Bloodbath on D-street as hot money races to China

Top of the Morning

Welcome to Top of the Morning by Mint, your weekday newscast that brings you five major stories from the world of business. It's Friday, October 4, 2024. My name is Nelson John. Let's get started.

The festive season usually brings a buzz to India's stock markets, but this year it's been anything but cheerful. Over July and August, investors saw their wealth shrink by a whopping Rs 11 trillion due to a record exodus of foreign investors, a bounce in Chinese stocks, and brewing tensions in the Middle East – not to mention steep valuations of Indian stocks. Here's the kicker: all this drama synced up with the weekly Nifty expiry on Thursday, known for causing wild swings, so the Nifty and Sensex dropped more than 2%. This was the steepest in two months, driven by a record single-day sale of shares worth more than 15,000 crore rupees by foreign institutional investors. While domestic institutional investors did step up with purchases worth nearly 13,000 crore, it wasn't enough to prevent the dip. Catch Ram Sahgal’s report chronicling the bloodbath on D-street in the show notes.

Direct-to-consumer fem-tech startups are gaining traction in India. This trend is driven by increased female employment, higher disposable incomes, and savvy social media marketing. Sowmya Ramasubramanian and Suneera Tandon write that despite capturing less than 10% of the market, these startups are already worrying major players. There are obvious challenges, such as cultural stigmas and affordability, especially in rural areas. However, the sector has seen modest investments so far.

It's placement season for engineering colleges. Last year was rough, with many companies backing out as they faced financial crunches. Devina Sengupta reports this year looks much the same, unfortunately, with recruiters staying cautious. Global economic uncertainties, including wars, inflation, and the US presidential election's potential impact on offshoring policies are to blame. Devina explains how colleges are responding to this problem, and the salaries graduates can expect in such a job market.

Japan's Mitsubishi UFJ Financial Group has ended up as the sole candidate to pick up a majority stake in Yes Bank, after other potential buyers Sumitomo Mitsui Banking Corp. and Emirates NBD backed out due to India’s strict caps on voting rights, Anirudh Laskar and Gopika Gopakumar report. MUFG sees big potential in India's financial sector and has begun conducting due diligence with help from JP Morgan. The road hasn’t been smooth, though. Yes Bank has been looking for a new owner for more than six months, but India's rules limiting voting rights in private banks to 26% have turned many away. Despite the restrictions, MUFG is exploring ways to buy more than 26% of Yes Bank.

India's goods exports have grown marginally in the first five months of the fiscal year, rising only 1.1% year-on-year. The post-covid surge in goods exports appears to have subsided. But, the real story is the boom in services exports, which shot up by about 11% during the same period. In August alone, services exports jumped to $30.7 billion, inching closer to goods exports at $34.7 billion. If this trend holds, services could outpace goods exports soon, marking a major shift that’s been brewing for over two decades. Our partners at HowIndiaLives.com delve deeper into the changing landscape of Indian exports. A decade ago, services exports were just a third of India’s total exports, but this July they accounted for 47%. Since 1993, services exports have grown by an average of 14% a year, outpacing the 10.7% annual growth rate of goods exports. India is now the world’s 7th-largest services exporter, up from 24th in 2001.

Show notes:

Bloodbath on D-street as hot money races to China

Menstrual hygiene products are stuck in time. These startups want to change that

IIT hiring: Will it be a rocky one for the batch of ‘25?

MUFG: Last man standing in Yes Bank sale

The silver lining in India’s exports basket