Closing Bell: Nifty ends below 17,800, Sensex falls 335 points; Adani Ports gains 9%

Ajit Mishra, VP - Technical Research, Religare Broking

Markets started the week on a subdued note and lost nearly half a percent, tracking feeble global cues. After the initial dip, the Nifty index hovered in a narrow range till the end and finally settled at 17764.60 levels. Meanwhile, a mixed trend on the sectoral front and selective buying on the broader front kept the participants busy.

The recent price action on the benchmark front indicates uncertainty among the participants and that might continue in the near term.

Traders should thus maintain their focus more on identifying opportunities in the sectors that are showing resilience. However, it’s easier said than done as we’re seeing restricted participation. Also, managing overnight risk is equally important citing the prevailing volatile scenario.

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas

The Nifty opened on a negative note on February 06 & moved lower in the beginning of the session. However, the key hourly moving averages offered support on the downside & restricted further downside.

Consequently, the index traded in a sideways manner as the day progressed & ultimately formed an Inside bar on the daily chart. Going ahead, 17,700 & 17,870 are key support & resistance respectively.

The index has a potential to stretch towards the 18,000 mark as long as it stays above 17,700.

Vinod Nair, Head of Research at Geojit Financial Services

A strong job market in the United States pushed the global market lower on rate hike fears, as it offers the Fed more leeway in enacting stricter policy measures. This was in contrast to the recent rally in the global indices on the expectation that the economy is in its last phase of policy tightening.

RBI’s policy announcement on Wednesday will provide more colour on its future rate actions, which is expected to hike rate by 25bps.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities

While the sentiment has been sluggish over the past week or so, today's fall can be attributed to weak Asian cues and cautious approach from the investors ahead of the RBI's credit policy.

Selling seemed to have been triggered by further strengthening of dollar against the rupee, leading to weakness in metal, power & select banking stocks.

Moreover, markets may continue to witness bouts of intra-day volatility due to lack of any fresh positive triggers in the global arena.

Technically, the Nifty hovered between 17,700 to 17,800 price range. On daily charts the index has formed a small inside body bearish candle which is indicating the continuation of a non-directional activity in the near future.

For Nifty, 17,700 would be the key support level and below the same the index could slip till 17,600-17,520. On the flip side, a fresh rally is possible only after the dismissal of 17,825 and above the same, the index could rally till 17,900-17,925.

FPI selling in Indian stock hits 7-month high on rich valuations, Adani rout

Foreign portfolio investors (FPIs) offloaded Indian equities worth 288.52 billion rupees ($3.51 billion) in January, the most since June, data from National Securities Depository Ltd. showed.

The selling coincided with a slide in equity benchmarks, with Nifty 50 falling 2.45% in the first month of 2023.

Analysts cited multiple reasons - the uncertainties due to a sharp selloff in Adani group stocks after a Hindenburg Research report flagged concerns over the conglomerate's financials, expensive valuations of Indian shares over their global peers, reallocation of funds to China and Taiwan for their relatively cheaper valuations, and Beijing's reopening, easing COVID-19 controls.

Rupee Close:

Indian rupee closed 90 paise lower at 81.73 per dollar against previous close of 81.83.

Adani Transmission Q3 Results

Adani Transmission has reported 77.8 percent jump in its Q3FY23 net profit at Rs 474.7 crore against Rs 267 crore and revenue was up 22% at Rs 3,551.7 crore versus Rs 2,911.7 crore, YoY.

Adani Transmission was quoting at Rs 1,261.40, down Rs 140.15, or 10 percent.

Market Close

: Benchmark indices ended lower on February 6 with Nifty below 17,800.

At Close, the Sensex was down 334.98 points or 0.55% at 60,506.90, and the Nifty was down 89.40 points or 0.50% at 17,764.60. About 1850 shares have advanced, 1653 shares declined, and 185 shares are unchanged.

Divis Laboratories, Hindalco Industries, JSW Steel, Tata Steel and Kotak Mahindra Bank were among the biggest losers on the Nifty, while gainers were Adani Ports, IndusInd Bank, BPCL, Hero MotoCorp and Apollo Hospitals.

On the sectoral front, metal and power indices shed 1-2 percent, while capital goods, FMCG and realty up 0.5 percent each.

The BSE midcap index added 0.7 percent and smallcap index rose 0.5 percent.

