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Stock Markets Make Peace With IT Stocks, MS Overtakes Apple

Microsoft ended Friday’s U.S. trading session as the most valuable publicly traded company, surpassing Apple after briefly topping the iPhone maker during intraday trading Thursday, CNBC reported

By Govindraj Ethiraj
New Update
MS Overtakes Apple
On today’s episode, financial journalist Govindraj Ethiraj talks to Rahul Jain, VP at Dolat Capital and IT company analyst as well as Dr Ajay Sahai, Director General of the Federation of Indian Export Organisations.

Our Top Reports For Today

  • (00:00) Stories Of The Day
  • (01:00) Stock markets make peace with IT stocks, MS overtakes Apple.
  • (03:55) Are the Government’s efforts to rein in inflation working?
  • (11:16) Mapping India’s oil prospects, onshore and offshore.
  • (18:24) How Bangladesh footwear exports are growing rapidly, as it exploits synergy with garment making.
  • (21:39) NRIs are buying more than 20% of new real estate, driving up prices on the premium end.
  • (23:32) Canada may cap international students arrivals.


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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The street wanted more from IT companies but then was happy that they delivered better results than what you might call a worse case situation. 

And that was enough to spark a frenzied buying, a day after Infosys and TCS revealed their Q3 results. And the market as a whole was up on Friday with the BSE Sensex hitting  a fresh life-time high at 72,721, and finally ended with a gain of 847 points at 72,568. 

The Nifty 50 hit a new summit at 21,928, before closing up 247-points at 21,895.

The rupee shot up by 11 paise against the US dollar on Friday, thanks to foreign portfolio investor (FPI) inflows into both debt and equity markets.

This was the eighth consecutive trading session the rupee strengthened on Friday; touching an intraday high of 82.86 per dollar before settling at 82.92, compared to 83.03 on Thursday.

Going by past experience, the rupee could get a little bit stronger, assuming flows are strong, but could return to around Rs 83 after that or a little below, against the dollar that is. That is going by the past. 

The US also declared consumer price inflation numbers - we will come to India numbers and some insights shortly - and the figure was higher than expected, triggering speculation that a interest rate cut which was expected to happen by March could get postponed.

US inflation came in at 3.4 percent, higher than, as we said, expected.

Speaking of the US, Microsoft ended Friday’s U.S. trading session as the most valuable publicly traded company, surpassing Apple  after briefly topping the iPhone maker during intraday trading Thursday, CNBC reported.

Microsofts’ market cap stood at $2.89 trillion, while Apple’s stock dropped by over 3%, lowering its valuation to $2.87 trillion.

Redburn Atlantic Equities analyst James Cordwell downgraded Apple to neutral from buy on Wednesday, citing “little room for upside over the next few years” in iPhone growth and an “anticipated underwhelming March quarter.”

Microsoft stock is up about 65% over the past 12 months, while Apple has advanced about 39%.

India’s Inflation Rises At Fastest In 4 Months

India's annual retail inflation rose at the fastest pace in four months in December, driven by a rise in food prices. 

Annual retail inflation rose to 5.69% in December from 5.55% the previous month, above the central bank's 4% target, data released by India's Ministry of Statistics said on Friday.

A Reuters poll of 56 economists had forecast a rate of 5.87%, so the final number below was below expectations of most economists.

Food inflation, which accounts for nearly half of the overall consumer price basket, was at 9.53% in December, up from 8.70% in November as prices of vegetables, pulses and spices rose.

This is despite the Government quite proactively trying to keep prices down through various interventions including of course stopping exports of products like non basmati rice, wheat, onion and sugar.

A 28% hike in vegetable prices is high and worrying because it reflects a systemic inability to tackle it. Also because the problems are structural and long term, like logistics and cold chains. 

I reached out to Aditi Nayar, an economist at ratings agency ICRA and began by asking her how she was looking at the overall trajectory of inflation going back the last 4-6 months and also which of the Government’s moves to rein in inflation were working..

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India Hunts For Oil

And now, the Energy segment, supported by IndiaEnergyWEek.

Nervousness is back in the oil markets with tensions in the red sea increasing over the weekend.

Brent oil rose to cross $80 a barrel after the US and its allies launched airstrikes against Houthi rebels in Yemen in retaliation for attacks on ships in the Red Sea before coming back to around $78.29 a barrel right now.

If you look back, the original fear, as far as oil prices went, was not the Israel-Hamas war which started with the terror attack on October 7 but whether this would draw in other countries in the region.

At that time and as a matter of fact until quite recently, the feeling was that the war would not affect crude oil flows or production.

That has changed in a manner that was not quite anticipated perhaps, in the form of attacks on cargo ships, including those carrying crude in the Red Sea, enroute to and from the Suez Canal.

Bloomberg said that Brent is now testing its 50-day moving average for the first time since October. If prices breach the level, it could spur additional buying by algorithms and technical traders, which means prices could rise.

Which brings us to India’s own efforts here. India is the world's third largest oil importer and consumer.

