ET NEWS

In the latest edition of ETMarkets Smart Talk, Vikram Kasat, Head Advisory at PL Capital, shares his nuanced take on the current market landscape.Despite a flurry of positive developments — from GST and inflation data to policy support — Kasat believes Indian equities are likely to remain sideways in the near term, as valuation concerns and persistent FII selling weigh on sentiment.He stresses that this is a stock picker’s market, where investors must focus on selective opportunities rather than broad market moves, highlighting sectors like metals, autos, and defence, along with promising new-age listings such as MobiKwik and FirstCry. Edited Excerpts –Kshitij Anand: Let me get your perspective on the markets. We’ve seen quite a roller-coaster ride over the last 12 months. We’ve had highs and lows, but overall, the market seems to have consolidated, giving flattish to slightly negative returns. How are you reading the markets right now?Vikram Kasat: I have a very different view from the consensus on the markets. First of all, everyone seems bullish because of several developments — the GST news, the upcoming income tax announcements, inflation data, rate cuts, and GDP figures. However, my thought process is different.If we look at the MSCI Index, we are almost near recent lows. The bond selling, as highlighted by the Morgan Stanley Composite Index, is also significant. Whenever bond selling happens globally or in a specific country, markets do not rise sharply from there — they experience a jerk. That’s point number one.Point number two, FIIs have been selling consistently. Of course, they’ve been selling for the last five years, but what’s concerning is that even after so much positive news, their selling hasn’t stopped. Every day, they’re selling around ₹3,000–₹3,500 crore in the cash market.In the F&O segment, FIIs are currently about 86–87% short and only 13% long — that’s a big signal. Despite so much good news and even the so-called “bromance” between Trump and Modi, they haven’t reduced their short positions. That’s worth noting.Another major concern is valuations. The valuations are not on the positive side. The last quarter results weren’t very encouraging, and I expect the current quarter’s results to be similar. Valuations could become a key issue. To improve sentiment, we’ll need to see strong announcements around corporate or government capex.Although the GST announcement was positive, its September 22 implementation date meant nearly half a month or more of limited activity. So, I believe we should wait for this quarter’s results before jumping into the markets. For now, I expect a sideways market — more of a stock-picking market going forward.Kshitij Anand: Let me also get your view on geopolitics. We’re seeing a series of tariff announcements — first 25%, then an additional 25%. There’s also the H-1B visa issue. Meanwhile, some central banks are hiking rates, others are cutting. The Bank of Japan and the US Federal Reserve have reduced rates, and the Reserve Bank of India has already cut 100 bps in the CRR. Economists expect another CRR cut to support growth. How are you reading the geopolitical situation right now?Vikram Kasat: To put it briefly, it’s a new world in disorder right now. The erratic trade policy from the American administration is one of the reasons for India’s underperformance.It all started when Trump launched the trade war with China in 2018 — marking the dismantling of 80 years of globalization and free trade. A few years later, global companies began shifting manufacturing from China to India, giving rise to the “China Plus One” trend. For instance, all iPhones for the US market are now being manufactured by Foxconn in India.As recently as April this year, Modi and Trump met on good terms in Washington. India lowered import tariffs for American autos, and Modi also agreed to buy more defense equipment from the US. But now, relations between the US and India seem frozen. Recently, we were hit with 50% tariffs on exports to the US as punishment for buying oil from Russia.China, on the other hand, was given another 90 days to negotiate a trade deal with Trump — a privilege India didn’t receive. The main reason was China’s leverage over rare earth metals. Despite past disputes, Modi is now fostering warmer relations with China. China recently celebrated 80 years of victory over Japan, and Modi was among the guests.India is increasingly open to more trade with China, as it depends on China for raw materials, components for several industries, and access to rare earth metals. The Beijing summit, attended by Xi Jinping, Modi, Putin, and several leaders from the Global South, indicates the emergence of a new world order — one that doesn’t include America or Donald Trump.In my view, Trump’s trade policy has only managed to unite much of the world against