Adani Ports gains 9 percent ahead of December quarter earnings:

Dollar steady

The dollar held firm against the euro on Monday, with traders taking the view the U.S. Federal Reserve will likely lift its benchmark rate above 5% and keep it there to squeeze inflation after data showed the labour market remains strong.

An earthquake in central Turkey and northwest Syria and a strong U.S. dollar added pressure on emerging currencies sending Turkey's lira to a record low of 18.85 against the dollar.

CLSA View On Vodafone Idea

-Sell rating, target at Rs 6 per share
-Government will own 33 percent of company on conversion of interest to equity
-Vodafone group will hold 31.7 percent & Birla Group will hold 18.2 percent
-Government is reportedly converting interest dues after receiving commitment from promoters
-Government is converting interest dues to run the company and bring in necessary investment
-Believe company will still be in crisis to fund annual spectrum payments beyond 4-year moratorium
-Believe company will be in crisis unless ARPU reaches Rs 300, reported CNBC-TV18.

Intellect Design Arena Q3 profit drops 38.5% 

Intellect Design Arena has recorded a consolidated profit at Rs 62 crore for quarter ended December FY23, down 38.5% compared to corresponding period last fiscal, impacted by weak operating performance. Revenue for the quarter at Rs 547 crore increased by 7.6% over a year-ago period.

At the operating level, EBITDA fell 27.3% YoY to Rs 97 crore and margin dropped 850 bps YoY to 17.68% for the quarter on increase in employee expenses.

Intellect Design Arena was quoting at Rs 420.80, down Rs 15.75, or 3.61 percent.

Mohammed Imran, Research Analyst at Sharekhan by BNP Paribas

WTI march futures showing some recovery on Monday to trade around $73.80 up by 0.5% at start of European trading session, after nearly loosing 8% in value over the week ending 3 February amid slowdown down fear from US and Eurozone along with some patchy recovery from China.

Elsewhere the headwind for oil comes from the Russian supplies withstanding another sanctions from EU ahead. The economic data from US signals least possibility of recession the world largest economy, but the Q1 slowdown in US and Eurozone will hamper oil demand during the quarter.

In the absence of major economic data today, oil prices likely to consolidate further, we see prices touching the support of $72 for the day, any significant recovery in oil will only come from positive news from China. We advise traders to sell into rallies as prices could look for $70 support in near term trading sessions.

Market at 3 PM

Benchmark indices were trading lower with Nifty at 17750.

The Sensex was down 336.67 points or 0.55% at 60505.21, and the Nifty was down 90.50 points or 0.51% at 17763.50. About 1727 shares have advanced, 1608 shares declined, and 174 shares are unchanged.

Buzzing

Engineers India has reported a 60.4% year-on-year decline in consolidated profit at Rs 16.1 crore for three-month period ended December FY23, dented by weak operating performance.

There was an increase in technical assistance, and construction materials & equipments expenses.

Revenue from operations at Rs 842.2 crore for the quarter grew by 22% over a year-ago period.

Engineers India was quoting at Rs 79.10, down Rs 4.40, or 5.27 percent.

Shankara Building Products Q3 Results:

The company has reported net profit at Rs 16.4 crore versus Rs 3.5 crore and revenue was up 84.7% at Rs 1,080.4 crore versus Rs 585 crore, YoY.

Nirmal Bang View on Bank of Baroda

The brokerage house maintained the 'buy' rating on the stock with a target price of Rs 225.

The company continued to report strong earnings growth on the back of margin expansion, higher treasury income and improving asset quality matrix. The management expects overall credit growth to be 14-16 percent for FY23.

The bank continued to focus on margin enhancement and the management indicated that overall NIM is likely to sustain around current levels going forward.

It indicated that there are no concerns on the bank’s exposure to the Adani Group and the same is well within the regulatory framework.

Bank Of Baroda was quoting at Rs 167.85, up Rs 4.20, or 2.57 percent.

Prabhudas Lilladher view on SBI

The broking house retained the ‘buy’ tag on the stock with a target price of Rs 730.

There is no major change in core earnings for FY23/24/25.

Bank sees FY24 loan growth at 14-16 percent. Slower deposit growth may not be an issue in near term, as there is excess SLR of Rs 3.2 trillion.

Adani group exposure is 0.88 percent of total loans. Till date, there have been no repayment issues, as loans are backed with cash generating assets and no finance is extended against promoter’s equity.

State Bank of India was quoting at Rs 546.30, up Rs 1.85, or 0.34 percent.

