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Stockmarkets Recover, More Experts Advising Caution On Midcaps

The benchmark indices bounced back in trades on Thursday with the S&P BSE Sensex ending the day with a gain of 335 points at 73,097. The NSE Nifty 50 closed 149 points up at 22,147. Both indices swung back and forth before settling down higher

By Govindraj Ethiraj
New Update
Stock Markets Recover Midcaps
On today’s episode, financial journalist Govindraj Ethiraj talks to Sneha Poddar, AVP Research, Broking and Distribution at Motilal Oswal Financial Services as well as Anil Matai, former CEO of Pharmaceuticals at Novartis India, Former Managing Director at Zydus Healthcare and current Director General of the OPPI (Organisation of Pharmaceutical Producers of India).

Our Top Reports For Today

    • (00:00) Stories Of The Day
    • (01:00) Stockmarkets Recover, More Experts Are Advising Caution On Midcaps.
    • (08:19) Fitch Ratings Raises India Growth Forecast To 7% For Next Year.
    • (09:32) Russia’s Oil Revenues Fall As India Pulls Back
    • (10:44) India Cuts Petrol, Diesel Prices By Rs 2
    • (11:09) Ranjit Shahani, Former Novartis Vice Chairman, Whose Life And Times Tracked India’s MNC Pharmaceutical Industry

    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.


    Stock Markets Recover, But It's More Like A Technical Bounce Back

    One way of looking at it is the bulls are not letting go and continue to buy up stocks. The data on the supply side reflects that anyway, thousands of crores of fresh money is coming into the market everyday, mostly heading towards the mid and small caps though that might be changing.

    The benchmark indices bounced back in trades on Thursday with the S&P BSE Sensex ending the day with a gain of 335 points at 73,097. The NSE Nifty 50 closed 149 points up at 22,147. Both indices swung back and forth before settling down higher.

    The focus, whether said or unsaid, is still on the middle of the market and below it.

    Brokerage Jeffries has said the recent correction in smallcap and midcap stocks as healthy as it is not a larger meltdown, alongwith the lines of what market veteran G Chokkalingam told yes yesterday on The Core Report. 

    The correction gained significance after the Association of Mutual Funds in India (AMFI) recently issued an advisory to its members, urging them to moderate inflows to small and midcap schemes including suspending fresh subscriptions through lump sum mode and to rebalance their portfolios.

    Small cap stocks have been sliding for a while now, and more than 80% of stocks have been in the red (in returns since February 19 when the fall began, MC pointed out.

    However, there was a pull back on Thursday in the market including in the small cap and mid cap space.

    What does that tell us or not about this somewhat volatile region in the market and what signals should investors be looking for or not?

    I reached out to Sneha Poddar, AVP Research, Broking and Distribution and began by first asking her what to make of the fact that small and mid cap indices recovered on 14th, after falling substantially on 13th.


    Fitch Ratings Raises India Forecast To 7% For Next Year

    Global ratings agency Fitch Ratings raised India's FY25 GDP growth forecast to 7 percent from 6.5 percent earlier as it expects the economy to continue its strong expansion.

    This is the next financial year which starts in April 2024 and not the current one. For the current year, it is pegging growth at 7.8%

    Fitch expects a 50 bps rate cut by the Reserve Bank of India from July to December and foresees India's CPI inflation gradually declining to 4 percent by the end of 2024. 

    Meanwhile, Fitch trimmed China’s 2024 forecast, to 4.5 percent from 4.6 percent, reflecting a deterioration in the outlook for the property sector and growing evidence of deflationary pressures. 

    "Prospects for EM (ex China) have also brightened, particularly in India, where we now expect growth to reach 7.8 percent in the fiscal year ending March 2024 (FY24) and 7 percent in FY25, both sizable upward revisions. 

    With GDP growth having exceeded 8 percent for three consecutive quarters, we expect an easing in growth momentum in the final quarter of the current fiscal year, implying an estimate of 7.8 percent for growth in FY 23-24," said Fitch.

