Here are the top headlines:
1. SEBI’s multi-cap rejig move DECODED by top market voices; Big boost for small-cap & mid-cap stocks?
-Top market voices decode SEBI’s rejig move. The market regulator SEBI has tweaked the asset allocation framework for multi-cap funds. The minimum amount to be parked by the funds in the equity corpus is of 75% which includes 25% each in small-cap, mid-cap and large-cap companies. Funds must ensure this compliance by January 2021.
Market veteran Madhu Kela says, multi-cap rejig is going to be a big structural move. He decodes the rejig. Rules for small-cap, mid-cap and large-cap were defined but not for multi-cap. This move has sparked investments by multi-cap companies in large-cap companies. It was also re-rate the small-cap and mid-cap companies.
Sunil Singhania of Abakkus Asset Management and A Bala Subramanian of Aditya Birla Sun Life CMC believe that this rejig will make mid-cap categories true to its label.
2. India’s IIP declines by 10.4% in July; Moody’s predict 11.5% contraction in economic growth
-The markets react to the macro-economic numbers that came in last evening. IIP numbers decline by 10.4% in July as compared to the sharper contraction of 16% in the previous month. In the manufacturing sector, production has seen a decline of about 11.1%. The contraction in various sectors such as manufacturing, mining and energy sector is due to lower output.
The contraction in the mining sector was that of about 13%. There has also been a dip in the economic activity for the 5th consecutive month. Moody’s has predicted an 11.5% contraction in India’s economic growth in the current fiscal owing to the current coronavirus pandemic.
3. Wall Street: Tech Stocks slip; Nasdaq’s worst week since March
-Action on Wall Street continues. Sell off on tech stocks take place on Wall Street overnight. Tech stocks are seen to slip. Heavyweights such as Amazon, Apple, Microsoft all ended in the red. This has pulled the Nasdaq to its’ worst week since March. Nasdaq has been pulled lower than usual.
On the other hand, S&P and Dow Jones continue to remain in the green following these results. The heavyweights resulted in pulling the Nasdaq lower than its’ usual numbers. This also marked the worst week for Nasdaq since March.
4. Mega Congress shakeup: Ghulam Nabi Azad, Motilal Vora & more lose their posts
-The mega Congress shakeup continues. Congress veteran leader Ghulam Nabi Azad has lost his post as the general secretary. Motilal Vora, Ambika Soni and Mallikarjun Kharge as well have been removed as secretaries of the parties. Ghulam Nabi Azad was the most prominent of the dissent letter writers questioning the leadership at the top. The old guards have now exited the AICC. This removal of major leaders and secretaries has caused a major shakeup in the Congress Party. Various important and prominent leaders have lost their post as general secretary in the AICC.
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