Key benchmark indices closed higher on Tuesday with the Nifty ending near the 18,000 mark, while Sensex settling at 60,284.31, up 148.53 points. Investors are tracking global developments like Atlanta Fed president Raphael Bostic’s speech and the September CPI and August IIP data in India that are due later today. The Indian government will also release September trade data.
Rupee falls 16 paise to close at 75.52 (provisional) against US dollar
Sensex, Nifty end higher
Key benchmark share indices closed higher on Tuesday amid choppy trade through the day. The Nifty hit the 18,000 mark but settled slightly below the psychological level. Sensex closed at 60,284.31, up 148.53 points lifted by Titan and RIL. While banks led the gains, IT stocks were the biggest drag. ‘
The broader market was positive with BSE SmallCap and MidCap ending on a firm note.
Coal minister Pralhad Joshi says India has coal stock for 22 days at power plants: CNBC-TV18
Nifty IT down 1%; Wipro, Mphasis outliers
Sensex players at this hour
Govt gets 24 bids for 21 blocks offered in latest exploration licensing round
The government has received a total of 24 bids for 21 blocks it offered in the latest exploration licensing round, with ONGC submitting bids for 19 blocks, Sun Petrochemicals for three, and Oil India for two, as per information available on the website of the Directorate General of Hydrocarbons (DGH).
Macron unveils 30 bln euro “France 2030” investment plan: Reuters
French President Emmanuel Macron unveiled on Tuesday a five-year, 30 billion euro ($35 billion) investment plan aimed at fostering industrial champions in areas ranging from green energy to biomedicine and semi-conductors.
Inflation fears take toll on European stocks ahead of earnings
European shares fell on Tuesday as investors worried that soaring commodity prices would hamper a recovery in corporate profit, with fresh signs of troubles at property developer China Evergrande also hitting confidence.
The pan-European STOXX 600 index fell 0.6% in early deals, hovering about 5% below its August peak. Asian stocks also fell after Evergrande missed its third round of bond payments in three weeks.
Nifty PSU Bank surges over 2%
So far today, Sensex has moved between a high of 60,263.61 and low of 59,885.39
SBI, Titan, Sun Pharma among 286 stocks to hit 52-week highs on the BSE amid weakness in broader markets
USD-INR likely to cross 76-mark; equities to continue its bull run: Angel One
Indian equities are on a bull run, having gone on to become among the best performing markets globally due to abundant liquidity and a pick-up in business activities. Moreover, higher growth potential and expected tapering by the US Federal Reserve has seen a flood of startups going public this year, giving the emerging market an edge especially when sentiment toward Chinese equities has soured. The rising participation of retail investors with the increased digitalisation JAS also provided major support to the equity market.
On the other hand, the trend of Indian Rupee has been totally the opposite. It made a one-sided move towards south, weakening more than 3% since September when a raft of strong U.S. economic data rekindled expectations for earlier policy tightening by the U.S. Federal Reserve. This has pushed both the US Dollar Index and the treasury yields higher thereby causing woes for the Indian rupee. In addition, suspected dollar buying by oil companies as global crude prices surged to multi highs added to Rupee’s woes. It is said that amongst the Asian currencies, USDINR will be the most impacted from the inflated oil prices as they have a direct impact on the rupee in the form of a higher import bill. The indirect impact is felt through inflation expectations. Another factor that played an important role in bringing the volatility into the markets was the Chinese liquidity crisis which could slam the banking system and bleed into the foreign financial centres.
In the coming days, the key focus shall be on the September quarter earnings. More than 50 companies will declare their quarterly numbers including Infosys, Wipro, HCL Technologies, HDFC Bank etc. The possibility of local equities trading in green remains high.
With respect to rupee, USDINR (CMP 75.35) is expected to continue with its bullish trend towards 75.80 levels; break of which could push it towards 76.00 mark. Combination of higher US treasury yields and persistent worries over oil prices could make it difficult for the Indian Rupee in the coming days. In fact, the US Dollar Index is expected to move higher on expectations that the Federal Reserve will announce a reduction in the pace of bond purchases at the next month’s FOMC meeting (3rd Nov’21) which could further hamper rupee. On the lower side, 74.70 and 74.40 remains strong support.
Govt may consider higher GST, fewer rates to simplify structure: report
India may look at increasing tax on some goods and services in a step toward moving to a simpler structure with fewer rates, Bloomberg reported citing people familiar with the matter.