him.Kshitij Anand: Coming to Indian markets, let me get your perspective on the sectors that look attractive and where you are currently focusing, because we have seen quite a bit of ups and downs—especially with GST coming in. We’ve seen one sector get all the limelight at different times, whether it’s autos or consumption picking up. How are you reading into this?Vikram Kasat: Our focus is mostly on new-age stocks, some of which have been recently listed and look really good. Apart from that, we are looking at stocks where the balance sheets may be fractured but the underlying business is strong, and there is some income visibility in the books. These look really attractive. I’ll give you some examples. The charts for most of these stocks look similar, but some of the names include MobiKwik, which I feel could be the next Paytm-type stock. The second is FirstCry—it has a market cap of around ₹20,000 crore and delivers a PBT of about ₹500 crore. There’s no cash burn in FirstCry’s books, so it looks good. I was also referring to Urban, which was recently listed. So, I believe new-age stocks will do really well from here on, and most of these are bottom-picking opportunities.Kshitij Anand: Now that you’re talking about stocks, let’s get your views or ideas from a medium-term perspective—where are you positive?Vikram Kasat: From a medium-term view, I’d say this quarter will be quite tough to make money—that’s point number one. However, there will be some pockets where I believe decent gains can be made. One such pocket would be metals, as I feel the sector could do well from here on, especially with China’s stimulus package expected soon and steel already performing strongly. The second would be autos, and the third would be defence.Kshitij Anand: So, metals, autos, and defence are the three sectors where wealth generation looks possible?Vikram Kasat: 100% possible from here on.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)

Reliance Industries Ltd (RIL) may tower over India’s corporate landscape with the largest market capitalization on the bourses, but when it comes to the Nifty 50, the benchmark index that mirrors India’s stock market pulse, it plays second, or rather, third fiddle. As of September 30, RIL ranked third in index weight at 8.18%, behind HDFC Bank at 12.87% and ICICI Bank at 8.52%. The reason lies not in its valuation, but in what investors can actually trade.The free-float factorThe Nifty 50 doesn’t assign weight based on total market capitalization. Instead, it uses a free-float market capitalization method, which factors in only the shares available for trading by the public. Promoter holdings, government stakes, and other locked-in shares are excluded.RIL’s promoter group, led by the Ambani family, controls roughly half the company’s shares. That means only the remaining portion, the free float, contributes to its index weight.By contrast, both HDFC Bank and ICICI Bank have public shareholding levels above 80%, giving them a far greater representation in the index calculation despite smaller total market caps. In the Nifty’s arithmetic, that translates to more weight, even if the total market value is smaller.This distinction is crucial. As the National Stock Exchange (NSE) explains, the Nifty 50 “is computed using a float-adjusted, market capitalization-weighted methodology, wherein the level of the index reflects the float-adjusted market capitalization of all stocks.” The system, adopted in June 2009, ensures that the index reflects the market’s investable portion rather than sheer corporate scale.Why the math favours banksUnder this framework, HDFC Bank’s free-float advantage gives it the heftiest share of the Nifty at 12.87%, followed by ICICI Bank’s 8.52%. Reliance, despite being India’s most valuable company, comes in third at 8.18%.Infosys and Bharti Airtel round out the top five with weights of 4.6% and 4.53%, respectively.Sector-wise, financial services command the largest share of the index at 36.47%, followed by information technology at 9.91% and oil, gas and consumable fuels at 9.79%, the category where Reliance remains the dominant player.This composition means that banking stocks, with their large free floats and high liquidity, exert a stronger influence on the benchmark’s movements than capital-heavy groups with concentrated ownership structures.Also read | 15 stocks to shop for this Diwali; SBI Securities eyes up to 25% upside. Check listWhat it means for investorsFor investors, this weighting system has real implications. A stock’s weight determines how much its price moves sway the Nifty 50. So while Reliance’s size and influence over India Inc. are undeniable, its relatively lower free float keeps its impact on the index below that of HDFC Bank. A 1% swing in HDFC Bank, for instance, nudges the Nifty far more than a similar move in Reliance.In effect, a company with a smaller market cap but a higher free-float ratio can punch above its weight in index terms. The free-float adjustment makes the index more representative of the market’s investable portion and less skewed toward companies with large but tightly held valuations.On Wednesday, October 8, Reliance shares fell 1.3% to Rs 1,367.3, retreating after a 1.6% gain over the previous two sessions. Even so, RIL remains India’s most valuable company, just not the heaviest stock on the Nifty 50.Also read | Tata Steel shares are up 25% in 2025. Can the rally hold above Rs 175?(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

