Stock Markets & Trade Talks

A Familiar Name in Market Controversy

The infamous Ketan Parekh, a name synonymous with financial scandals, has made headlines once again. In a shocking development, the Securities and Exchange Board of India (SEBI) uncovered an intricate front-running scam tied to Parekh's network, leading to the impounding of ₹65.77 crore. This revelation raises significant questions about market integrity and the persistent challenges in preventing financial misconduct.

What Happened?

Front-running, an unethical practice where traders gain unfair advantage by exploiting advance knowledge of large trades, was at the heart of this latest scam. SEBI's investigation revealed that individuals linked to Parekh had engaged in coordinated efforts to manipulate the market and profit at the expense of retail investors. This isn't the first time Parekh's name has surfaced in such controversies, making the recurrence even more alarming.

Key details of the case include:

When investing in mutual funds, you can choose between two types of plans: Regular Plans and Direct Plans. Both offer access to the same mutual fund schemes but differ in terms of costs and how they are purchased. Here’s a breakdown of the key differences:

 Expense Ratio

• Regular Plan: Regular plans have a higher expense ratio because they include the cost of commissions paid to intermediaries, such as financial advisors or distributors. These commissions are factored into the overall cost, making the expense ratio higher.

• Direct Plan: Direct plans have a lower expense ratio since there are no intermediaries involved. You invest directly with the mutual fund company, eliminating distributor commissions.

 Returns

In a volatile week for the Indian stock market, the combined market valuation of eight of the top ten most valued companies suffered a substantial erosion, amounting to Rs 1.66 lakh crore. This stark decline reflects the broader weak trend in equities, with significant repercussions for the market as a whole. Reliance Industries and Life Insurance Corporation (LIC) of India emerged as the largest contributors to this decline, highlighting the vulnerabilities in even the most robust segments of the market.

Reliance Industries: Leading the Downward Spiral

Reliance Industries, a behemoth in the Indian corporate landscape, witnessed a steep decline in its market capitalization, losing Rs 33,930.56 crore to settle at Rs 19,94,765.01 crore. This loss is emblematic of the challenges facing the company amidst broader market turbulence. Investors are left grappling with the implications of such a significant loss in value, particularly in a company that has traditionally been seen…

Cognizant, a prominent player in the IT services sector, has announced a significant 22% surge in its net profit for the second quarter, amounting to $566 million. This impressive growth has been achieved notwithstanding a marginal year-over-year dip in revenue, which was reported at $4.85 billion, marking a decrease of 0.7%. Conversely, the firm witnessed a 1.9% increase in revenue on a quarter-over-quarter basis, indicating an upward trajectory in its financial health.

Revised FY24 Revenue Guidance

In light of its strong Q2 performance, Cognizant has revised its full-year revenue guidance for FY24 from $19.3 billion to $19.5 billion. This revision represents a growth range of -0.5% to 1%. The company's Q3 revenue guidance has been set between $4.89 billion and $4.96 billion, indicating cautious optimism in its future financial outlook.