Budget-day Options
what to do on the highest vol day of the year
Budget days - where our Finance Minister presents the budget for the year - tend to be full of surprises. Earning across entire sectors (infrastructure, defense, railways, etc…) are entirely dependent on how much the government increases spending in those areas. This obviously creates volatility in the markets.
Here are some things you can do on budget-day: Budget-day Options
Do check out our PMS Surveillance and Daily Media Digest.
Markets this Week
More here: country ETFs, fixed income, currencies and commodities.
Links
Research
ChatGPT in Systematic Investing (alphaarchitect, SSRN)
An LLM-enhanced momentum strategy outperforms a standard longonly momentum benchmark, delivering higher Sharpe and Sortino ratios both in-sample and in a truly out-of-sample period after the model's pre-training cutoff. These gains are robust to transaction costs, prompt design, and portfolio constraints, and are strongest for concentrated, high-conviction portfolios. The results suggest that LLMs can serve as effective real-time interpreters of financial news, adding incremental value to established factor-based investment strategies.
India
The Supreme Court of India ruled that Tiger Global is liable to pay capital gains tax on the sale of its Flipkart shares, which took place in 2018. It is a precedent-setting verdict that will impact other investors claiming tax treaty benefits. The ruling signals that the Indian judiciary and tax authorities will look beyond the surface of holding structures to determine tax liability, potentially affecting other private equity and venture capital firms that operate through Mauritius or Singapore (reuters, livemint, livemint, livemint).
Tiger Global ruling may affect more than 500 foreign funds in India’s F&O market. Many FPIs set up shop in Mauritius or Singapore to avail zero tax on derivative market gains and these structures need to be revisited post apex court verdict (moneycontrol).
CPI rose at its fastest pace in three months in December as the decline in food prices slowed (reuters).
India should thank Trump for blowing up trade (theprint). Thirty five years after liberalisation, let’s pick up threads from an incomplete 1991 story (indianexpress).
We will have trade deals with higher aggregated consumption than the US. This will allow us to make in India and export to these countries. We have recreated the US consumption in the aggregate
China is gradually emerging as a major export destination for India, with shipments rising 33%. The export increase was driven by products such as oil meals, marine products, telecom instruments and spices (thehindubusinessline).
India’s rapid expansion of green energy is outpacing its ability to store or manage the power effectively. A deluge of solar power and rules binding electricity distributors to purchase it are prompting distress sales on India's electricity exchanges. Discoms sitting on excess power often sell it on exchanges at a loss, as the alternative would be to receive nothing, given the weak demand during solar hours (livemint).
India is writing the opening chapter of its semiconductor story (nikkei).
Established Indian startups are gearing up for large cross-border acquisitions, as they look beyond domestic markets to drive growth, diversify revenue and justify valuations (livemint).
row
The United States has turned dark, aggressive, and lawless (theatlantic).
Most countries are now scrambling to de-risk from America (ft).
The Justice Department’s decision to open up a criminal investigation of Jerome H. Powell, the chair of the Federal Reserve, is a major escalation in the pressure campaign against the central bank to cut interest rates (nytimes).
Germany’s economy, the third-biggest in the world by nominal GDP, has been stagnant for three years, and factory closures and insolvencies are reaching worrying levels (economist).
The EU-Mercosur agreement is a big deal in the world of geoeconomics (economist).
A.I.
The Baumol Effect and Jevons paradox are related (a16z).
LLMs are on a collision course with marketplaces (danhock).
We are Not in an AI Bubble (acadian-asset).
Meme of the Week
