Markets opened significantly above Friday’s closing point.
Nifty 50 stayed in the green due to positive global sentiments after hopes of a US-Iran peace deal and easing crude oil prices.
All sectors’ stocks rose today except for the FMCG stocks. PSU bank stocks and private bank stocks rose the most.
Global markets: US markets and Asian markets rose. European markets rose (as of 6 pm IST).
News
The US-Iran peace deal talks are underway. Both sides maintain that the talks are progressing but a lot remains to be discussed.
India’s petrol and diesel prices were hiked by around Rs 2.50 per liter, for the 4th time in the last 11 days.
Stocks Updates
Bharat Electronics: company has received orders worth Rs 608 crore for supplying radar systems, jammers, medical electronics, etc.
Ashok Leyland: company has received an order for 715 vehicles from VRL Logistics.
JSW Steel: has partnered with Bharatia and Carbon Iceland International for developing a large scale green methanol project in India.
IRFC: has signed a refinancing deal worth Rs 13,527 crore with L&T Metro Rail Hyderabad.
Hindustan Zinc: company’s Rampura Agucha mine has been accorded the ‘Zinc Mark’, a mark signifying ethical mining practices.
Word of the Day
Interest Coverage Ratio
It shows how easily a company can pay interest on its debt with its earnings.
It is a metric to assess the financial stability of a company.
It is calculated by dividing a company’s earnings before interest and taxes (EBIT) by its interest expenses.
A higher ratio means the company can comfortably pay its interest, while a lower ratio means it may struggle to make these payments.
6 Day Course
Theme: understanding alpha
Day 1: Monday
What is alpha?
The easier way to understand it is by calling it ‘additional returns’.
Everyone is able to invest in an FD and get 6% per annum returns (example). In your specific case, the bank offers you an extra 0.5% returns — more than what is available. Then, in this case, 0.5% is the alpha.
There is an easily obtainable return available. Anything above that easily available return is the alpha.
So, for example, a Nifty 50 index fund or ETF is able to give you 12% per annum.
If a mutual fund gives you 14% per annum, then compared to the index fund or ETF, this mutual fund is giving you an alpha of 2%.
Everyone wants alpha, no matter what they are investing in.
Alpha is always measured against some benchmark.
In the above cases, the normal FD rate was the benchmark. In the second example, Nifty 50 index return was the benchmark.
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