Latest news with #NiftyMidcap100
Time of India
5 hours ago
- Business
- Time of India
RBI's warning: Indian equities risk being overvalued, earnings may not justify prices
Reserve Bank of India India's stock markets are showing signs of overvaluation, especially in the small- and mid-cap segments, the Reserve Bank of India (RBI) warned in its latest Financial Stability Report (FSR). The central bank's concerns come at a time when global economic growth remains uncertain, and corporate earnings may struggle to keep up with market expectations. The apex bank noted that current asset prices, both in India and globally, are running well ahead of economic fundamentals, driven by optimism that may not be justified in the present climate. To justify current valuations, corporate earnings will have to grow at a strong pace, which may be difficult in an uncertain economic environment, the report stated, quoted by ET. According to the FSR, while the Nifty Midcap 100 index is projected to grow at 17.4%, it would require a growth rate of 28% to fully support current valuations. Similarly, the Nifty Smallcap 100 is expected to grow at 16.9%, but needs a 30.6% expansion to be fairly priced. Nilesh Shetty, portfolio manager at Quantum Advisors, said valuations had already corrected earlier in the year but have since rebounded sharply. 'We are definitely seeing froth in the small and midcap stocks. The Indian markets did correct much before the tariff uncertainties and there was a significant correction in the small and midcap space, primarily because of valuations,' Shetty told ET. 'But there has been a significant rebound and we are very near to the all-time high, despite the global uncertainties. Earnings in Q1 could also be slower than expected.' Siddarth Bhamre, head of institutional research at Asit C Mehta, also noted that while midcaps are currently trading at a premium due to high growth potential, the sustainability of this growth remains in question. 'But is this growth high for just 1-2 years or in the longer term?' he said. He also flagged the limited availability of high-quality mid- and small-cap stocks as a reason for stretched valuations. 'People are ready to buy quality stocks at much higher multiples in the mid and smallcap segments and quality names here are not enough. There would always be some pockets and some names where we would find good value, but the job of identifying these names is getting difficult everyday,' Bhamre added. The RBI's report further cautioned that if earnings fail to meet expectations, or if valuations begin to revert, it could have a major impact on the market, particularly in the midcap space. The overvaluation risks aren't limited to India. The FSR also pointed out that asset prices in several global markets remain high relative to fundamentals. In the US, for instance, the Nasdaq is forecast to grow at 19.9% but would need to post 26% growth to justify current levels. 'Price corrections and elevated volatility of US equities can spill over to other markets, especially emerging markets like India,' the report said, highlighting the interconnected risks in the global financial system. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Hans India
7 hours ago
- Business
- Hans India
Trade Setyp for July 3: Nifty slips below 25,500: Stocks to watch tomorrow
The Nifty 50 index opened higher on July 2 but soon faced heavy selling pressure, shedding 230 points from its intraday high of 25,608. Despite a late-session recovery attempt, the index closed 88 points lower at 25,453, slipping below the crucial 25,500 mark. Financial stocks remained under pressure, contributing significantly to the decline. Top gainers included Tata Steel, JSW Steel, and Asian Paints, while Shriram Finance, HDFC Life, and IndusInd Bank were among the top losers. The Nifty Midcap 100 dropped 0.14% and the Nifty Smallcap 100 fell 0.41%, reflecting broader profit-booking. Sector-wise, metals, consumer durables, and healthcare showed resilience, while realty, financial services, and PSU banks dragged the market lower. Foreign Institutional Investors (FIIs) remained net sellers, while Domestic Institutional Investors (DIIs) absorbed the pressure as net buyers. Analysts suggest immediate support at previous swing highs of 25,317 and 25,222. Nandish Shah of HDFC Securities identifies the 25,640–25,740 range as a resistance band. Rupak De of LKP Securities highlighted the importance of the 25,300 level, aligning with the 38.2% Fibonacci retracement zone. A decisive move above 25,500 could indicate short-term recovery, while a breach below 25,300 may deepen the correction phase. Stocks to Watch on July 3: Hindustan Zinc: Q1 mined metal output up 1% YoY at 265 kt; saleable metal and refined zinc production down sequentially and annually. Nestle India: Commissions new ₹105 crore Maggi noodles line at Sanand, Gujarat. Aurobindo Pharma: Subsidiary secures European Commission approval for Dazublys. RVNL: Appoints Chandan Kumar Verma as CFO effective July 2. Voltas: Receives ₹265.25 crore GST demand notice for FY19–FY21. Coromandel International: Gets CCI clearance to acquire 53.13% stake in NACL Industries. Indian Bank: Reduces MCLR by 5 basis points for most tenures, effective July 3.
