BQuick On Dec. 31: Top 10 Stories In Under 10 Minutes

This is a roundup of the day’s top stories in brief.

1. Light At The End Of The Tunnel?

The Reserve Bank of India expects bad loans in the system to fall by March, suggesting that the stress Indian lenders have been facing will start to ease after three years.

• The gross non-performing ratio of Indian banking system will drop to 10.3 percent by March, according to the central bank’s latest Financial Stability Report.
• That compares with 10.8 percent in September.
• The estimate is based on a baseline scenario which assumes that the current economic situation will continue.
• To be sure, the RBI in its last installment of the report in July had estimated the gross bad loans to rise to 12.9 percent by March.

RBI noted that the overall asset quality performance has improved.

2. Modi Mulls Three Options

Prime Minister Narendra Modi is studying three options, including a cash handout for farmers, people with knowledge of the matter told Bloomberg News, as his administration seeks to ease an agrarian distress and shore up popular support ahead of next year’s general election.

• The government is weighing options including a monthly income support program for farmers, a cash handout plan for the shortfall between the actual sale price and state-set procurement rate and a revamped crop insurance program, people familiar with the matter said, asking not to be identified as they aren’t authorized to speak to the media.
• The final program could be one of these or a combination of all three.
• The plan for the handout comes soon after the ruling Bharatiya Janata Party was voted out in key state elections this month, forcing Modi to draw up a course correction before federal polls due by May.

Another alternative being considered is a revamp of the crop insurance program.

3. Where Will Nifty Go In 2019?

The outcome of the next general election, crude prices and the trade war are among the biggest factors that will decide the trajectory of Indian equities in 2019, according to BloombergQuint’s poll of market participants.

• Depending on how these pan out, the majority of 27 respondents polled are conservative in their predictions for the Nifty 50 Index.
• Analysts have cited uncertainty about Prime Minister Narendra Modi winning a second term, more so after his Bharatiya Janata Party lost the key heartland states to the Congress, as a key risk for equities next year.
• Trump’s trade war with China and crude prices, and as a result rupee, will remain concerns for the second straight year.

Here’s what market experts said.

4. A Year Of Awry Forecasts

Analysts got three in every five stock recommendations made at the start of 2018 wrong as a host of unforeseen factors, including a trade war and exodus of foreign investors driven by a weaker rupee and rising crude, sent forecasts awry.

• Of 158 stocks recommended by 13 brokerages, 68 closed with gains on Dec. 28., a success rate of 43 percent, according to BloombergQuint’s analysis of targets given at the beginning of the year. The remaining 90 companies lost value this year.
• The majority of the 13 brokerages fared worse than the benchmarks indices, according to BloombergQuint’s analysis—mid-year changes in price targets were not considered and stock prices were adjusted for splits and bonuses.

The performance underscores volatility in Indian equities.

5. Markets End Volatile 2018 On A Tepid Note

Indian equity benchmarks were little changed on the last trading session of 2018 as gains in Tata Steel, Vedanta and Infosys were offset by losses in HDFC, Axis Bank, Maruti Suzuki and Reliance Industries.

• The S&P BSE Sensex declined 8 points to 36,068.
• The NSE Nifty 50 Index rose 3 points to 10,863.
• Fifteen of 19 sector gauges compiled by BSE ended higher led by the S&P BSE Metal Index's 1.4 percent gain.
• On the flipside, S&P BSE Telecom Index was top loser, down 0.80 percent.

Follow the day’s trading action here.

U.S. stocks rose, paring a December slump that is among the worst in history, after President Donald Trump reported “big progress” in trade talks with his Chinese counterpart.

• The S&P 500 trimmed its monthly loss to 9 percent, the steepest of the record bull market, as Trump said in a tweet that negotiations toward a comprehensive trade deal were “moving along very well.”
• Stocks around the world climbed at the end of a dismal year that’s seen bear markets in equities from Japan to Germany.
• Crude pared gains that took it above $46 a barrel, and remains on track its first annual drop since 2015. The dollar edged lower as a government shutdown continued.

Here’s your daily global markets fix.

6. Worst Year In A Decade For Mid Caps

Zero. That’s the number of mid-cap stocks that doubled investor money in 2018—the worst performance since 2008, the year of financial crisis.

• Seventy-three of the Nifty Midcap 100 stocks declined this year and the benchmark tumbled 15.5 percent.
• The selloff in the broader market was driven by introduction of long-term capital gains tax, change in mutual classification, liquidation concerns around non-bank lenders, higher oil prices, a weaker rupee and the trade war.

Here are the top mid-cap losers.

7. Automakers In The Slow Lane

Auto sales are likely to remain muted in December due to a slowdown that began during the festive season even as brokerages continue to be sanguine about a recovery in the new year, according to BloombergQuint poll of three brokerages.

• A flat growth in the passenger vehicle segment and a sharp double-digit decline could be seen for the medium and heavy trucks, according to the poll.
• Maruti Suzuki India Ltd., the country’s largest carmaker, is expected to report a low single-digit sales growth due to a week-long maintenance shutdown in December.
• Mahindra & Mahindra Ltd. is also expected to report a tepid growth on the back of a weak demand in utility vehicle sales despite the launch of Marazzo.

Here’s more on the year-end bump for automakers.

8. The Books Market Gurus Swear By

Market analysts are usually consulted for their views on stocks and the economy. What if they had to recommend good reads?

That’s what BloombergQuint asked them to do.

Aswath Damodaran

• Efficiently Inefficient: How Smart Money Invests and Market Prices Are Determined, By Lasse Pedersen
• Stay the Course: The Story Of Vanguard And The Index Revolution, By John C Bogle
• Thinking Fast and Slow, By Dan Kahneman

Sanjoy Bhattacharya

• Investing For The Long Term, By Francisco García Paramés
• Seeking Wisdom: Thoughts On Value Investing, By Thomas MacPherson
• The Geometry of Wealth, By Brian Portnoy

Here’s what Vishal Khandelwal, Saurabh Mukherjea and Neelkanth Mishra suggested.

9. Billionaire Winners and Losers of 2018

The market turmoil pushed many wealthy people into the red, but that hasn’t stopped plenty of mega-fortunes from being unearthed in 2018.

The world’s 500 richest people lost $451 billion this year. That’s a sharp reversal from 2017 when they added $1 trillion to their fortunes.

Here are the billionaires who gained and lost in 2018.

Here are the reasons behind the gains and losses.

10. Year In Pictures 2018

It was a year of populist rebellions and political stare-downs. China’s ambitious expansions raised hackles and pollution levels. Trade patterns were upended, and long-standing bans were lifted. Women gained power, and refugees fled violence and starvation. And through it all, the world still managed to provide moments of wonder.

These were some of Bloomberg’s best photos of 2018.