More specifically, in the last year, some 40% of India’s imports came from Russia alone, more so after Western nations stopped buying from Moscow following its invasion of Ukraine.

Be that as it may, India is not self-sufficient in oil, with some 85% of our crude requirement being imported whether from Russia or OPEC countries.

Various Indian state owned companies and private sector ones have been exploring and drilling for oil across the country.

And if you have not been following this space, you might be surprised to note the fairly aggressive efforts to find and drill for oil both onshore and offshore and in many cases extract more from wells that are decades old.

I had the opportunity to speak with Dr Ranjit Rath, CMD of Oil India Limited, India’s oldest and more than a century old oil company and the smallest among what are known as OIL PSUS of India, including Indian Oil, ONGC, BPCL and HPCL.

Oil India brings with it a unique location, originally in the north east of India and of course heritage.

I asked Mr Rath, a geologist by training, where he was seeing prospects of oil across India at this point.

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You can catch the full interview in The Core Report special series, the Energy Special on the link below.

This segment was supported by IndiaEnergyWeek. Log onto www.indiaenergyweek.com for more details. 

Bangladesh Rises In Footwear Exports Too

Much has been written about Bangladesh overtaking India in garment exports. While the same thing may not happen in footwear as well but Bangladesh is growing fast, which is worth noting in itself.

An insightful article in The Economic Times points out that Bangladesh’s footwear exports have risen from $1 billion to $1.7 billion in 2020-2022 while India’s exports have in the period grown from $2.8 billion to $3 billion. 

On the other hand, while the global footwear trade expanded by 5%, India’s exports contracted in the last three years.

So the reasons, as reported by The Economic Times, include India’s bias towards leather and handcrafted footwear as opposed to non-leather or machine-made footwear.

India exports of non-leather is only 19% while the global share is 70% with both China and Vietnam exports being in that ballpark, says an analysis from the Global Trade Research Initiative. 

India is of course a larger market within, with a $26 billion estimated market by GTRI.

“India is the second-largest producer of footwear, contributing 13% to worldwide production, and holds a 2.2% share in global exports. 

But Indians spend less on footwear, on average $18.2 per person on footwear, much lower than the per capita spending in China ($128.6), the USA ($303), and Japan ($333.3).”

On the other hand, India could make more non-leather shoes only if it produced the inputs here as well. 

Apparently, India imports most inputs and materials to make non-leather shoes. Non-leather shoes dominate India’s imports, constituting 77% of the $900-million footwear import value.

Incidentally, non leather mens shoes like sneakers, sports shoes and so on which are obviously growing well.

The Bangladesh example is interesting because the economy is capitalising on transferable skills between garments and non-leather shoes. And also in some ways appearing to gear itself for a situation where garment exports may either come down or diversify business.

Bangladesh also enjoys beneficial tariffs, for example, lower import duties when it exports to the EU, in areas like garments and shoes but is evidently making good use of them well before they expire.

One of the insights from the Apple manufacturing ecosystem which is growing in India now is not that we are making Apple phones or other Apple devices but how we are developing capabilities that can help make several gadgets in the electronics ecosystem and the materials that go into it.

And which is why businesses, industries and the skills that drive all of them need to grow as soon as they hit the ground and expand immediately.

NRIs Boost Indian Real Estate Market

Non-resident Indians, or NRIs, are back in Indian real estate buying some 20% of most major property launches, keeping prices high and on the higher end or premium properties costing more than Rs 1 crore each.

“It’s the first time in 45 years that I’m seeing luxury and mid-level housing grow faster than affordable housing,” Niranjan Hiranandani, managing director of Mumbai-based developer Hiranandani Group, said. The demand from overseas-based Indians has shown “crazy growth,” he said. “I have never seen such numbers in my life.”

Some 25% of 1,113 luxury residences sold by DLF in Gurugram near New Delhi in just three days — even before starting construction were bought by NRIs.

Indians living overseas purchased 20% of all homes sold by the Hiranandani Group in their last two launches, Niranjan Hiranandani managing director told Bloomberg, adding that demand from overseas based Indians had shown crazy growth. 

NRIs are buying for some old and new reasons.

The new one is perhaps improving rental yields, particularly after Covid while the old ones are of course a sense of connection with family in India and of course a favourable dollar to rupee conversion rate…presently 1 USD buying Rs 83.

Bloomberg quotes the example of an NRI living in the mid-western US state of Indiana who has so far bought five properties in India — initially for his parents and then subsequently as an investment.

Canada Might Cap International Students

Speaking of Indians overseas, Canada is considering a cap on the number of international students allowed to live in Canada, Reuters quoted Immigration Minister Marc Miller saying, as the government faces criticism for a housing affordability crisis.

The housing crisis has been blamed on an increase in migrants and international students fueling demand for homes just as inflation has slowed construction.

Official data show there were more than 800,000 foreign students with active visas in 2022, up from 275,000 in 2012.

Canada is a popular destination for international students since it is relatively easy to obtain a work permit.