    "Domestic demand, especially investment, will be the main driver of growth, amid sustained levels of business and consumer confidence," Fitch said and ET reported.

    Moody's had raised India's 2024 GDP growth estimate to 6.8 percent from 6.1 percent

    Russian Oil Revenues Are Falling, After India Pulls Back

    Russia’s oil-export revenue declined in February as tougher monitoring of western sanctions against the Kremlin reduced some buyers’ appetite for the nation’s barrels, according to the International Energy Agency, said Bloomberg.

    Russia, amongst the top three oil producers in the world, earned $15.69 billion from crude and petroleum product exports last month, down 0.95% from January, the Paris-based agency said in its monthly oil report on Thursday.

    However, its crude shipments fell to 4.75 million barrels a day compared to the December peak of 5 million barrels a day, the IEA said.

    This decline in Russian crude flows abroad was mainly driven by India, which reduced its purchases of Russian crude barrels by 420,000 barrels a day in February compared to the month before, the IEA said.

    “The impact of lower crude export volumes was only partially offset by higher product export prices,” the agency said.

    India is now importing from other countries, including traditional partners like the Middle East.

    Meanwhile, Brent crude was quoting at a shade over $85 a barrel.

    The Government has cut petrol and diesel prices by ₹ 2

    The Government has cut petrol and diesel prices by ₹ 2, Union Minister for Petroleum and Natural Gas, Hardeep Singh Puri, said on social media last night.

    The revised price will be effective as of this morning. 

    Earlier, the Government slashed prices of LPG or cooking gas cylinders by Rs 100.

    Ranjit Shahani, Former Novartis Chief, Passes Away

    I had the opportunity to interview Ranjit Shahani, former chief of Novartis in India who passed on on Saturday (March 9, 2024) at 74 on several occasions.

    Sometimes it was to do with the pharmaceutical industry and he usually spoke as a flagbearer of not just his company but the industry as a whole.

    The points he made were usually larger, to do with the larger patent regime in the country, market access and the healthcare space in general.

    Strangely or otherwise, the last time I formally interviewed him, it was the context of a technology conference and he was talking about healthtech investments.

    By then, he had already retired from Novartis where he served as managing director and then vice chairman for almost 17 years.

    Shahani also held positions on the Organisation of Pharmaceutical Producers of India,the body that represents predominantly the multinational pharma companies in the country.

    But Shahani’s tenure is interesting for another reason and do stay on to hear what that is.

    But if you were to take a step back, as I tried to do, Shahani’s tenure at Novartis also marks a peak and shift in the very fortunes of the multinational pharmaceutical industry.

    Much has changed. But a few things stood out. For one, he fought many battles, including on securing patent protection for a famous anti cancer drug called Glivec.

    Having lost the battle, he pretty much turned the company’s strategy on its head. More on that coming up.

    I reached out to Anil Matai, who was earlier CEO of Pharmaceuticals at Novartis, in some ways Shahani’s successor to that post until 2014 and later worked with Zydus Healthcare as MD and now as director general of the OPPI. I began by asking him how he saw the two tracks, Shahani’s career in pharmaceuticals including as his boss and India’s pharmaceutical industry itself. 


    Lower Pay Hikes This Year

    Corporate executives in India are likely to get an average salary hike of 9 per cent in 2024, said consulting firm Deloitte, a figure that’s a little lower than last year’s 9.6%, reported the Business Standard.

    Increments in 2024 will be better than pre-pandemic levels in all sectors except information technology (IT) and business process outsourcing (BPOs), according to the ‘Deloitte India Talent Outlook 2024’ report.

    The number of employees expected to be promoted is fewer: 11.5 per cent in 2024 compared to 12.3 per cent in 2023.

    According to Deloitte, attrition rate fell from 20.2 per cent in 2022 to 18.1 per cent in 2023 due to slower hiring. The EY report said attrition in 2023 was 18.3 per cent. The two numbers are below levels seen during Covid-19.