A panel on goods and services tax, headed by Finance Minister Nirmala Sitharaman, will likely meet in December to consider the overhaul from the current four-rate system, the people said, asking not to be identified, as the discussions are private.
India currently taxes good and services produced in the country at 5%, 12%, 18% and 28%, with some essentials such as food items attracting the lowest rate and sin and luxury goods ending up with the highest levy.
Results preview for metal and mining stocks: ICICI Securities
Commodity price tailwinds coupled with sequential improvement in volumes is expected to aid domestic metal companies to report a healthy performance in Q2FY22E.
During Q2FY22E, average steel prices are likely to be QoQ higher by ~| 1000-2500/tonne vs. Q1FY22. Despite a sharp rise, coking coal costs are likely to witness only a marginal increase in Q2FY22E due to a lag in consumption as steel companies generally maintain a month or two of coking coal inventory. For Q2FY22E, we expect EBITDA/tonne of Tata Steel to increase QoQ while EBITDA/tonne of JSW Steel, SAIL is expected to moderate from Q1FY22 levels. For Q2FY22E, EBITDA/tonne of Tata Steel (standalone operations) is expected to come in at | 36500/tonne (| 35558/tonne in Q1FY22).
For Q2FY22E, standalone operations of JSW Steel are likely to post an EBITDA/tonne of | 25000/tonne (| 26291/tonne in Q1FY22). SAIL’s EBITDA/tonne for Q2FY22E is likely to come in at | 18000/tonne (| 19728/tonne in Q1FY22). Also, for Q2FY22E we expect steel companies to report QoQ improvement in sales volumes on the back of easing of lockdown restrictions. On the non-ferrous front, QoQ, zinc, lead, aluminium prices are up 3%, 10%, 10%, respectively, while YoY, zinc, lead and aluminium prices are up 28%, 25% and 55%, respectively.
Saraswat Bank ties up with Axis Securities to integrate banking with investing
Saraswat Bank on Tuesday said it has tied up with Axis Securities to offer its customers investing services through a 3-in-1 account. The facility will integrate savings bank account maintained by the co-operative bank with the demat and trading account offered by Axis Securities, which is a subsidiary of Axis Bank.
This 3-in-1 account will make it easier for customers to transfer funds quickly, reduce paperwork and provide a comprehensive platform to invest in various investment instruments like stocks, derivatives, currency, commodities, mutual funds and IPO, the bank said in its statement.
Sebi to revoke Brickwork Ratings licence
India’s markets regulator is about to take unprecedented penal action and revoke the license of credit rating agency (CRA) Brickwork Ratings, two people with knowledge of the development said.
In an upcoming order, the Securities and Exchange Board of India (Sebi) will also bar from the markets two former senior officials of Care Ratings—managing director Rajesh Mokashi and chairman S.B. Mainak—for failing to ensure independence in the rating process. Infrastructure Leasing & Financial Services Ltd (IL&FS) and a group company were shareholders in Care Ratings between 2007 and 2013, during which time the agency rated the commercial papers of the same companies. (Read here)
DCGI approves BharatBiotech ’s Covaxin for children between 2 and 18 years of age: reports
Kashmir receives first snowfall of season: Skymet
India warns states against selling power at high price on exchanges: Reuters
India’s power ministry has warned states that federal power producers will curtail supplies of electricity to them if their utilities are found selling power on exchanges to take advantage of surging prices.
Asia’s third-largest economy is facing large-scale outages as several power plants have low coal inventories amid a sharp spike in global energy prices.
Some states, instead of supplying electricity to their consumers, are imposing rolling power cuts known as load shedding, and selling power at higher prices to energy exchanges, the ministry said in a statement, without giving details.
States that do this risked having federally supplied power, known as unallocated power, cut, it said.
Top gainers/losers on Nifty at this hour
Former SBI chairman Rajnish Kumar joins BharatPe board
Merchant payments and financial services provider, BharatPe, on Tuesday said that it has appointed Rajnish Kumar, former chairman of State Bank of India, as chairman to its board of directors.
As a part of his new role, Kumar will be involved in defining BharatPe’s short-term and long-term strategy and will also work closely with other board members and executives of the company on key business and regulatory initiatives.
RBI bars Haribhakti & Co from auditing activities for 2 years
The Reserve Bank of India has barred Haribhakti & Co from undertaking any type of audit assignments in any of the entities regulated by the central bank for a period of 2 years, with effect from 1 April 2022.
