The recent 25-basis-point cut by the Federal Reserve has eased one major global worry, and regional markets are rejoicing. However, it's unclear if this move will be enough to stabilize Indian equities after a late slide pulled the market to a near month-low.
As India's mining rules approach the expiry of captive mines in FY30, securing iron ore has become increasingly crucial for private steelmakers. Tata Steel may see its cost advantage fade and operating margins shrink by 30%-40% as its operating iron ore leases lapse. In contrast, JSW Steel is well-positioned with 24 active leases, far more than its peers like Jindal Steel.
Despite resource pressures in metals, another sector is rising on different drivers. HPCL and BPCL are expected to post stronger-than-expected earnings, driven by improved cooking-gas economics. With low crude prices and fixed gasoline and diesel rates, oil marketers are in a comfortable spot.
India's long-awaited labor reforms may lift consumption, with a minimum wage floor boosting household spending and better working conditions for women. HDFC Bank, Karur Vysya Bank, and Five-Star Business Finance may benefit from these reforms. Easing compliance burdens should also help small businesses expand.
Despite some improvement in investor sentiment, foreign outflows have reached $17 billion this year, matching the 2022 record. Brokerages are still seeing a drop in daily orders, and the Indian rupee is under pressure due to climbing bond yields. The Indian market will be watching the trade deal with Washington and the global economy closely.
Download the TradeKaizen app to practice F&O trading with real-time market data anytime, anywhere.
Get it on Google PlayConnect with fellow traders, share strategies, and improve your trading skills in our Telegram group.
Join Telegram