Expert's take on Market
"Nifty June series sentiment remains weak. Sell on rise advisable for the near term. Only a strong matured reversal will change the monthly outlook. Selective stocks are available at medium term value levels while broadly risk reward remains skewed. Liquidity remains the main reason behind the current corrective phase,"SahajAgrawal, Head of Research- Derivatives atKotakSecuritiessaid.
Stocks That Saw Short Build-Up
Market Update at 15:00
The benchmark indices erased all its previous day's gains and fell nearly 2 percent following weakness in global counterparts amid fear of faster policy tightening. Investors await US inflation data which is due later today.
The Nifty50 plunged 288 points or 1.75 percent to 16,190, and the BSE Sensex fell 1,053 points or 1.9 percent to 54,267, as all sectoral indices traded in red.
13 Stocks Saw Long Build-Up in the falling market
IIFL Finance Jumps 10%
IIFL Finance shares rallied more than 10 percent after the Abu Dhabi Investment Authority (ADIA) has picked up a 20 percent stake in its subsidiary IIFL Home Finance for Rs 2,200 crore.
The Abu Dhabi sovereign wealth fund will make the investment through a wholly-owned subsidiary, said IIFL Home Finance, which is among the largest affordable housing financiers with assets under management of Rs 23,617 crore.
IIFL Home Finance has entered into a definitive agreement for raising Rs 2,200 crore of primary capital for a 20 percent stake from a wholly-owned subsidiary of ADIA. The deal completion is subject to regulatory approvals, it said in a statement on Thursday.
Top Gainers and Losers in BSE Sensex
Europe Update
European markets fell more than one percent each after digesting European Central Bank's rate hike commentary and awaiting US inflation data due later today. European Central Bank hinted that it will hike interest rates by 25 bps in July policy meeting, followed by next in September.
Transformers and Rectifiers (India) Limited received an order for Rs 186 crore
Transformers and Rectifiers (India) Limited has been awarded orders of Transformers for total contract value of
Rs. 186 Crores from one of the State Utility. This order falls under the normal course of business. With this order, the Company’s Order book as on date stands at Rs. 1482 Crores.
Market at 2.00 PM
Indices tank more than 1.75%, Sensex trading lower by around 1000 points, Nifty below 16,200
The Sensex was trading lower by 1,021.7 points or 1.85% at 54,299 and the Nifty was lower by 284.2 points or 1.73% at 16,214.45. About 1185 shares have advanced, 2025 shares declined, and 140 shares are unchanged.
Source:BSE
Nifty IT Index lose the most, down 2.15 percent; Wipro & Tech M down more than 3 percent
Source:NSE
Fitch Revises Outlook on India to Stable, Affirms at 'BBB-'
Fitch Ratings has revised the Outlook on India's Long-Term Foreign-Currency Issuer Default Rating (IDR) to Stable, from Negative, and has affirmed the IDR at 'BBB-'.The Outlook revision reflects our view that downside risks to medium-term growth have diminished due to India's rapid economic recovery and easing financial sector weaknesses, despite near-term headwinds from the global commodity price shock. We expect robust growth relative to peers to support credit metrics in line with the current rating.High nominal GDP growth has facilitated a near-term reduction in the debt-to-GDP ratio, but public finances remain a credit weakness with the debt ratio broadly stabilising, based on our expectation of persistent large deficits. The rating also balances India's external resilience from solid foreign-exchange reserve buffers against some lagging structural indicators.
Market at 1.00 PM
Indices tank more than 1.5%, Sensex trading lower by around 950 points, Nifty around 16,200
The Sensex was trading lower by 952.7 points or 1.72% at 54,4372.6 and the Nifty was lower by 263.6 points or 1.6% at 16,214.45. About 1156 shares have advanced, 2010 shares declined, and 144 shares are unchanged.
