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Bullish outlook in PSU stocks

Even as shares of public sector companies (PSUs) have fallen sharply in the past few days, analysts at Jefferies maintain a bullish outlook on the segment. In a recent note, he said that State Bank of India, Coal India and NTPC are hot favorite stocks in this sector. In the last 12 months, the PSU index has outperformed the Nifty-50 by more than 70 percent. This increase comes after a decade of poor performance before 2020. The recent upbeat performance, before a sharp decline over the past few sessions, was driven by rising earnings per share and improving return on equity. Despite the strong performance, the PSU index has a PE ratio of 12.2 times, representing a 40 percent discount to the Nifty. The multiples of PSU banks, power-coal utilities and select oil and infra companies were very high between 2006-12. A few years ago, the return on equity of PSUs decreased from 14-15 percent to 4-6 percent.

Bike taxi business will be legalized

The government has tried to legalize the bike taxi business. Under this, the Center has clarified the definition of bike taxi by issuing an advisory notification to the state governments. The Ministry of Road Transport and Highways issued this notification, titled - 'Motorcycles come within the definition of contract vehicles' under Section 2(7) of the Motor Vehicles Act, 1988. The move aims to allow motorcycles to be legally operated as contract vehicles in the country. This will provide new transportation options and also create income opportunities for people. It is clarified that as per Section 2 (28) of the Motor Vehicles Act, vehicles which do not have four wheels and the engine of which is more than 25 cc, are also included in the category of motor vehicles. In such a case, the motorcycle will also come under the ambit of Section 2(7) of the Act. Experts say the central government's notification clarifies the legal status of bike taxis. In such a situation, states have to revise the procedure and guidelines for inclusion of motorcycle permit in taxis.

Finance Commission will carry out analytical work

The first meeting of the 16th Finance Commission was held recently. A statement said that the 16th Finance Commission will undertake detailed analytical work and leverage the expertise of leading research institutes, leading think tanks and other institutions working on monetary-federal relations. The distribution of net tax revenue between the Center and the States and the sharing of shares in such revenue between the States under Chapter I, Part 12 of the Constitution are covered in terms of reference approved by the Cabinet. Another area of ​​work relates to the principles governing the amount paid to the States by way of revenue grant-in-aid to the States from the Consolidated Fund of India and their revenue in grant-in-aid. As per the terms of reference, the finance commission will also suggest necessary measures to augment the consolidated funds of the state to supplement the resources of the panchayats and municipalities.

Increase in demand for luxury houses

There has been a surge in the sale of luxury homes in the country. People with higher financial status are now showing more interest in buying luxury residential units. This is the reason that last year in seven major cities of the country Rs. There was a massive 75 percent increase in the sale of houses priced at Rs 4 crore or more. According to this, among the seven major cities, Delhi-NCR saw the fastest growth with sales of luxury homes almost tripling here. According to the report, 12,935 houses priced at Rs 4 crore or more were sold in calendar year 2023, compared to 7,395 units in 2022. In this way, a huge jump of 75 percent was seen in the sale of luxury houses. Luxury home sales in Delhi-NCR are expected to rise to 5,530 units in 2023 from 1,860 units a year ago.

A fall in the prices of food and manufactured goods

Inflation based on the wholesale price index in India fell to a three-month low of 0.27 percent in January compared to the same period last year. Figures released by the Ministry of Commerce and Industry show that this is due to a fall in prices of food items and manufactured goods. Earlier, the wholesale inflation rate in December 2023 was 0.73 percent. This is the third consecutive month that wholesale inflation has been positive, while deflation has been in place for most months of fiscal 2024. Food inflation was at a three-month low of 6.85 percent in January, down from 9.38 percent in December. During this period paddy (9.56 percent), coarse grains (4.07 percent), pulses (16.06 percent), vegetables (19.71 percent), onions (29.18 percent), fruits (1.01 percent ) and milk (5.38 percent) has decreased.

Current account deficit is expected to decrease

India's service trade surplus rose 16 percent to a record $44.9 billion in the December quarter of FY2024 compared to the same period last year. This shows the strength of the business in the midst of scientific upheaval. This is likely to reduce the current account deficit for the December quarter. According to Reserve Bank data, exports of services rose 5.2 percent to $87.7 billion in the December quarter, while imports of services fell 4.3 percent to $42.8 billion during the period. India's current account deficit has narrowed to 1 percent of GDP during the first half of FY2024 (April-September) compared to the corresponding period of the previous fiscal year 2023.

Demand for Indian Basmati rice abroad

Demand for Indian basmati rice is increasing abroad. Due to which the export of basmati rice has increased. Indian non-basmati rice is also in demand abroad. But to control the price of rice in the domestic market, the central government has banned the export of some non-basmati rice to discourage its export. Due to which a big decrease in its exports is being seen in the current financial year. According to the data received from the Agricultural and Processed Food Products Export Development Authority, 35.43 lakh tonnes of basmati rice were exported during the April-December period of 2023-24, which is 10.78 lakh tonnes more than 31.98 lakh tonnes. The percentage of Basmati rice exported is higher than in the previous same period. Meanwhile, the government raised the minimum export price on this rice, slowing its export growth rate. But after lowering the minimum export price, exports have started picking up momentum. Exports of non-basmati rice are declining due to export restrictions. 83.42 lakh tonnes of non-basmati rice was exported during the April-December period of 2023-24, as against 131.75 lakh tonnes in the same period of the previous year.