Stock Markets Hit 75000, Driven By Strong Undertone

On Episode 265 of The Core Report, financial journalist Govindraj Ethiraj talks to aviation expert Kapil Kaul, CEO of CAPA India.


Our Top Reports For Today

  • (00:00) Stories Of The Day
  • (01:00) Stock Markets Hit 75000, Driven By Strong Undertone, Investors Could Book More Profits
  • (03:06) Normal Monsoon Ahead, Private Weather Forecaster Skymet Says
  • (04:28) Have Capital, Will Go To The Moon. How Indian Companies Planned Clueless Global Forays In The Venture Boom And Are Now Pulling Back
  • (07:08) Record Air Passenger Traffic Expected This Summer, How Is The Industry Gearing Up?
  • (17:01) March Was The Warmest Month On Record


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.

Markets Hit 75000

It was a strong undertone in the stock markets though it closed lower eventually, The markets are likely to see more rounds of profit booking even if fresh fund supply continues to support or push up prices.

Mature investors are always on an edge when the stock markets rise in the manner they have but more so when they hit landmarks like the one in yesterday’s trade.

 The S&P BSE Sensex, surpassed the 75,000-mark for the first time on Tuesday to hit a record high of 75,124 before closing 59 points lower from Monday  at 74,684. 

The Nifty50, too, closed 24 points lower at 22,643, after hitting an all-time high of 22,768 earlier today.

The BSE MidCap and SmallCap indices, too, ended in the red with up to 0.47 percent decline.

To understand how fast the Sensex is moving, consider this. It has risen 1,000 points in just a month, having touched 74,000 points on March 6.

Investments have been flowing in from both domestic and global investors who in turn have returned to Indian equities with a fervour not seen since the second half of last year.

The triggers include stronger than expected corporate earnings including of companies and in sectors we have been talking about.

There is also a feeling of a stepped up pre-election rally though the markets largely have priced in a victory for the current regime.

Interestingly, many brokerages are also saying that overall corporate growth for Q4, year on year, for Nifty50 companies will be slow. 

Business Standard reports quoting various brokerage estimates, the companies’ combined net profits are expected to grow 3.1 per cent year-on-year (Y-o-Y) in Q4FY24, the slowest in the last five quarters. 

For comparison, the index companies’ combined net profits were up 8.2 per cent Y-o-Y in Q3FY24 and 3.4 per cent Y-o-Y in Q4FY23. 

Normal Monsoons In 2024

After an erratic monsoon in 2023 which has led to, among other things, lower reservoir levels and water shortages in many parts of the country, India is expected to see a normal monsoon in 2024, private weather forecasting agency Skymet said on Tuesday.

India’s monsoons usually run from June-September.

Monsoon rains are expected to be 102% of the long-period average of 868.6 mm for the four-month period, Skymet said and Reuters reported.

While Skymet is a prominent voice in forecasts, many analysts and economists I have spoken to in the past usually wait for the forecast  from the Government’s Indian Meteorological Department whose pronouncement should come soon.

The Indian Meteorological Department has meanwhile predicted that in the April-June period, various parts of the country could record 10-20 heat wave days compared to the normal four to eight days.

“El Nino is swiftly flipping over to La Nina. And, monsoon circulation tends to be stronger during La Nina years,” Jatin Singh, managing director, Skymet, said in a statement.

The weather forecaster expects “sufficiently good rains” in southern, western and north-western parts of the country.

Have Capital, Will Go To Moon

In the 2000s, it was the fashion to go overseas. Many Indian business groups empowered by a strong rupee and unsure domestic markets ventured overseas.

Groups like the Tatas went on an acquisition spree, buying Jaguar Land Rover in the UK in 2008, and Tetley Tea in the UK a few years earlier in 2000 or Birla’s Hindalco’s $6 billion acquisition of aluminium major Novelis in 2007.

As the 2000s passed, it appeared that the domestic market was the place to be and companies swung back their focus and their investments.

Those bets have largely paid off as is quite evident.

Many venture funded startups on the other hand, started launching overseas in moves which were driven by their investors and of course free flowing capital.

The moves did not sound logical then or now.

Why would a company that has barely got its grip on the promising Indian market already start announcing a rash of new investments in overseas markets.

Of course, none of these companies got a grip on the Indian market and were bleeding heavily and perhaps continue to do so, those that are still around.

There is of course the dream that if Uber went from San Francisco to all over the world, the reverse must also work, from India to elsewhere.