Source: NSE
Santosh Meena, Head of Research, Swastika Investmart Ltd. on LIC
We believe India's highly underserved life insurance market is still in its infancy and is well-positioned to capitalize on the enormous growth potential. LIC has several competitive advantages, including a strong brand value, a massive network of agents, and an enviable distribution network. Further, the company has plans to address concerns with the company like low VNB margins, loss in market share, high reliance on agency channel, etc. Additionally, the company's issue was priced at a Price to Embedded Value of 1.1x, which was already at a discount compared to its global as well as Indian peers, and the current dip provides further valuation comfort. Another point we'd like to make is that investors should be aware that insurance is a long-term business; therefore wealth development and compounding occur only over time. One interesting observation that can be witnessed is that the low made on the first day of trade after the 30-day anchor investor’s lock-in period may act as strong support for a further rally for quality stocks. If fundamentals are strong it’s a good time to buy on such dips
Ravi Singh, Vice President & Head of Research, Share India on fall of LIC stock
LIC share prices may drop further till 700 levels and investors are advised earlier to exit their positions and wait for the turnaround of the sentiments. The high risk appetite investors may hold their positions. It is expected that in the long run, the business metrics of LIC will improve steadily. Investment done at lower levels will deliver good returns in the long term.
Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services on the fall of Rupee
Rupee hit its fresh all time low but in the last few sessions has been very resilient and is consolidating in a narrow range despite volatility in domestic and global equities and strength in the dollar against its major crosses. On the domestic front, RBI has been very actively intervening and curtailing the volatility for the rupee. Global crude oil prices have been rallying thereby putting pressure on inflation and leading to higher trade deficit. Dollar is getting support at lower levels ahead of US inflation number that will be released today and FOMC policy statement that is scheduled next week. Expectation is that the Fed could continue to raise rates and maintain its hawkish stance. We expect the USDINR (Spot) to trade with a positive bias and is gradually headed towards 78.50 levels. On the downside 77.20 will continue to act as an important support in the short term.
Sugar companies to benefit from additional charge on Ethanol from OMCs
OMCs have announced a relief scheme for sugar companies on Ethanol supplied between June 2022 and November 2022. Under this scheme OMCs will pay additional Rs 1.60/litre, Rs 1.49/litre and Rs 1.18/litre for Ethanol supplied from Sugarcane Juice, B-Heavy Molasses and C-Heavy Molasses route respectively. Also the prices of damaged food-grain ethanol & surplus rice based ethanol have also been increased by Rs 2.3 / litre and Rs 1.4 / litre respectively.
Experts are of the opinion that this will aid the growth in earnings of sugar companies and demonstrates the intent of the government to reach its ethanol blending target of 20% by 2025
Market at 12.00 Noon
Indices lose further ground, Sensex trading lower by around 850 points, Nifty around 16,250
The Sensex was trading lower by 839.65 points or 1.52% at 54,480.63 and the Nifty was lower by 229 points or 1.39% at 16,249.1. About 1163 shares have advanced, 1950 shares declined, and 135 shares are unchanged.
Source: BSE
Fitch Ratings forecasts India GDP to grow at 7.8% in FY23
Fitch Ratings forecasts India GDP to grow at 7.8% in FY23 compared to its previous estimate of 8.5 percent and forecasts a growth of around 7 percent between FY24 and FY27. It expects inflation to remain elevated at 6.9 percent during the current fiscal and expects the repo rate to reach 6.15 percent by FY24.
Short Build-ups
Market at 11.00 AM
Indices stuck in a range, Sensex trading lower by around 700 points, Nifty above 16,250
The Sensex was trading lower by 697.4 points or 1.26% at 54,622.85 and the Nifty was lower by 200.75 points or 1.22% at 16,280.45. About 1185 shares have advanced, 1842 shares declined, and 128 shares are unchanged.
Source : BSE
Morgan Stanley recommends 'equal weightage' to Kotak Mahindra Bank
Morgan Stanley recommends 'equal weightage' to Kotak Mahindra Bank after the private sector lender announced an increase in term deposit rates of 10-25bps. Peak 1-year deposit rate now 55bps higher than SBI vs almost equal a year back. The bank also announced higher savings deposit rates by 50bps for balances above Rs 50 lakh. The brokeage remain comfortable with a likely margin compression of 15 bps in FY23.
Atul Chaturvedi of Shree Renuka Sugars sees very strong demand for ethanol
See very strong demand for ethanol and 20% of revenue comes from ethanol currently, said, Atul Chaturvedi, Executive Chairman of Shree Renuka Sugars. The total investment made by the company in ethanol capacity will be closer to Rs 700 crore. The company is in the process of doubling its existing capacity of ethanol, after which the revenue from ethanol will rise to 30 percent. The oil marketing companies will have to pay Rs 1.5 per litre extra to ethanol suppliers between June to September 2022.