India Today
11 hours ago
- Business
- India Today
Sensex ends 288 points lower, Nifty settles below 25, 500; Tata Steel down 4%
Benchmark stock market indices ended lower on Wednesday as investors traded cautiously ahead of Q1 result announcements from India Inc and the looming tariff S&P BSE Sensex was down 287.60 points to end at 83,409.69, while the NSE Nifty50 lost 88.40 points to end at 25, Nair, Head of Research, Geojit Investments Limited, said that mixed global cues, particularly ahead of the impending tariff deadline, are driving investor caution."Market attention is gradually shifting to crucial Q1 earnings, which have high expectations. Underlying trends such as robust macroeconomic fundamentals and increased government expenditure continue to support market resilience. However, being at the breach level of the recent rally, a cautiousness is expected to continue in the near term," he Sensex ended trading with mixed results today. Tata Steel topped the gainers with a massive 3.72% surge, followed by Asian Paints up 2.15%. UltraTech Cement rose 1.60%, Trent gained 1.43%, and Maruti Suzuki climbed 1.38%.Bajaj Finserv fell the most at 2.10%, followed by Larsen & Toubro down 1.87%. Bajaj Finance dropped 1.48%, HDFC Bank declined 1.30%, and Bharat Electronics slipped 1.28%. Nifty Midcap 100 fell 0.14%, Nifty Smallcap dropped 0.41%, while India VIX declined 0.65%, showing reduced market sectors posted gains at the close. Nifty Metal led with a 1.41% rise, followed by Nifty Consumer Durables up 1.04%, Nifty Healthcare gaining 0.34%, Nifty Auto rising 0.32%, Nifty Pharma up 0.32%, and Nifty IT climbing 0.12%.Nifty Realty dropped the most at 1.44%, followed by Nifty Financial Services down 1.09%, Nifty Private Bank falling 0.65%, Nifty Media declining 0.36%, Nifty Oil & Gas slipping 0.17%, and Nifty FMCG down 0.12%.advertisement"Nifty50 tested its immediate support at 25,400, while 25,600 remains a key resistance level. A decisive break of either level is likely to lead to a directional move," said Aditya Gaggar, Director of Progressive Shares. (Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- Ends
Hans India
12 hours ago
- Business
- Hans India
Sensex, Nifty end lower as investors turn cautious over Trump's tariff deadline
Mumbai: The stock markets ended lower on Wednesday, as investor sentiment remained cautious due to US President Donald Trump's firm stand on the upcoming tariff deadline. The nervousness led to a risk-off mood among investors, pulling the benchmark indices lower. After rising to an intra-day high of 83,935.29, the Sensex lost momentum and closed at 83,409.69, down 287.6 points or 0.34 per cent. The Nifty also declined by 88.45 points or 0.35 per cent to end the day at 25,453.4. "Mixed global cues, particularly ahead of the impending tariff deadline, are driving investor caution,' Vinod Nair of Geojit Investments Limited said. 'Market attention is gradually shifting to crucial Q1 earnings, which have high expectations,' he added. Nair added that the underlying trends such as robust macroeconomic fundamentals and increased government expenditure continue to support market resilience. Among the Sensex stocks, the biggest losers were Bajaj Finserv, L&T, Bajaj Finance, HDFC Bank, and Bharat Electronics. On the other hand, Tata Steel, Asian Paints, Ultratech Cement, Trent, Maruti, and Sun Pharma were among the top gainers. Broader markets followed a similar trend. The Nifty Midcap100 index ended down by 0.14 per cent, while the Nifty Smallcap100 index slipped 0.41 per cent. Sector-wise, Nifty Metal, Consumer Durables, Auto, IT, Pharma, and Healthcare managed to close in the green. However, Nifty Realty, Financial Services, Bank, Oil & Gas, and Media dragged the overall sentiment with losses. The total market capitalisation of all listed companies on the NSE stood at Rs 5.35 trillion. Meanwhile, the India VIX, which measures market volatility, eased slightly by 0.66 per cent to settle at 12.44 points -- suggesting some cooling off in investor nervousness despite the day's losses. Gold traded in a narrow range as market awaits key US data releases. Comex Gold moved between $3327 – $3340, while MCX Gold traded between Rs 97,000 – Rs 97,400. 'The prices expected to remain in the broader range of Rs 96,500 – Rs 97,850 as participants price in potential dollar weakness and upcoming US data, including Non-Farm Payrolls (NFP), ADP non-farm employment, and unemployment figures,' Jateen Trivedi of LKP Securities stated.
