Wall Street indices tumbled on Monday after most of the technology stocks came under pressure. The fear factor was after they expected rate hikes to kick in quicker and at a faster rate. Most of the FAANG stocks like Apple, Amazon, Microsoft, Facebook and Tesla fell between 2.1% and 4.4% on Monday. The fall was also visible in the banks and consumer discretionary stocks. Most traders have ramped up their rate hike expectations after Fed minutes were announced last week. US bond yields scaled up to 1.80%.
The latest flow data announced by AMFI showed that flows into equity mutual funds doubled to Rs.25,077 crore in Dec-21, with SIPs recording inflows of over Rs.11,300 crore; an all-time record. There were robust flows into multi-caps thanks to a slew of multi-cap NFOs during the month. However, debt funds saw net outflows of over Rs.49,000 crore largely due to year end treasury considerations. Apart from the active equity schemes, even index funds and index ETFs attracted good interest. AUM touched Rs.37.72 trillion.
The NSE has secured approval from SEBI for the proposed launch of futures and options on the Nifty Mid-Cap Select Index which will go live on 24th of January. The Nifty Mid-Cap Select index is a focused portfolio of 25 stocks within the Nifty Midcap 150 index. The weightage of the stocks is based on the regular free-float market cap methodology. NSE will offer F&O with a trading cycle of 7 weekly expiration contracts excluding the monthly expiration contract. There will also be 3 serial monthly expiration contracts on it.
In a significant recovery for the stock market value on the Bombay Stock Exchange, the market cap crossed Rs.274.73 trillion. It had last touched this level on 18-October. The interesting part is that the Nifty and the Sensex are trading nearly 3% below their historic highs so there is a lot of support from non-index stocks and the slew of fresh IPOs that have hit the market. In fact, after touching a peak on 19-October, Nifty and Sensex corrected nearly 10%, before recouping losses. Both indices gained 7.6% from the lows.
Five Star Business Finance and Waaree Energies got SEBI approval for their DRHPs filed over a couple of months ago. While Five Star Business Finance is an NBFC, Waree Energies is a solar energy company. SEBI has given its observations on both the IPOs, which is tantamount to IPO approval. Five Star is backed by TPG, Matrix, Norwest, Sequoia and KKR and the IPO size is Rs.2,752 crore via OFS. Waree Energies is raising Rs.1,350 crore via fresh issue plus an OFS of 40.07 lakh shares. Waree will set up 2 GW solar cell facility.
Course5 Intelligence Ltd, a data intelligence company, filed DRHP with SEBI for its proposed Rs.600 crore IPO. The IPO comprises of a fresh issue of Rs.300 crore and an OFS of Rs.300 crore. The company is also likely to consider a pre-IPO placement of Rs.60 crore, in which case the IPO size will be commensurately reduced. The fresh issue will be used for funding the inorganic growth initiatives, working capital needs and to support its IP initiatives. Course5 relies on AI, analytics and insights to drive digital transformation.
As Macquarie was back to downgrading Paytm target further to Rs.900, Paytm reported stellar top line cues for the Dec-21 quarter. Paytm posted 300% jump in loan disbursals from its platform in Q3. The total loans disbursed stood at Rs.2,180 crore. The gross merchandise value or GMV of Paytm more than doubled to Rs.250,000 crore in the Dec-21 quarter. The all-important metrics of monthly transacting users or MTUs showed a highly consistent 37% growth on a yoy basis at 64.4 million. Paytm closed 6% lower.
Goldman expects the Fed to raise interest rates 4 times in 2022, an estimate that did not go down well with the markets across the world. Drawing from the cues of the Fed and the strong labour market conditions, Goldman Sachs is pencilling in up to 4 rate hikes in the year. It also expects the first rate hike to start as early as Mar-22, immediately after the taper is completed. Goldman also pegged that the Fed would make rapid moves to cut down on its $9 trillion balance sheet. Jobless rate is now well below 4%.