Shares of Shree Renuka Sugars were trading at Rs 51.6, down Rs 0.3 at 10:17 am on June 10
Teva settles patent dispute with Aurobindo Pharma
US affiliates of Israel-based Teva Pharmaceutical Industries Ltd on June 9 announced that they have reached an agreement with India's Aurobindo Pharma to resolve a legal patent infringement dispute regarding Teva’s Austedo medicine.The litigation in the United States will end and Aurobindo will have a licence to sell its Austedo generic product beginning April 2033.Austedo is the first and only US FDA (Food and Drug Administration)-approved product prescribed for adults for involuntary movements associated with the degenerative Huntington's disease, and for uncontrollable movements in the face, tongue or other body parts, known as tardive dyskinesia.Shares of Aurobindo Pharma were trading flat 0.19 percent down at Rs 528.85 at 10:03 am on June 10.
Market at 10.00 AM
Indices trade lower amid volatility, Sensex trading lower by more than 700 points, Nifty above 16,250
The Sensex was trading lower by 743.2 points or 1.34% at 54,577 and the Nifty was lower by 212.45 points or 1.29% at 16,265.65. About 998 shares have advanced, 1780 shares declined, and 129 shares are unchanged.
Source: BSE
Goldman Sachs recommends a 'buy' for Infosys
Goldman Sachs recommends a 'buy' for Infosys with a revised 12 month tarfer prices of Rs 1,703, implying 11% potential upside. The global investment bank believes Infosys remains the fastest growing large cap IT services company globally and it expect its revenue to grow at 16.6%/12.6% in CC terms over FY23E/24. Management commentary around its deal pipeline and demand remained strong in the recent analyst meet on 31st May'22. Key to watch for Infosys during Q1FY23 results (apart from annual guidance) would be the 3rd party software/hardware packaging cost which was at 7% of sales during Q4FY22 and the single biggest factor for its margin miss vs. both its own and consensus forecasts.
IT stocks likely to be in focus amid fears of 'stagflation'
IT stocks in focus after Tata Consultancy, the biggest software exporter, warned of a “stagflationary impulse” following the war in Ukraine and this leading to low growth and high inflation. Stocks like Tata Consultancy, Infosys, Wipro, Tech Mahindra, HCL Technologies may move.
Indian Rupee hits a fresh low against the USD
The Indian Rupees hits a fresh low against the USD in the early morning trade today. Experts had expected the Indian currency to open near a record low of 77.80 and expected it to trade in a range of 77.60 to 78.00 with a weakening bias. The Rupee was currently trading at 77.81. Experts suggest that higher than expected US inflation could again send US yields higher, equities lower and the US dollar higher against the DM and EM currencies. Against this backdrop, RBI's approach could suppress the aggressive volatility and rates. Overall, they expect the pair to face resistance near 77.80-77.85 levels. If it convincingly trades above this level then further move towards 78-78.10 can be expected. On flipside, 77.40-50 zone will act as a crucial short-term support.
Mohit Nigam, Head - PMS, Hem Securities
Benchmark Indices are expected to open on negative note as suggested by trends on SGX Nifty. US stock markets ended lower on Wednesday as investor anxiety heightened ahead of data on Friday that is expected to show consumer prices remained elevated in May. Selling picked up toward the end of the session. Mega-cap growth stocks led the drop, with Apple Inc and Amazon Inc falling 3.6% and 4.2%, respectively. Dow Jones was down by 638 points, whereas NASDAQ was down by 2.74% to 12269.0 levels.
Asian markets are trading on a negative note as Chinese inflation data for May came in largely in line with expectations. Investors also looked ahead to US CPI data which is going to be released today. Nikkei is trading 1.27% lower whereas Kospi is down by 1.34%. The European Central Bank raised its inflation projections once again on Thursday but cut its growth outlook as the conflict in Ukraine continues to weigh on confidence, consumption and investment.
On the technical front 16,100 and 16500 are immediate support and resistance in Nifty 50. For Bank Nifty 34400 and 35200 are immediate support and resistance respectively.