Economic Times
a day ago
- Business
- Economic Times
Indian stocks at risk of overvaluation amid low-growth environment, warns RBI
The Reserve Bank of India (RBI) has cautioned about overvaluation risks in Indian stocks, particularly in the small and mid-cap segments, amidst a low-growth global environment. Market experts, including Nilesh Shetty from Quantum Advisors, echo these concerns, noting that current valuations may not be justified by expected earnings growth. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Mumbai: Indian stocks face evident overvaluation risks in an expectedly low-growth world, the central bank said in its latest financial sector assessment, with several market experts concurring that earnings may have run well ahead of asset prices in certain vulnerable pockets - particularly small- and mid-cap shares."We are definitely seeing froth in the small and midcap stocks. The Indian markets did correct much before the tariff uncertainties and there was a significant correction in the small and midcap space, primarily because of valuations," Nilesh Shetty, portfolio manager, Quantum Advisors told ET."But there has been a significant rebound and we are very near to the all-time high, despite the global uncertainties. Earnings in Q1 could also be slower than expected," Shetty a broader level, the central bank's Financial Stability Report (FSR) highlighted the potential valuation risks emanating from geopolitics and tariff-related trade displacements, and the current stock prices may not adequately reflect the globally, FSR said, asset valuations in several markets have stayed high relative to fundamentals, despite the recent market turmoil. To justify current valuations, corporate earnings will have to grow at a robust pace, which may be difficult in an uncertain economic environment, FSR to the FSR, the Nifty Midcap 100 is expected to grow at 17.4%, but would require a growth of 28% to justify current valuations. Similarly, Nifty Smallcap 100 growth is expected at 16.9%, but would require a growth of 30.6% to justify the earnings forecast updates more slowly than market prices, stock prices are yet to reflect the prevailing geopolitical tensions and elevated uncertainty about the direction of tariffs. Therefore, the current valuations may not be reflecting the extent of overvaluation, FSR to Siddarth Bhamre, head of institutional Research at Asit C Mehta, midcaps now command a higher valuation premium because there is high growth. 'But is this growth high for just 1-2 years or in the longer term?' he asked. Significant capital inflows into mid and small cap mutual funds have been observed, and there is limited availability of high-quality stocks here. Due to this scarcity, investors are likely to pay premium valuations for quality names.'People are ready to buy quality stocks at much higher multiples in the mid and smallcap segments and quality names here are not enough. There would always be some pockets and some names where we would find good value, but the job of identifying these names is getting difficult everyday,' Bhamre told contribution of equity risk premium to returns remains high for midcap stocks. Hence, between earnings revisions and valuation cuts, market impact could be significant in the event of adverse shocks, according to RBI's with domestic markets, global asset valuations in several markets have also stayed high relative to fundamentals, despite the recent market turmoil.'Price corrections and elevated volatility of US equities can spill over to other markets, especially emerging markets like India,' the report said. These risks have been concentrated with exposures to a few large technology firms. US Nasdaq is estimated to grow at 19.9%, however, it would require a growth of 26% to justify the valuations.