The world just had its third-hottest September on record, the Copernicus Climate Change Service said on Thursday, as global average temperatures remained stuck near historic highs for yet another month.September did not break the record for the month set in 2023 and was only marginally cooler than the same period last year, said the EU's global warming monitor."The global temperature context remains much the same, with persistently high land and sea surface temperatures reflecting the continuing influence of greenhouse gas accumulation in the atmosphere," said Samantha Burgess, strategic lead for climate at Copernicus.September was 1.47C above the 1850-1900 average used to define the pre-industrial period before human activity began significantly influencing the climate.Such incremental rises may appear small. But scientists say every fraction of a degree of extra warming further destabilises the planet, raising the risk of extreme weather and triggering destructive climate tipping points.Global temperatures have been pushed steadily higher by humanity's emissions of greenhouse gases, primarily from fossil fuels burned on a massive scale since the industrial revolution.Scientists expect that 2025 will be the third-hottest year after 2024 and 2023, with recent months tracking just behind the records set during this extraordinary stretch.Nations face this reality as they gather in Brazil next month for the UN climate negotiations held every year to address the collective response to global warming.Major economies are not cutting emissions fast enough to avoid the worst impacts of climate change, and many are still approving new oil, coal and gas projects. Copernicus uses billions of measurements from satellites, ships, aircraft and weather stations to aid its climate calculations.Its records go back to 1940, but other sources of climate data -- such as ice cores, tree rings and coral skeletons -- allow scientists to expand their conclusions using evidence from much further in the past.Scientists say the current period is likely the warmest the Earth has been for the last 125,000 years.

ET Intelligence Group: Canara Robeco Asset Management Company plans to raise ₹1,326 crore through an offer for sale (OFS). The promoter's stake will decline to 75% after the issue from 100%. The fund house's business is largely equity-driven with equity-oriented schemes accounting for around 92% of its quarterly average assets under management (QAAUM). That makes its earnings sensitive to equity market volatility. The company has the lowest profit after tax margin among peers, which is reflected in its relatively modest IPO valuation. The issue is suitable to long-term investors with a high-risk appetite who can withstand market fluctuations.BusinessEstablished in 1993, Canara Robeco manages 26 mutual fund schemes - 12 equity, 10 debt, and four hybrid. The equity AUM grew by 30.9% annually between FY23 and FY25 to ₹94,757 crore. By equity AUM, the AMC holds the highest share among the top 10 AMCs.As of June 30, 2025, retail and HNI investors accounted for ₹1.01 lakh crore, or 87% of its monthly average AUM. SIP assets formed about 33% of total AUM, well above the industry average of 21%. However, the number of active SIP accounts declined to 21.4 lakh from 23.2 lakh between FY24 and FY25 after new regulations classified inactive accounts (with no transactions for three months) as dormant. The company managed 50.5 lakh folios, of which 99% belonged to individual investors. According to Crisil, SIP AUM in the industry is expected to grow 25-27% annually and equity AUM by 20-21% between FY25 and FY30.124402095FinancialsNet profit more than doubled to ₹191 crore in FY25 from ₹79 crore in FY23, while profit yield improved to 0.18% from 0.14%. However, this remains below 0.19-0.33% for the peers. Revenue rose to ₹404 crore in FY25 from ₹205 crore in FY23. The AMC's QAAUM grew 28.6% annually to ₹1.1 lakh crore during the period. The cost to income ratio improved to 34.2% from 47.7%.ValuationThe IPO is priced at 27.8 times FY25 earnings compared with 48.2 for HDFC AMC and 43.3 for Nippon Life India AMC but higher than 24.6 for Aditya Birla Sun Life AMC and 22.8 for UTI AMC.

