departed from Mumbai's airport for the final time after it was sold to an overseas company.

“Today, we wave goodbye to the first of our last Queen of the Skies — the B747 — departing Mumbai. Thank you for an era of majestic flights. We’ll miss your iconic presence," Air India tweeted. 

Elsewhere, technicians at a company that repairs and maintains Air India Ltd. aircraft have called off a strike planned for Tuesday, easing concerns that the industrial action could spark a renewed bout of travel chaos, Bloomberg reported.

Staff at AI Engineering Services Ltd. — a state-run company that counts Air India as its top client — won’t go ahead with their plans after management agreed to meet some of their demands. 

That includes revisions to workers’ pay by the end of the month and offering career progression opportunities by May 31, according to a joint letter from the company’s chief human resources officer and the union secretary seen by Bloomberg News. The new measures will be valid for four years, it said.

A few weeks ago, Vistara was, jointly owned by Air India’s owner Tata Group and Singapore Airlines Ltd., was forced to cancel more than 100 flights in the course of about a week after pilots called out sick en masse due to complaints about fatigue and pay cuts.

Meanwhile, the title of the “world’s best airport” crown has gone from 12-time winner Singapore to Doha  in the Skytrax World Airport Awards 2024.

In a strong showing for Asia, Seoul Incheon bagged third place — also being named 2024’s most family friendly airport — while Tokyo’s twin facilities of Haneda and Narita took fourth and fifth spots.