(Bloomberg) -- Before the trading day starts we bring you a digest of the key news and events that are likely to move markets.

Good morning, this is Ashutosh, an equities reporter in Mumbai. Nifty futures indicate another strong session ahead for stocks, driven by strong global market sentiment and US Fed rate cut buzz. The risk on mood persists, with the exuberance that lifted the Sensex past the 80,000 milestone for the first time yesterday showing no signs of abating. 

Banks are the only value buys in India’s peaking market

The recent rally in India has been driven by banking stocks, particularly private lenders like HDFC Bank. Historically, the private lenders have enjoyed a premium over state-run peers due to stronger earnings and market share gains. Despite recent improvements in state-run banks’ performance, analysts at Motilal Oswal remain bullish on private lenders trading tad below their 10-year average on price-to-book basis and continue to be attractive picks. 

Heatwaves and capex plans propel power sector stocks

Power sector stocks have been lighting up the Indian market all year. With demand surging due to a tepid monsoon and heatwaves, fundamentals support the rally’s continuation. Berstein endorsed financiers REC and Power Finance Corp. for further gains on Wednesday. A Reuters report that the government wants power generators to accelerate capex should also boost equipment producers like Bharat Heavy Electricals and Kirloskar Pneumatic.

Longest streak of overseas inflows into local debt since 2022

Indian debt is posed for its 13th straight day of inflows from foreign investors, marking the longest streak of purchases since the end of 2022. But inflows have been steady rather than overwhelming, my colleague Ronojoy Mazumdar points out. Investors are concerned that a victory for former President Donald Trump in November could cause Treasury yields to rise sharply, diminishing interest in emerging markets.

Analysts actions:

  • CE Info Systems Rated New Buy at William O’Neil
  • Dalmia Bharat Raised to Add at Axis Capital Limited
  • Dabur India Cut to Neutral at JPMorgan; PT 580 rupees
  • Indegene Rated New Sell at Citi
  • TVS Supply Chain Rated New Buy at Ashika Stock Broking

Three great reads from Bloomberg today:

  • Modi’s Budget to Send India’s Soaring Stocks Higher, Survey Says
  • Adani Inquiry Takes a Wrong Turn to Rich Banker: Andy Mukherjee
  • Global Markets on Alert for Biden Exit as Trump-Win Trades Mount

And, finally..

The relentless run in Indian equities appears to be stretched. The market value has exceeded $5 trillion, surpassing the nation’s economy, which was valued at $3.5 trillion at the end of December. That means investors are paying $1.42 for every dollar of economic output. While this measure is elevated, it remains below the peak seen in 2007, which foreshadowed the subsequent slump in local equities during the global financial crisis.

--With assistance from Ronojoy Mazumdar and Chiranjivi Chakraborty.

©2024 Bloomberg L.P.