Economists are divided on whether the Reserve Bank of India (RBI) should cut interest rates in August. Some point to low inflation, while others advocate caution, citing uncertainty in trade policy and the need to assess future inflation trends. The RBI will consider GDP projections and retail inflation figures when the Monetary Policy Committee meets in August.

Payment banks are urging the RBI to reduce the statutory liquidity ratio (SLR) by at least 10% to invest in higher-yielding instruments and boost margins. They re also seeking permission to disburse loans and accept deposits up to ₹5 lakh. With previous requests unanswered, they ve requested a meeting with the RBI governor to discuss these issues.

IndiGo Airlines may see a rise in aviation insurance costs. This follows a recent Air India accident and a tougher reinsurance market. SpiceJet s policy renewal is also coming up. Reinsurers are increasing prices due to global aviation losses. London reinsurers are reducing capacity and raising rates. IndiGo s insurance covers its large fleet. The total insurance value is around $20 billion.

Bank of Baroda and Canara Bank reduced their corporate loan portfolios by ₹54,000 crore in the June quarter to protect net interest margins amidst repo rate cuts. Public sector undertakings sought further rate revisions, prompting the banks to prioritize profitability over retaining these loans.

Despite a recent market rebound, many stocks are still below their 2024 highs. An ETIG study reveals that a significant portion of NSE 500 stocks remain considerably lower than their peak values. Analysts suggest these stocks may struggle to reach previous highs due to valuation concerns and limited earnings growth prospects.

Meme stock enthusiasm has returned, creating uncertainty for professional investors. Stocks like Opendoor Technologies and Kohl s experienced gains. The S&P 500 and Nasdaq 100 indices reached record highs. Investors are borrowing heavily to buy stocks. Some analysts suggest caution due to high valuations. Comparisons are being drawn to the GameStop and AMC surge of 2021.

With stocks near peaks and volatility low, investors are seeking sophisticated hedging strategies beyond standard put options. Lookback or re-settable puts, which adjust their strike price as the market rises, are gaining popularity due to their relatively low cost compared to vanilla puts.

The Nifty closed below 25,000, signaling potential short-term weakness, with support around 24,500 and resistance in the 25,200-25,500 range. Pharma stocks are expected to continue their upward trend, while the Nifty Defence index shows bearish signals. Investors might consider accumulating specific stocks like Capri Global Capital and NLC India.

Canara Bank intends to sell its surplus priority sector loans this quarter to offset margin pressures caused by declining interest rates. In the first quarter of fiscal year 2025, the bank generated ₹1,248 crore in commission from these sales. Despite the sales, the bank s priority sector debt remains at 45.6%, exceeding the regulatory requirement of 40%.

Emerging-market debt hedge funds, boasting impressive double-digit returns this year, are strategically mitigating risks amidst a deepening rally. Funds are swapping longer-maturity bonds for shorter-dated ones, prioritizing higher-rated, liquid securities, and increasing cash reserves. This cautious approach addresses uncertainties stemming from US policies, global conflicts, and tight pricing, while still seeking selective opportunities for further gains.