This is the first such debarment under Section 45 MAA of the RBI Act 1934, which deals with powers and duties of auditors.
“This action has been taken on account of the failure on the part of the audit firm to comply with a specific direction issued by RBI with respect to its statutory audit of a Systemically Important Non-Banking Financial Company,” said RBI said in a circular on Tuesday.
Oil rises for fourth day amid energy crunch
Oil prices reversed early losses to extend gains on Tuesday into a fourth day amid a rebound in global demand that is contributing to energy shortages in major economies.
Brent crude was up 21 cents or 0.3% at $83.86 a barrel, the highest in three years, after rising 1.5% on Monday.
U.S. oil gained 13 cents or 0.2% to $80.65 a barrel, a seven-year high, having also gained 1.5% in the previous session.
India’s Everest Organics starts making ingredient for Merck’s COVID-19 pill: Reuters
India’s Everest Organics Ltd on Tuesday said it has started making the active pharmaceutical ingredient (API) for a generic version of Merck & Co’s experimental antiviral drug molnupiravir to treat mild to moderate COVID-19.
The Indian bulk drugs manufacturer joins Divi’s Laboratories Ltd as an API maker for Merck’s experimental oral drug.
Merck has separately entered into voluntary licensing agreements with at least eight Indian generic drugmakers for molnupiravir, with an aim to turn the country into a manufacturing hub for the drug.
Merck said on Monday it had sought U.S. emergency use authorisation for the drug, putting molnupiravir on course to become the first oral antiviral medication for COVID-19.
The U.S. authorisation application was based on data released earlier this month by Merck and partner Ridgeback Biotherapeutics.
The data showed molnupiravir nearly halved the risk of hospitalisation or death in at-risk non-hospitalised patients with mild-to-moderate COVID-19.
Nifty broader market indices at this hour
India 10-year bond yield slips to 6.334%
Radico Khaitan adds premium vodka, whisky to portfolio
L&T Construction bags significant contracts for its various businesses
Alembic Pharma gets inspection report from US FDA
Alembic Pharmaceuticals has received Establishment Inspection Report (EIR) from US Food and Drug Administration (FDA) for inspection of its New Injectable Facility (F-3) at Karakhadi conducted during 28 January to 5 February.
US FDA has indicated that a compliance verification will be performed during re-inspection of the said facility in the next review cycle.
Accenture to acquire Bengaluru-based BRIDGEi2i to expand capabilities in AI, data science
Global technology major Accenture on Tuesday said it has signed an agreement to acquire BRIDGEi2i, an artificial intelligence (AI) and analytics firm headquartered in Bengaluru, with offices in the US and Australia.
The acquisition will add more than 800 deeply skilled professionals to Accenture’s Applied Intelligence practice, strengthening and scaling up its global capabilities in data science, machine learning and AI-powered insights. The financial details of the transaction are not being disclosed.
Founded in 2011, BRIDGEi2i specialises in data-driven digital transformation for companies across industries and global markets by combining data engineering, advanced analytics, proprietary AI accelerators and consulting services. It helps enterprises drive insights for faster and more accurate decision-making, thereby enabling shorter time to value.
IT stocks pull Sensex lower
Power ministry asks NTPC, DVC to supply as much power as available to Delhi discoms under PPAs
ICICI Securities on Motherson Sumi
Motherson Sumi has completed two acquisitions.
Entered aerospace industry via 55% stake acquisition in Bengaluru based CIM Tools, engaged in machining, treatment, sub-assembly, testing of detailed aircraft parts. The transaction values CIM group at ~7.5-8x FY20 EV/EBITDA. It generated revenues of | 129 crore in FY21 (| 203 crore in FY20) and has orderbook of >| 1,500 crore, executable over next five years
The company’s SMR subsidiary via its 50:50 JV Ningbo SMR Huaxiang Automotive Mirrors acquired 60% stake in China based Nanchang JMCG Mekra Lang Vehicle Mirror Co. The latter is a maker of mirrors for PVs, pickup trucks and light and heavy CVs in China (~6.5% market share). The acquisition has been done at 0.4x CY20 P/S (revenues of CNY 131 million i.e. ~| 150 crore). This entity is supplying to OEMs like Ford and Isuzu
Key triggers for future price performance
· We build 13.5% FY21-23E net sales CAGR; margins at 10.9% by FY23E
· Well poised to clock 20% RoCE by FY23E
“Revising our forward estimates, we now value MSSL at ₹280 i.e.30x P/E on FY23E EPS of 9.3 (previous target price of ₹270).”