Well, not quite.

In one example of this, ride-hailing company Ola said it has “reassessed priorities” and has decided to shutter its overseas ride-hailing business altogether from three international markets, viz., the UK, Australia and New Zealand, by the end of this month, to concentrate on the domestic market.

The company told NDTV Profit they have discovered that the future of mobility is electric—not just in personal mobility but also for the ride-hailing business, and there is immense opportunity for expansion in India.

The company or business is not so important as is the strategic blunder of equating a venture funded balloon in India to imagine that there were other markets to be had for the picking.

The example of the 2000s of Indian companies going overseas however has had mixed impact. Many companies have digested their acquisitions well, while in some cases they have not.

Some businesses in steel run by groups like Tatas and Arcelor Mittal have been plagued with various issues, including costs, environment and union tussles, including leading to shut downs.

However, more broadly, the market for these products have continued to exist or grow. And of course the acquisitions were not funded with reckless venture capital.

It’s Going To Be A Crazy Summer for Aviation

​​The global airline industry is facing a summer squeeze, with travel demand expected to surpass pre-pandemic levels while aircraft deliveries drop sharply due to production problems at Boeing  and Airbus .

Air carriers are spending billions on repairs to keep flying older, less fuel-efficient jets, and paying a premium to secure aircraft from lessors. But some carriers are still being forced to trim their schedules to cope with the lack of available planes. 

At the same time, the number of travellers globally is set to hit historic levels, with 4.7 billion people expected to travel in 2024 compared with 4.5 billion in 2019.

The Indian aviation industry has also been in the grip of frenzied growth, evidenced by flare ups like cascading delays seen in December last year and on a slightly different note, the pilot crisis in Vistara Airlines which led to a spate of cancellations week before last.

Vistara is now saying they will reduce flights by 10% to adjust for the shortage of pilots which means it could go from 300 flights daily to around 270 flights.

Other airlines seem fine for now but this is going to be a busy summer to put it mildly. I reached out to leading aviation expert Kapil Kaul, CEO of CAPA Aviation and began by asking him how he was seeing overall supply in infrastructure in the coming season and his outlook for the year ahead.


March Is The Warmest On Record

The world just experienced its warmest March on record, capping a 10-month streak in which every month set a new temperature record, the European Union’s climate change monitoring service said on Tuesday.

Each of the last 10 months ranked as the world’s hottest on record, compared with the corresponding month in previous years, the EU’s Copernicus Climate Change Service (C3S) said in a monthly bulletin, reported by Reuters.

The 12 months ending with March also ranked as the planet’s hottest ever recorded 12-month period, C3S said.

C3S’ dataset goes back to 1940, which the scientists cross-checked with other data to confirm that last month was the hottest March since the pre-industrial period.

Already, 2023 was the planet’s hottest year in global records going back to 1850.

Extreme weather and exceptional temperatures have wreaked havoc this year.

Climate change-driven drought in the Amazon rainforest region unleashed a record number of wildfires in Venezuela from January-March, while drought in Southern Africa has wiped out crops and left millions of people facing hunger.

Marine scientists also warned last month a mass coral bleaching event is likely unfolding in the Southern Hemisphere, driven by warming waters, and could be the worst in the planet’s history.

The primary cause of the exceptional heat were human-caused greenhouse gas emissions, C3S said. Other factors pushing up temperatures include El Nino, the weather pattern that warms the surface waters in the eastern Pacific Ocean.

But despite El Nino easing in March, the world’s average sea surface temperature hit a record high, for any month on record, and marine air temperatures remained unusually high, C3S said.

Meanwhile, Bloomberg is reporting that India is ramping up coal use after recording a sharp decline in hydropower output, as it braces for rising power demand and potential blackouts during the hot season ahead of the polls this month.

Coal’s share in power output rose to 77% in the first week of April, about two percentage points higher than a year earlier, according to data from the Grid Controller of India Ltd., making up for shortfalls in hydropower output.

Poor rainfall is affecting hydroelectricity production, with March output falling 11% from last year.

And finally, Delhi’s power distribution companies have said they are predicting Delhi’s power demand would cross 8 GW this year during summer.

After hitting a record power demand of 7,695 MW in 2022, Delhi’s peak power demand during the summers of 2024 may cross 8 GW for the first time, reaching up to 8.2 GW. Last year, Delhi’s peak power demand had clocked 7.4 GW,” the discoms said. 

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