US to announce interest rate, Vedanta's Rs 7 dividend, & more
Wednesday, 18 June 2025
Markets opened below yesterday’s closing point.
Nifty 50 rose sharply immediately after opening and fell throughout the day to close in the red.
Consumer durables stocks and private bank stocks rose the most today. Media stocks and IT stocks fell the most.
Global markets: US and European markets fell. Most Asian markets closed in green.
News
The US Fed will announce its interest rate decision later today (18 June).
India’s gems & jewellery exports fell 14.07% year‑on‑year to Rs 19,261 crore in May. Imports also fell 11.07% to Rs 14,393 crore. Gold jewellery exports rose 19.57% to Rs 8,482.61 crore: GJEPC.
UK’s annual inflation rate fell to 3.4% in May, compared to 3.5% in April. Core inflation (excludes volatile items) also fell to 3.5%, compared to 3.8% in April.
Arisinfra Solutions IPO has been subscribed 0.24 times. Retail subscription: 1.04 times. IPO closes on 20 June.
Stocks Updates
Vedanta: board declared a dividend of Rs 7 per share with 24 June as the record date. The company also divested a 1.6% stake in Hindustan Zinc for Rs 3,028 crore to reduce debt and further investments.
Jio Financial: fully acquired Jio Payments Bank Ltd for Rs 104.54 crore from SBI.
PNB: sold its entire 20.90% stake in India SME Asset Reconstruction Company Ltd (ISARC), an associate company of the bank, for Rs 34.05 crore.
M&M: received CCI approval to acquire around 59% stake in SML Isuzu, and to launch an open offer for an additional 26% stake at Rs 1,554.60 per share.
Siemens: a company-led consortium got a Rs 4,100 crore contract, out of which Siemens’s share is Rs 1,230 crore, to provide advanced signalling and telecom technology for Mumbai-Ahmedabad high-speed rail. It also includes 15 years of maintenance.
Vodafone Idea (Vi): partnered with AST SpaceMobile, a US-based satellite telecom firm, to offer cellular connectivity via satellite directly to standard smartphones across India.
Reliance Infra: company subsidiary Reliance Aerostructure has partnered with Dassault Aviation to build Falcon 2000 business jets in India. This is the first time these jets will be manufactured outside of France.
Delhivery: the CCI approved the Rs 1,407 crore acquisition of Ecom Express.
Word of the Day
Interest Rate Derivatives
It is a financial contract, whose value is linked to the movement of interest rates
These can be interest rates of central banks, bonds, etc.
Thus, if interest rates change, the value of the derivative change too.
They can be used as a hedge – to protect against losses if interest rates rise or fall.
They can also be used to speculate – to make a profit by guessing how interest rates will move.
6 Day Course
Theme: stock screeners
Day 3: Wednesday
Two of the most common ways to spot good stocks using screeners — value stocks filters and growth stocks filters.
Investors interested in value investing tend to use screeners to filter out stocks that have a low PE ratio, PB ratio, earnings per share, debt-to-equity ratio, return on capital, profit margin, etc.
Many screeners also show average industry-wide PE ratio, PEG, etc.
These prove instrumental in helping the investor assess how overvalued or undervalued different stocks are.
Growth investors, on the other hand, use screeners to filter out stocks based on revenue growth, earnings growth, return on assets, etc.
They usually give less importance to metrics like the PE ratio, PEG ratio, etc.
Many screener websites have pre-built screens where the filter parameters are already set to match an investor’s style — value or growth are common filters.
Many investors use pre-built screens and then modify them slightly to suit their needs.
Featured Question
Q. “Say suppose, I have a SIP in XYZ mutual fund which was performing good and giving returns above the benchmark. Recently for past few months it's returns are come down. In this situation what would be the ideal decision to make? Like say discontinuing SIP or withdrawing total amount invested and investing in other mutual fund.”
Mutual funds do underperform their benchmark for short durations.
This is completely normal and almost unavoidable.
Such underperformance should be ignored.
If a mutual fund underperforms for extended periods of time like over a year, investors should become alert.
In such a case, investors should try to see if the fund manager has offered a valid explanation for this and when they expect the fund to perform well.
This is usually done on TV interviews, online webinars, emails, etc.
If the explanation seems convincing, the investor may consider continuing to invest in the mutual fund.
If not, then an investor should decide on their action.
It definitely makes sense to make no more future investments in such a case.
The difficulty arises in deciding what should be done with the amount already invested.
Should the amount be withdrawn and reinvested?
Should the amount be left there?
In some cases, the taxes might be so high that it might not make sense to withdraw. This is more true if the investment period is shorter (3-4 years).
For longer periods, it might make sense to withdraw and reinvest the money somewhere else despite the taxes.
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