Rupee slips 6 paise to 75.42 against US dollar
Nifty IT worst hit among sectoral indices today
HCL Technologies expands strategic partnership with Google Cloud
Nifty Auto surges led by Bajaj Auto, Tata Motors
Market view: Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments
“The markets failed to close above the 17950 level yesterday which was not an encouraging sign. Although we triggered the 18000 mark, we were unable to maintain the momentum. In the current scenario if we get past 18050, we should scale higher to 18200. A good support for this market lies at 17800 and as long as that holds, the overall trend is positive.”
Tata Power Solar receives EPC orders worth ₹538 crore from EESL
Tata Power Solar Systems Ltd, the wholly-owned subsidiary of Tata Power, has received “Letter of Award” (LoA) to build 100 MW of Distributed Ground Mounted Solar projects for Energy Efficiency Services Limited (EESL). The total order value of projects is ₹ 538 crore. The commissioning date of the projects is set for 12 months.
With this win, the Utility Scale EPC order book of Tata Power Solar now stands at ~4GW (DC) capacity with an approximate value of ₹ 9,264 crore.
ICICI Securities on RIL
Reliance Industries Ltd has announced two acquisitions in renewable energy space.
· It acquired 100% stake in REC Solar Holding. The acquisition value for the deal was at EV of US$771 million
· It has also acquired 40% stake (post money) in Sterling & Wilson
· On valuation front, strong subscriber addition for Jio, increase in global gas prices and healthy demand in retail segment also led to higher multiples
Key triggers for future price performance
· Increment value accretion from the ‘digital ecosystem’ that will be captured at the Jio Platforms (JPL) level
· Steady FCF generation in the retail segment would enable the company to maintain debt at lower levels and improve its ability to invest in future inorganic opportunities
· Stake sale in O2C segment to strategic global player will unlock value and enable RIL to invest in new energy verticals
“We maintain our HOLD rating on the stock. Target Price and Valuation: On an SOTP basis, we value the stock at | 2760/share.”
Market outlook: ICICI Securities
Equity benchmarks started the week on a cheerful note as the Nifty conquered the psychological mark of 18000. The Nifty ended Monday’s session at 17946, up 51 points or 0.3%. The market breadth remained positive with A/D ratio of 1.25:1 as broader markets relatively outperformed the benchmark. Barring IT, all other major indices ended in the green led by financials, auto and realty.
The Nifty surpassed the psychological mark of 18000 and scaled a fresh all-time high of 18042. However, minor profit booking from higher levels dragged the index below 18000. The daily price action formed a bull candle with shadow on the upper side, indicating positive bias amid elevated volatility at higher levels. In the process, the record setting spree of broader markets endured
Multi sector participation backed by improving market breadth makes us believe the Nifty would continue to march upward and gradually head towards 18200 in October as it is implied target of past two week’s major consolidation (17800-17400).
Key point to highlight is that the Bank Nifty logged a resolute breakout from past three week’s consolidation (38200-36500), indicating rejuvenation of upward momentum that would drive index higher as Bank Nifty carries 37% weightage in Nifty.
Meanwhile, bouts of volatility at higher levels cannot be ruled out. Hence, any breather from here on should be capitalised on to accumulate quality stocks as we enter the Q2FY22 result season.
Covid-19: India records 14,313 new cases, lowest in 224 days
Over the past 24 hours, India recorded 14,313 new coronavirus infections, the lowest in 224 days, taking the country’s total to 3,39,85,920. The recovery rate rose to 98%, according to data from the Union health ministry on Tuesday.
Death toll climbed to 4,50,963 with 181 fresh fatalities.
Tata Motors rallies after reporting jump in wholesales
For the September ended quarter, Tata Motors’ global wholesales, including that of Jaguar Land Rover stood at 2,51,689, rose 24% year-on-year.
Global wholesales of all Tata Motors’ commercial vehicles and Tata Daewoo range stood at 89,055. This is an increase of 57%, over same quarter last year.
Wholesales of all passenger vehicles in the reporting period rose 11% year-on-year to 1,62,634.
