The Market Podcast | Tech Mahindra buyback, PSB recap dominated market this week

Welcome to Moneycontrol’s Market Podcast, the weekly wrap that will tell you what transpired in the market. 

How was the market action?

Benchmarks were flat, with Sensex up 0.2 percent and Nifty up 0.6 percent. The broader market did slightly better with midcaps up 2 percent. High beta shares such as metals and real estate performed well. 

Among top performers, Vedanta rose after the SC lifted the ban on smelting at Vedanta's Tuticorin plant. Other outperformers were ONGC, IOC, Tata Motors.

What were the top business stories this week?

Tech Mahindra announced a Rs 2,000 crore buyback, at a 16 percent premium to its market price. 

The government announced a Rs 48,000-crore bank recap into 12 public sector banks, with the largest chunk of money flowing into Allahabad Bank and Corporation Bank. 

This will help PSBs meet capital requirement norms, reduce their NPAs and help them exit the Reserve Bank of India’s stringent PCA framework. With the latest round, the government has so far pumped Rs 1.89 lakh crore into PSBs, since it announced the recapitalisation plan in October 2017. 

The RBI said decided to transfer an interim dividend of Rs 28,000 crore to the government in the current financial year. The dividend transfer will help the Centre meet its revised fiscal deficit target of 3.4 percent of GDP for FY19. This is the second successive year that the RBI will transfer an interim surplus to the Centre. Usually, the central bank, which follows a July-June calendar, transfers dividend after closing its accounts in August

Then there was the Supreme Court hearing in Reliance Communications case, in which the Apex Court said the company was guilty of deliberately not paying Ericsson. RCom owes Ericsson Rs 453 crore, and in a dramatic ruling, the court said it would send RCom’s officials, including ADAG Group Chairman Anil Ambani, to three months in jail if the amount is cleared in 4 weeks. 

What are we tracking week?

India is expected to declare its Q3 GDP data, with growth expected to slow to 6.9 percent, compared to 7.1 percent last quarter. 

We will see the December fiscal deficit data being released -- which is expected to fall to Rs 7.01 lakh crore from Rs 7.16 lakh crore. The government has said it expects to close the fiscal year at Rs 6.34 lakh crore, and it will be interesting to see how it achieves this.

Anything interesting you read this week? 

So ABC News is doing a six-part podcast on Theranos called ‘The Dropout’. Theranos was a much-hyped blood-testing startup that was touted by investors as a revolutionary company, and which attracted a peak valuation of $10 billion.

The podcast traces the story of its high-flying CEO Elizabeth Holmes, and how she managed to hoodwink investors and the media, and how she eventually bit the dust. 

It makes for good listening for both investors as well as anyone interested in the medical industry.