News Nook: Dec 14, 2024

 Indian Sector Specific News:

A) BFSI:

1) EPFO May Soon Offer ATM Access for Provident Fund Withdrawals

• EPFO is planning to let subscribers withdraw PF money directly from ATMs using dedicated cards, aiming to match banking services. Currently, claim settlements take 7-10 days before money is transferred to bank accounts.
• Improved IT infrastructure and hardware upgrades, expected by January 2025, will streamline processes and enhance efficiency, according to Union Labour Secretary Sumita Dawra.
• Source: Business Standard

2) SEBI Proposes Retail Participation in Algorithmic Trading

• SEBI plans to allow retail investors to engage in algorithmic (algo) trading through brokers with stock exchange approval, ensuring proper checks and safeguards to maintain market integrity.
• Brokers will act as principals for algo trading via APIs, with all algo orders tagged for audit trails and any changes requiring exchange approval.
• Source: Indian Express

B) Automobile:

1) High Dispatches and Low Retail Sales Raise Passenger Vehicle Inventory Concerns

• Passenger vehicle dispatches rose by 4.1% in November 2024, reaching 348,000 units, but retail sales declined 14%, leading to higher dealer inventory levels of 65–68 days. FADA urged OEMs to rationalize supply.
• Two-wheeler retail sales grew by 15.8%, while passenger vehicles and commercial vehicles saw declines of 13.72% and 6.08%, respectively, attributed to weak market sentiment and limited rural demand.
• Source: Business Standard

C) Pharma:

1) Pharmaceutical Data and Analytics Market to Reach $2.1 Billion by 2028

• The global pharmaceutical data and analytics market, valued at $1.1 billion in 2022, is projected to grow to $2.1 billion by 2028 at a CAGR of 9.5%, with China’s market share rising from 20.2% to 25.9% in the same period.
• Key growth drivers include big data platforms, business intelligence tools, and data management, with target identification and clinical trials being the most impacted areas of the pharmaceutical value chain.
• Source: Express Pharma

2) Indian Pharma Industry to Showcase Innovation at Clinical Pharmacy Congress London 2025

• India will highlight its advancements in pharmaceuticals, healthcare technologies, and clinical pharmacy at CPCL 2025, Europe’s largest clinical pharmacy event, hosting 3,400 global professionals.
• Led by Pharmexcil, India's participation includes an exclusive booth and direct engagement with decision-makers to strengthen ties and showcase innovations in pharmaceuticals, medical devices, and healthcare technologies.
• Source: Pharmabiz

3) Sun Pharmaceutical Faces ₹65 Lakh Fine for Duty Short Payment

• Customs authorities fined Sun Pharmaceutical ₹65 lakh for alleged short payment of customs duties, following investigations into discrepancies in declarations.
• The company plans to address the matter through legal channels, asserting compliance with regulations.
• Source: Economic Times

D) Agriculture:

1) RBI Increases Collateral-Free Agricultural Loan Limit to ₹2 Lakh

• The RBI raised the collateral-free loan limit for farmers from ₹1.6 lakh to ₹2 lakh, effective January 1, 2025, to address rising input costs and inflation.
• The move benefits small and marginal farmers by improving credit access, reducing borrowing costs, and enhancing livelihoods through initiatives like the Kisan Credit Card and Modified Interest Subvention Scheme.
• Source: PIB Delhi

E) Energy:

1) India's Oil and Gas Imports Surge 6.7% in November; Consumption Grows 9.3%

• India saw a 6.7% rise in petroleum product (POL) imports in November, with domestic consumption increasing by 9.3%, driven by economic activity and festive demand.
• The surge highlights India’s dependency on imports for energy needs, alongside growing domestic energy demand.
• Source: Economic Times

2) Geothermal Energy: India, China to Lead New Clean Energy Source as Coal Use Declines

• The IEA predicts India and China will dominate the geothermal energy sector, tapping into Earth’s natural heat for power as they shift from coal to cleaner energy.
• Geothermal energy, currently 0.3% of global electricity demand, holds immense potential, with China, the U.S., and other key nations consuming 90% of its current output.
• Source: Eurasian Times

F) Infrastructure:

1) Macquarie Plans to Sell $2 Billion Indian Road Portfolio

• Macquarie Asset Management intends to divest its largest Indian road portfolio, comprising nine national highway projects, valued at approximately $2 billion.
• The move reflects Macquarie's strategic shift and offers an opportunity for investors in India's infrastructure sector.
• Source: Constructure World

 Indian Economy and Government Initiatives

• India's economic growth has slowed, with manufacturing and export growth dipping, leading to a lower GDP growth forecast for the year, signaling potential challenges ahead.
• Corporate tax cuts aimed at boosting investment and job creation have not had the expected impact, and growth in private and government consumption is also weakening.
• The Expenditure Budget outlines the government's planned spending, divided into Revenue Expenditure (recurring costs like salaries and services) and Capital Expenditure (spending on long-term assets like infrastructure projects).
• Revenue Expenditure includes ongoing costs that don't create assets, such as salaries, pensions, defense spending, and public services, necessary for the government's day-to-day operations.
• The Modi government increased capital expenditure from over ₹5 lakh crore in 2021-22 to ₹11.11 lakh crore in 2024-25.
• The government has focused on improving infrastructure, including roads, air, and rail connectivity, over the past decade.

 Indian Stock Market Overview

• The Indian stock market faced a significant drop on Friday, with the Sensex falling 1207 points (1.48%) and the Nifty 50 dropping over 1%.
• Market sentiment was impacted by slowing earnings growth, a consumption slowdown, and profit booking due to high stock valuations.
• Jefferies predicts moderate returns of around 10% for Nifty 50 by the end of 2025, with a target of 26,600.
• Jefferies favors large-cap stocks over mid-cap and small-cap due to cautious market conditions.
• Jefferies is 'overweight' on sectors like financials, IT, telecom, automobile, healthcare, utilities, and real estate, while 'underweight' on energy, consumer staples, consumer discretionary, and materials.
• The Nifty's one-year forward price-to-earnings multiple is above its five-year average, suggesting moderate returns aligned with projected earnings growth.

 Bonus Briefs

• Fundstrat's 2025 outlook for the S&P 500 is cautious, predicting a significant jump in value early in the year, followed by a potential major sell-off.
• Despite recession fears and a 50 bps rate cut by the US Federal Reserve, the S&P 500 has maintained strong growth, setting new records.
• The report suggests a possible downward trend for the S&P 500 in late 2025, driven by a sharp sell-off and the usual September dip.