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The NSE Nifty Next 50 Index is emerging as the hottest stock gauge in India, as investors look for pockets of outperformance in a market that’s been hovering near record highs.Earnings growth is proving to be a key metric. Made up of potential candidates for the benchmark Nifty 50, the gauge has seen its forward profit estimates climb 20% so far this year, far outpacing the 3.5% increase for the larger gauge. The Nifty Next’s biggest components feature industrial and materials firms directly benefiting from an economy expected to grow more than 7% in 2024.“The general trend in the market at the moment for foreign investors, and I would say the more savvy ones, is that they are going beyond the Nifty 50,” said Gary Dugan, chief investment officer at the Global CIO Office. “There’s a lot of GDP in that second band of 50 companies beyond the Nifty,” he added. 109149835An eight-year rally in Indian blue chips has driven up valuations and forced global funds to broaden their search for winners in the $4.6 trillion market. At the same time, the rising attraction of equities in China and elsewhere puts more pressure on local firms to deliver growth in earnings and return on investment.The Next 50 measure is expected to deliver earnings growth of 39% over the coming year, according to estimates compiled by Bloomberg. That’s likely to help extend its 65% rally seen over the past year despite the challenges facing the broader market. The gauge just notched its best quarter since 2009 versus the larger benchmark NSE Nifty 50 Index.Global funds have increased allocations to some of the index’s biggest stocks, including communication equipment maker Bharat Electronics Ltd., defense firm Hindustan Aeronautics Ltd. and Canara Bank Ltd., said Rupal Agarwal, Asia quantitative strategist at Sanford C. Bernstein. 109149855While stocks in this second tier gauge are gaining on favorable comparisons with larger peers, they’re also beating out smaller shares. A gauge of Indian small caps has undergone a correction that at one point wiped out more than $80 billion in market value amid concerns on high valuations and the impact of extreme volatility.The Nifty Next “gives foreign investors a good way to participate in the India stories such as manufacturing, railway capex and public sector undertakings without worrying about liquidity,” Bernstein’s Agarwal said.

Mumbai: Indian lenders must play a larger role in global derivatives and work to ensure that smaller retail players do not pay more for access to foreign exchange products, central bank governor Shaktikanta Das said Wednesday, underscoring the need for local banks to reflect the country's rising economic status and emerge as market makers."Participation of domestic banks in derivative markets remains limited with only a small set of active market-makers... Domestic banks are dealing with market-makers in global markets rather than with end clients and are yet to emerge as market makers of note globally," Das said at a conference of fixed income market participants in Barcelona.While ensuring prudence and due diligence, the focus should be on widening participation of Indian players in markets for rupee derivatives, both local and offshore, Das said, pointing to the crucial hedging function that derivatives markets provide to the economy. Observing that liquidity in over the counter (OTC) derivatives markets, especially interest rate derivatives, is largely confined to a few products, Das said that local market players were still to fully utilise new regulatory frameworks and exploit opportunities.Reiterating an issue that the Reserve Bank of India (RBI) has flagged numerous times over the past year, Das said that retail players are yet to receive the same fine pricing that large customers enjoy."Divergence in pricing in FX (foreign exchange) markets for the small and large customers are wider than what can be justified by operational considerations," Das said, adding that lenders may need to do more to facilitate the use of the FX Retail Platform.

Mumbai: Most auto company stocks made fresh highs on Monday in anticipation of strong March quarter results from them. Traders created fresh bullish bets on auto stock futures as the recent outperformance is expected to continue through the current valuations may be reflecting most of the optimism around the share prices.Maruti Suzuki, Mahindra & Mahindra and Eicher Motor gained around 3% each, hitting new highs during the trading session. Battery maker Exide soared 16.8% to new record levels. TVS Motor rose 3.2%."The upmove in most auto stocks is a reaction to the previews of auto players which indicate a good set of results for Q4," said Aditya Welekar, senior research analyst at Axis Securities. "A significant inflation in commodity prices is also not expected in the upcoming quarters."The Nifty Auto index rose 2.16% to record levels on Monday, compared to a 0.68% up-move in benchmark Nifty, which also closed at an all-time high. Out of the 16 stocks in the Nifty Auto Index, 15 advanced and 1 declined."When the broader market was in a corrective phase recently, the auto sector didn't see a price correction and this relative strength of the sector is driving further buying interest," said Ruchit Jain, lead research analyst at 5paisa. "The broader trend in the sector has also been positive in the last few months."In the past month, the auto index has advanced 5.07% while Nifty gained 1.49% in the same period. It has gained 20% in the past three months as against 5.3% gains in the Nifty."A strong build-up of long formation in many auto stocks such as Exide, M&M, Eicher and Maruti Suzuki India is also supporting the bullish momentum in the sector," said Jain. "The relative outperformance of auto is likely to continue since the index is performing well in a rising market."Jain said Exide witnessed breakout with good volume, while Eicher Motors is nearing a fresh breakout. The rally in Maruti Suzuki India and Mahindra & Mahindra is expected to continue. Analysts said that despite high valuations, the auto sector is poised for growth and strong momentum."Although the auto index is already trading at all-time high levels, having crossed 22,000 levels for the first time on Monday, the market expects the index to be at 23,000 in the April series," said Jain.Due to competitive intensity, a large up-move in shares of passenger vehicle makers seem unlikely, said Welekar. Two-wheeler shares could perform better due to pick-up in exports and better valuations, he said. TVS Motor, Bajaj Auto and Maruti Suzuki India are his top picks in the sector."While a consolidation might happen, a correction in the auto sector can be ruled out since the growth drivers for the sector remain robust," said Welekar. "However, the valuations are factoring most of the positives, so a stock specific approach is advised."

Mumbai: Shriram Finance has raised rates on fixed deposits by 5-20 basis points across maturities ranging between 12 and 60 months from April 9. Investors can now earn 7.85% to 8.8% on these deposits.Senior citizens can earn another 50 basis points, while women investors earn an additional 10 basis points, taking the maximum rate to 9.4% for a woman senior citizen.Wealth managers believe given financials of the company, which has emerged as among the biggest non-bank lenders in India, conservative investors eyeing an allocation to debt can consider the fixed deposit.Distributors recommend the fixed deposit of Shriram Finance as the company has a high rating of AA+, strong financials and management. Fixed deposits are simple products, easy to understand for investors and they know what they will earn at the end of the tenure.These products are often popular with retirees who use them to take a monthly income to fund their expenses. Investors also get a chance to earn more in corporate deposits when compared with bank or postal deposits. After the rate increases, a deposit of Shriram Finance will pay up to 8.8% for a tenure between 36 and 60 months.Earlier this month from April 3, Bajaj Finance had increased its deposit rates for senior citizens by upto 60 basis points in the 25-to-35-month tenure and 40 basis points in the 18-to-24-month tenure for senior citizens. Senior citizens can earn up to 8.85% and non-senior citizens can take benefit of rates of up to 8.60%, by booking digitally in the 42 months tenure.A fixed deposit of State Bank of India (SBI) pays 6.75-7% for the same tenure, while a postal deposit pays 7.1-7.5%.