Top gainers/losers on Nifty at this hour
Sensex so far today
Sensex stocks in opening deals
Nifty in pre-open trade
Sensex in pre-open trade
Invesco questions Zee-Sony deal in a letter to investors
Invesco Developing Markets Fund, the largest shareholder of Zee Entertainment Enterprises Ltd, has expressed concern about some of the terms of Sony Pictures Networks India’s proposed purchase of Zee, which the investor claims favour the promoters over ordinary shareholders.
In an open letter to Zee shareholders, Invesco questioned the rationale for Sony agreeing to pay 2% additional equity as a non-compete fee to promoter Subhash Chandra’s family when his son, managing director Punit Goenka, will continue to run the merged entity for five years from the completion of the acquisition. (Read here)
Decks cleared for Akasa to take off next summer
Akasa Air, which is operated by SNV Aviation Pvt. Ltd and counts billionaire Rakesh Jhunjhunwala as one of its marquee investors, is slated to start operations from the summer of 2022, the airline said on Monday.
The airline venture will also see the return of former IndiGo president Aditya Ghosh, who along with Jhunjhunwala and former Jet Airways chief executive officer (CEO) Vinay Dube, are reported to be the co-founders of Akasa, which has received a no objection certificate (NOC) from the ministry of civil aviation (MoCA). (Read here)
Nifty view: Ruchit Jain, senior analyst – Technical and Derivatives, Angel One Ltd:
Nifty finally conquered the 18000-mark during the day which has been a remarkable journey post the Covid led fall in the last year. Although the IT space which has done remarkably well in this uptrend corrected today post the quarterly results of TCS, the banking took the charge today and led to markets to achieve the milestone.
The trend remains positive but one needs to be very selective in picking stocks from a short term perspective. The immediate supports for Nifty are placed around 17900, 17840 and 17770 while resistance is seen around 18130. Is is advisable to continue with a stock specific approach and trade with a watch on the above mentioned levels.
SGX Nifty lower in early deals
SGX Nifty futures ticked lower in early deals, indicating a weak opening for the Indian benchmark. The futures traded at 17,854, down 106 points.
Stocks to Watch: Zee Entertainment, Tata Motors, Vodafone Idea, Future Group
Here is the list of stocks that could be in focus in Tuesday’s trade.
Amit Shah takes stock amid fears of coal shortage
Coal and power ministries were directed to ensure and coordinate uninterrupted fuel supplies to power plants during home minister Amit Shah’s meeting with coal minister Pralhad Joshi and power minister Raj Kumar Singh on Monday. The meeting was held amid concerns that depleted coal stocks at power plants may lead to blackouts.
“Extra supply will be ensured by Coal India Ltd (CIL),” said a government official aware of the deliberations seeking anonymity.
Increasing coal supplies and ensuring adequate availability at power plants were discussed at the hour-long meeting that was also attended by officials from the coal and power ministries and executives from state-run CIL and NTPC Ltd, said a second government official, who also sought anonymity.
Oil falls but holds above $80
Oil prices fell for the first time in four days on Tuesday, taking a breather, analysts said, after weeks of gains fuelled by a rebound in global demand that is contributing to energy shortages in economies from Europe to Asia.
Brent crude was down 26 cents, or 0.3%, at $83.39 a barrel, after touching three-year highs on Monday on the way to a 1.5% advance.
U.S. oil fell 33 cents, or 0.4%, to $80.19 a barrel, having also gained 1.5% in the previous session, in which it reached the highest in around seven years.
Asian shares tread lower on inflation concerns
Most Asian stocks dipped Tuesday on concerns about elevated inflation stoked by energy costs and the possibility of a widening Chinese crackdown on private industry. Treasury yields were steady.
Shares fell in Japan and South Korea, but edged up in Australia. U.S. futures retreated after the S&P 500 and Nasdaq 100 declined for a second day as the prospect of a slowing recovery from the pandemic shadowed trading. A report suggesting China is widening scrutiny of private industry by examining ties to state banks also soured the mood.
Japan’s Topix index was down 0.8%, while South Korea’s Kospi declined 1.8%. Australia’s S&P/ASX 200 Index fell 0.4%, Hong Kong’s Hang Seng Index shed 1.6% and China’s Shanghai Composite Index fell 0.4%.
Overnight, the Dow Jones Industrial Average lost 0.72%, the S&P 500 fell 0.69%, and the Nasdaq Composite dropped 0.64%.
Some analysts anticipate businesses reporting slowing growth due to supply-chain snags and rising prices. They warned that this could lead to a drop in US stocks.
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