Vinati Organics Q3

Net profit was up 8.1% at Rs 163.6 crore against Rs 148.3 crore (YoY). Revenue went down 10.2% at Rs 508.6 crore against Rs 566.3 crore (YoY). EBITDA was up 10.3% at Rs 163.6 crore against Rs 148.3 crore (YoY). Margin at 32.2% against 26.2% (YoY). The stock was quoting at Rs 1,909.30, up Rs 43.20, or 2.31 percent on BSE. It has touched an intraday high of Rs 1,931.40 and an intraday low of Rs 1,866.25.

Reliance Industries, Ashok Leyland unveil Hydrogen IC Engine (H2-ICE) powered truck at IEW

Visaka

Visaka Industries has posted 86 percent fall in its Q3 net profit at Rs 3.35 crore versus Rs 24 crore and revenue was up at Rs 356.5 crore against Rs 354.1 crore, YoY.

Visaka Industries touched 52-week low of Rs 394 and quoting at Rs 403.05, down Rs 9.25, or 2.24 percent on the BSE.

Nirmal Bang View on ITC

The brokerage house upgraded the stock to 'buy' with revised target price of Rs 465 from Rs 385.

Rural demand did see a sequential improvement, it continues to remain relatively subdued, it observed.

Changes to the model have led to 6.3 percent/6.2 percent/5.5 percent upward revision in FY23/FY24/FY25 EPS.

Considering strong return ratios and consistent delivery by the company, the broking house is increasing its valuation multiple by 15 percent to 26.5x on September 2024 EPS.

USFDA inspection underway at Cipla's Indore facility, quoting Sources reported CNBC-TV18.

Cipla was quoting at Rs 1,024.40, up Rs 1.40, or 0.14 percent.

Market at 2 PM

Benchmark indices erased some of the intraday losses but still trading lower with Nifty around 17800.

The Sensex was down 285.43 points or 0.47% at 60556.45, and the Nifty was down 79.50 points or 0.45% at 17774.50. About 1779 shares have advanced, 1526 shares declined, and 174 shares are unchanged.

Unichem

Unichem Laboratories has posted net loss of Rs 63.9 crore versus loss of Rs 14.1 crore and revenue was down 3.5% at Rs 302.5 crore versus Rs 313.2 crore, YoY.

Unichem Laboratories was quoting at Rs 313.50, up Rs 0.75, or 0.24 percent on the BSE.

Adani

s

Adani promoters have posted the amounts to prepay USD 1,114 million of share backed facility ahead of its maturity of Sep 2024.

With the repayment of such amount, 27.56 million shares, (3% of promoters’ holding) of Adani Green Energy shall be released in due course.

Also, Adani Transmission promoter to release pledge on 11.77 million shares (1.4% equity) and Adani Ports promoter to release pledge on 168.27 million shares (12% equity)

Buzzing

Orient Paper & Industries has reported profit at Rs 39.5 crore for October-December period of FY23 against loss of Rs 3.5 crore, driven by healthy operating performance and topline. Revenue for the quarter grew by 54.2% YoY to Rs 253.1 crore.

At the operating level, EBITDA surged to Rs 68.8 crore for the quarter against Rs 1.2 crore in year-ago period with margin expansion of 2,650 bps to 27.2% in Q3FY23 YoY.

Kolte-Patil Developers Q3 Results

Kolte-Patil Developers has posted net loss at Rs 26.9 crore in the quarter ended December 2022 versus profit of Rs 5.4 crore and revenue was up 53.2 percent at Rs 368.1 crore versus Rs 240.3 crore, YoY.

Nifty PSU Bank index rose 0.5 percent supported by Bank of Baroda, Union Bank of India, Indian Overseas Bank

Buzzing

Thyrocare Technologies share price fell more than 3 percent as company recorded a 31.6% year-on-year decline in profit at Rs 14.7 crore for October-December period of FY23, dented by fall in operating income and margin. Revenue for the quarter grew by 9.1% YoY to Rs 128 crore.

Suven Pharmaceuticals Q3 Results:

Suven Pharmaceuticals has posted 32.5 percent fall in its Q3FY23 net profit at Rs 108 crore versus Rs 160 crore and revenue was down 9.7% at Rs 353.7 crore versus Rs 391.6 crore, YoY.

