(Bloomberg) -- Before the trading day starts we bring you a digest of the key news and events that are likely to move markets.

Good morning, this is Ashutosh, an equities reporter in Mumbai. Traders are returning to a buoyant market after a long weekend. Expectations of political stability since the formation of the new government have powered the Nifty and Sensex to new records. India has now become the world’s fifth nation to reach the $5 trillion market value milestone. Over the weekend, Hyundai Motor Co.’s local unit even filed for an IPO. With next month’s federal budget approaching, traders expect the upbeat mood to continue.

Consumer sector set for a boost with likely tax cuts

More good news is likely for consumer goods stocks. The recent forecast for plentiful monsoon this season and the shift in investor focus to defensive plays have already provided the sector a boost. Now, media reports suggests that the government is considering a tax cut for low-wage earners in a bid to boost boost disposable income and consumption. This move is being preferred by the authorities over offering freebies or increasing welfare spending, which has been a sore point with investors.  

Paytm looks to offload non-core assets to get back on track

Paytm, once the poster child of India’s startup scene, has a had it rough. Regulatory crackdowns, especially on its payments business, have hit hard. Now, the company is looking to sell non-core assets to get back on track. The latest move involves selling its movie and ticketing business to Zomato Ltd., Bloomberg News reported yesterday. While Paytm’s shares are far below their 2021 IPO price, they’ve rallied this month on media reports about the Adani Group’s interest in the fintech firm, despite denial from both sides.

Defense stocks are emerging winners on policy optimism   

Defense-related stocks have rallied hard, as the new government’s thrust on indigenesation remains unwavering. Companies such as Paras Defence and the state-run Mazagon Dock have surged more than 20% this month. The winning streak is likely to continue, given the healthy order flow. Over the weekend, Hindustan Aeronautics Ltd. received a proposal from the Defence Ministry to buy over 150 helicopters, an order likely worth $5 billion. HAL is the best performing stock this year in Bloomberg’s global gauge of aerospace and defense firms.

Analysts actions:

  • Wipro Raised to Hold at Investec; PT 505 rupees
  • Nykaa Raised to Add at ICICI Securities; PT 195 rupees
  • Mahindra Cut to Add at Axis Capital Limited; PT 3,150 rupees

Three great reads from Bloomberg today:

  • Ashmore to Buy More Indian Bonds as JPMorgan Inclusion Nears
  • Big Take: The Deadly Mining Complex Powering the EV Revolution
  • Big Reshuffle of $71 Billion ETF Looms as Nvidia Surpasses Apple

And, finally..

India’s market for block trades and share placements has been buzzing this year, with companies seeking to cash in on soaring valuations and robust investor demand, my colleague Filipe Pacheco notes. Funds raised from additional share sales in the country this year jumped 275% to $16.7 billion, Bloomberg-compiled data show. In contrast, Asia Pacific saw a 3% drop, while mainland China experienced a 73% slump. 


--With assistance from Filipe Pacheco.

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