New Delhi: A widely forecast crude oil price plunge in 2026 could spell a bonanza for the government, presenting an opportunity to raise fuel taxes for a vital revenue boost after income tax and goods and services tax (GST) cuts or, if it allows state-run oil firms to lower pump prices, sharply curb inflation, said experts.The US Energy Information Administration has projected an average price of $52 a barrel for Brent next year, down from the current $66, average price of $71 so far in 2025 and $80 recorded in 2024. Since 2004, the global benchmark for crude oil prices has averaged $52 or lower only twice — in 2015 and 2020. Wall Street banks Goldman Sachs and JP Morgan see Brent at $56 and $58, respectively, in 2026.For India, which spent $158 billion on crude imports in 2022-23, the relief is already significant: the April-August import bill was down 17% year-on-year to $50 billion. Likely Higher Fuel TaxesIf forecasts hold, refiners’ margins will swell, forex savings will balloon, the trade deficit will narrow, inflation will soften, gross domestic product (GDP) growth will get a boost and, most importantly, the government could see a massive revenue increase by raising fuel taxes.The government is unlikely to rush to provide pump price relief, preferring first to gauge the impact of recent income tax and GST cuts on revenue, according to Sunil Kumar Sinha, professor of economics at the Institute for Development and Communication, Chandigarh. 124399582“This government is far more sensitive to the fiscal correction roadmap than (those) in the past,” he said.The government believes fiscal credibility carries weight with foreign investors, he added, noting India’s recent S&P credit rating upgrade.Lower oil prices would also support Prime Minister Narendra Modi’s capital expenditure and welfare agenda through his third term, said industry executives.“Oil has been Modi’s great ally,” said one executive, pointing to the price collapse that began in June 2014 soon after Modi first became PM and enabled oil-sector reforms and sharp tax increases that funded government programmes.Crude prices halved within a year of Modi assuming charge.Brent has averaged $69 a barrel during Modi’s years at the helm, compared with $83 during his predecessor Manmohan Singh’s decade.Much of the benefit has gone to the exchequer: petroleum’s contribution to the Centre surged to Rs 4.92 lakh crore (23% of revenue) in 2021-22 from Rs 1.53 lakh crore in 2013-14, before easing to Rs 4.15 lakh crore (13%) in 2024-25.Revenue rose as fuel taxes soared before moderating after the onset of the full-scale Russia-Ukraine war in February 2022.With diesel and kerosene subsidies eliminated and LPG support sharply cut, fuel subsidies fell to 0.04% of GDP in 2024-25 from 1.75% in 2013-14.Yet pump prices remain far higher than they were a decade ago.In Delhi, petrol retails at Rs 94.77 per litre, up from Rs 71.41 in May 2014; diesel is at Rs 87.67, versus Rs 56.71 then. This is the case even as Brent has fallen to $66 per barrel from $109 in May 2014.In recent years, consumer relief has usually aligned with the election calendar.With key state polls in West Bengal, Assam, Tamil Nadu and Kerala due in 2026, some of the gains may reach voters, experts said.“If crude prices fall so much, we can expect some consumer relief — although it will depend on fiscal priorities,” said DK Joshi, chief economist at CRISIL.Pump prices have been frozen for nearly three years, a sharp reversal from the early Modi-era deregulation that allowed daily revisions in line with global fuel prices.