JPMorgan View On Tata Power

-Neutral rating, target at Rs 200 per share
-Q3 broadly in-line; Q4 & beyond lacks visibility
-PAT doubled in Q3 with coal mine profit growth
-Pass thru tariff at Mundra included recovery of past dues as expected
-Q4 outlook remains uncertain as tariff order applied till Dec 31, model a drop in profit
-Regulated T&D business saw some impact due to collection volatility in Odisha
-Solar EPC profit in-line despite lower execution, renewable gencos, reported CNBC-TV18.

Manappuram Finance Q3 eranings:

Manappuram Finance has registered a massive 50.3% year-on-year growth in profit at Rs 392.2 crore for quarter ended December FY23 as impairment on financial instruments dropped by Rs 54 crore for the quarter.

Revenue from operations for the quarter at Rs 1,714 crore increased by 15.5% over a year-ago period.

Manappuram Finance was quoting at Rs 114.90, down Rs 1.20, or 1.03 percent.

Dollar steady after robust US jobs data, yen wobbles

The dollar held firm on Monday after a strong US jobs report suggested the Federal Reserve could stay hawkish for longer, while the yen was hit by news that Bank of Japan Deputy Governor Masayoshi Amamiya was being sounded out to be the next governor.

The yen weakened 0.42% to 131.75 per dollar, having touched three-week lows of 132.60 earlier in the session.

Aarti Industries Q3 profit tanks 81%

Aarti Industries has recorded a 81.3% year-on-year decline in profit at Rs 135.2 crore for three-month period ended December FY23 as revenue fell by 20.5% to Rs 1,635 crore and EBITDA dropped 68% to Rs 286 crore with 2,580 bps contraction in margin compared to year-ago period.

Market at 1 PM

Indian benchmark indices were trading lower but Nifty still holding above 17,700.

The Sensex was down 376.19 points or 0.62% at 60465.69, and the Nifty was down 113.30 points or 0.63% at 17740.70. About 1752 shares have advanced, 1508 shares declined, and 184 shares are unchanged.

Nifty Information Technology index declined 0.7 percent dragged by Infosys, Wipro, HCL Technologies

United Drilling Tools signs license agreement with Interpipe

United Drilling Tools has signed a license agreement with Interpine Ukraine LLC to cut premium thread on full length casing and tubing pipes in India.

United Drilling Tools was quoting at Rs 237.50, up Rs 13.90, or 6.22 percent.

The bulk of product market and external reforms have been done in the last 20-30 years. So what needs to be done happens to be incremental: V Anantha Nageswaran, Chief Economic Adviser.

Rahul Bajoria, MD & Head of EM Asia (ex-China) Economics, Barclays

We expect CPI inflation to have remained broadly steady in January, as falling vegetable prices and PDS cereal price changes keep food costs on a downward trajectory, while core remains sticky.

With inflation within the RBI’s target range for three months, we expect the MPC to deliver a final hike on 8 February.

JK Tyre Q3 Earnings:

JK Tyre & Industries has reported a 15.2% year-on-year growth in consolidated profit at Rs 65.6 crore for quarter ended December FY23, with EBITDA growing 24% YoY to Rs 339 crore with margin expansion of 50 bps.

Revenue from operations at Rs 3,613 crore for the quarter grew by 17.5% compared to year-ago period.

Rupee Updates:

Indian rupee is trading lower by 63 paise at 82.46 per dollar versus Friday's close of 81.83.

BSE Auto index shed 0.5 percent dragged by Tube Investments of India, Eicher Motors, M&M

Apurva Sheth, Head of Market Perspectives & Research, SAMCO Securities:

We believe that RBI will go slow with the rate hikes now since inflation is at 5.72% below the upper tolerance limit of 6%. The US Fed has also slowed its pace of interest rate hikes with a 25 bps hike recently.

With a benign outlook on global inflation central banks across the world have now reduced their pace of rate hikes. RBI was amongst the first central banks to hike interest rate to tame inflation can probably be the first one to stop hiking them too.

We believe that RBI will hike rates by another 25 bps in February meeting. This will push the rates to a seven year high of 6.5%. RBI will go with a wait and watch approach after this meeting and slowly shift focus on growth.

Coforge partners with Transcard to help insurers automate their disbursements and collections

Coforge announced a new partnership with Transcard, a global leader in payments and data technology.

As a Transcard value-added reseller, Coforge will leverage Transcard’s suite of embedded payments solutions. Coforge and Transcard will address the payment challenges faced by insurers and other organizations, driving impact for clients by providing an all-in-one solution for disbursing and collecting payments of any type.

Coforge was quoting at Rs 4,336.40, up Rs 29.30, or 0.68 percent on the BSE.