Citibank recommends a 'buy' for Adani Ports
The global investment bank Citibank recommends a 'buy' for Adani Ports stock, with a target price of Rs 981 a share after the company reiterated FY23 volume guidance of 350-360 million tons & it was observed that the underlying April/May volumes are inline with guidance
The management of the company also emphasized on being net FCF +ve, maintaining comfortable leverage ratio & investment grade rating. The management also intends to have a20-25% dividend payout ratio
Prashanth Tapse, Vice President (Research), Mehta Equities Ltd
Domestic equity markets may see a sharp fall in early Friday trades amid weakness across the global markets. Soaring inflation, recession fears, and the prospect of the Federal Reserve getting even more hawkish is making investors nervous worldwide. The negativity can also be attributed to yesterday’s weak session at European stock markets which closed sharply lower, with Germany’s DAX retreating 1.7% after the ECB set the path to start raising borrowing costs next month. ECB confirmed asset purchases will end from July 1st and a 25bps rate hike will follow in July as well. The U.S 10-year Treasury which has already doubled this year to roughly 3%, is expected to flirt with 4% by the end of 2022. Even if Nifty moves up, the overwhelming trend is down. Nifty’s immediate downside risk is seen at 16121 mark.
Escorts received all approvals to change its name to Escorts Kubota
Farm machinery and construction equipment maker Escorts said it has received requisite approvals for changing its name to Escorts Kubota Ltd.
The name change comes in the wake of Japan's Kubota Corporation increasing its stake in Escorts to 44.8 per cent by subscribing to new equity shares and through an open offer to the public shareholders of Escorts.Kubota has also become a joint promoter of the company along with existing promoters, the Nanda family, whose shareholding in the company remains unchanged.Nikhil Nanda continues to be the Chairman and Managing Director (CMD) of the company.In December last year, shareholders of Escorts Ltd had approved preferential allotment of nearly 94 crore shares to Kubota, as part of a deal, allowing it to become a joint promoter in Escorts.
Oil falls on demand worries over Shanghai's new partial lockdowns
Oil prices fell on Friday but still hovered near three-month highs, with fears over new COVID-19 lockdown measures in Shanghai outweighing solid demand for fuels in the world's top consumer United States. Brent crude futures for August was down $1.01, or 0.8%, at $122.06 a barrel as of 0141 GMT after a 0.4% decline the previous day. U.S. West Texas Intermediate crude for July fell 98 cents, or 0.8%, to $120.53 a barrel, having dropped 0.5% on Thursday.
Asian Markets Updates
FII and DII data
: Foreign institutional investors (FIIs) have net sold Rs 1,512.64 crore worth of shares, whereas domestic institutional investors (DIIs) remained net buyers to the tune of Rs 1,624.90 crore on June 9, as per provisional data available on the NSE.
US weekly jobless claims near five-month high
The number of Americans filing new claims for unemployment benefits increased to the highest level in nearly five months last week, but that likely does not mark a material shift in labour market conditions, which remain extremely tight. The report from the Labor Department on Thursday also showed unemployment rolls remained at a more than 52-year low at the end of May, underscoring the jobs market's strength.
IMF expects further cut in global growth outlook
The International Monetary Fund expects to further cut its forecast for global economic growth in 2022 next month, an IMF spokesperson said on Thursday, following moves by the World Bank and Organization for Economic Co-operation and Development (OECD) to cut their own forecasts this week.
That would mark the IMF's third downgrade this year. In April, the IMF had already slashed its forecast for global economic growth by nearly a full percentage point to 3.6% in 2022 and 2023.
Most rated companies have buffers to withstand further 10-15% rupee depreciation: Moody's
Moody's Investors Service on Thursday said most rated companies in India have buffers to withstand a further 10-15 percent depreciation of the rupee. The rupee depreciated by 8 paise to close at 77.76 against the US dollar on Thursday, weighed down by elevated crude oil prices and persistent foreign capital outflows.
In a statement, Moody's said the rupee has depreciated around 4.5 percent since the start of the year. Higher energy prices and interest rates in developed economies have led to capital outflows and rising commodity prices, pressuring the rupee.
SGX Nifty
: Trends on SGX Nifty indicate a gap-down opening for the broader index in India with a loss of 228 points. The Nifty futures were trading around 16,243 levels on the Singaporean exchange.
US Markets
US stocks sold off sharply Thursday as investor anxiety heightened ahead of data on Friday that is expected to show consumer prices remained elevated in May. Selling picked up toward the end of the session. Mega-cap growth stocks led the drop, with Apple Inc and Amazon.com Inc falling 3.6% and 4.2%, respectively, and putting the most pressure on the S&P 500 and the Nasdaq.
The Dow Jones Industrial Average fell 638.11 points, or 1.94%, to 32,272.79; the S&P 500 lost 97.95 points, or 2.38%, to 4,017.82; and the Nasdaq Composite dropped 332.05 points, or 2.75%, to 11,754.23.
