Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities:
Markets once again gyrated in a volatile trading session as investors are worried about the rising inflation and hawkish stance being undertaken by central banks world over.
Currently, the market is lacking conviction to bounce back although select bouts of recovery are not ruled out. Technically, after a sharp decline, the Nifty is consolidating in the range of 15700- 15850.
The short term formation is still on the weak side. And we are of the view that if the index slips below the level of 15700, it could hit 15600-15550 levels. On the flip side, 15850 would act as an immediate hurdle for the bulls. Above which it could move up to 15950-16000.
Ajit Mishra, VP - Research, Religare Broking:
Markets ended marginally lower in a volatile trading session, in continuation of the prevailing trend. After the soft start, the benchmark made multiple attempts to recover but selling pressure in heavyweights capped the upside till the end. Eventually, the Nifty index ended lower by 0.3% to close at 15,732 levels. Meanwhile, the sectoral indices traded mixed, Oil & Gas, Metal and Auto ended with losses whereas Realty and IT ended with gains. The broader markets too ended with similar losses.
Markets are witnessing pressure ahead of the crucial US Fed meet outcome scheduled on Wednesday. Given the inflation data at a 40-year high in the US, expectations of 75 bps hike have increased.
We thus reiterate our cautious view on markets and suggest limiting leveraged position ahead of the event.
Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities:
The Bank Nifty index ahead of the FOMC meeting is trading near a major make-or-break zone. The index is still trading in a downtrend and if fails to sustain the level of 33,000 on a closing basis will lead to further selling pressure.
The upside momentum to resume, the index has to close above the level of 34,000 where the height of open interest is built up on the call side.
Vinod Nair, Head of Research at Geojit Financial Services:
Domestic market restrained from heavy sell-off as CPI data moderated on MoM basis and this had a calm down effect amidst global volatility.
However, elevated WPI data continued to dominate the broad market, which is cautious awaiting tomorrow’s outcome of Fed policy.
Earlier the global market was anticipating a 50bps hike but now is worried about a higher rate hike due to persistent US inflation.
Rupak De, Senior Technical Analyst at LKP Securities:
The Nifty started the day on a negative note on Tuesday and remained mostly sideward during the day. On the lower end, it found support at the historical swing low and before closing a bit higher.
The daily RSI is in the bearish crossover. The trend is likely to remain sideward in the short term. On the lower end, support is visible at 15,650. On the higher end, resistance is placed at 15,900/16,000.
Rupee Close:
Indian rupee ended marginally higher at 77.99 per dollar versus Monday’s close of 78.03.
Market Close
Indian benchmark indices ended lower in the volatile session on June 14 with Nifty below 15,750.
At close, the Sensex was down 153.13 points or 0.29% at 52,693.57, and the Nifty was down 42.30 points or 0.27% at 15,732.10. About 1506 shares have advanced, 1730 shares declined, and 132 shares are unchanged.
Bajaj Auto, IndusInd Bank, Hindalco Industries, ONGC and Tech Mahindra were among the top Nifty losers, while gainers were NTPC, M&M, Bharti Airtel, Apollo Hospitals and Divis Labs.
Among sectors, auto, metal and oil & gas ended in the red, while capital goods, power and realty indices ended higher.
The BSE midcap and smallcap indices ended marginally lower.
Bajaj Auto board defers share buyback plan
The board of Bajaj Auto, which held a meeting on June 14, decided to defer the share buyback plan which was brought before it for consideration.
The company, in a regulatory filing, said it will not move ahead with the proposed plan as of now as it requires "further deliberations".
Nifty PSU Bank index shed 0.5 percent dragged by the Central Bank of India, Bank of India, Union Bank of India
Market at 3 PM
Benchmark indices were trading lower in the final hour of trading with Nifty around 15700.
The Sensex was down 185.99 points or 0.35% at 52660.71, and the Nifty was down 56.40 points or 0.36% at 15718. About 1404 shares have advanced, 1713 shares declined, and 117 shares are unchanged.
Today’s Stock Market Action
Hardwyn India board approves bonus issue
Hardwyn India board has approved the issue of one bonus share for every two shares held by shareholders as on record date.
Hardwyn India was quoting at Rs 221.00, down Rs 3.00, or 1.34 percent.
Dollar pauses near 20-year highs after historic bond rout
The U.S. dollar consolidated gains near a 20-year peak on Tuesday while its rivals from the Aussie to the euro nursed steep losses as traders braced for aggressive interest rate hikes from the Federal Reserve this week.
Stagflation fears surge and ‘sentiment is dire’ in BofA survey
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Investor fears of stagflation are at the highest since the 2008 financial crisis, while global growth optimism has sunk to a record low, according to Bank of America Corp.’s monthly fund manager survey.
Global profit expectations also dropped to 2008 levels, with BofA strategists noting that prior troughs in earnings expectations occurred during other major Wall Street crises, such as the Lehman Brothers bankruptcy and the bursting of the dotcom bubble.
BofA’s survey, which included 266 participants with $747 billion under management in the week through June 10, ended before the US inflation data on Friday “shattered” hopes of the Federal Reserve pausing its aggressive cycle of rate hikes, according to strategists led by Michael Hartnett.
European Markets Updates
Motilal Oswal on State Bank of India
: State Bank of India has delivered a strong FY22 propelled by steady business / revenue growth and controlled provisions. Management expects the momentum to remain healthy as utilization levels improve, while Retail growth is likely to remain steady. A higher mix of floating loans and CASA mix will support margin in a rising interest rate environment. Asset quality performance has been strong and the outlook remains healthy as restructured book remains in control at 1.1%, while the SMA pool has declined further to 13bp of loans.
We conservatively estimate credit cost to moderate to 0.9%, enabling 28% earnings CAGR over FY22-24. We thus expect SBI to deliver an RoA/RoE of 0.9%/16.7% in FY24, respectively. It remains our top buy in the sector with a target of Rs 600 (premised on 1.2x FY24E ABV + Rs 195 from subsidiaries)
Tapan Patel, Senior Analyst (Commodities), HDFC Securities
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Crude oil prices traded higher with benchmark NYMEX WTI crude oil prices rose by 0.72% to $121.80 per barrel. Crude oil prices rose about $1 in volatile trade on Tuesday as tight global supplies outweighed worries that fuel demand would be hit by a possible recession and fresh COVID-19 curbs in China. The market will be awaiting weekly US inventory data from the American Petroleum Institute on Tuesday and the US Energy Information Administration on Wednesday for a view of how tight crude and fuel supply remain.
We expect crude oil prices to trade sideways to up with resistance at $125 per barrel with support at $118 per barrel. MCX Crude oil June contract has important support at Rs 9350 and resistance at Rs 9670 per barrel.
Market update at 2 PM: Sensex is down 100.79 points or 0.19% at 52745.91, and the Nifty shed 24 points or 0.15% at 15750.40.
BSE Capital goods index rose 0.6 percent led by the Thermax, Bharat Electronics, Elgi Equipments
Dhruv Consultancy Services bags consultancy services project
Dhruv Consultancy Services has secured letter of award for consultancy services project as authority's engineer for supervision of road project (four laning of Vairengte- N Kawnpui section) in Mizoram on EPC mode. The contract price for the said project will be Rs 11.2 crore.
Dhruv Consultancy Services was quoting at Rs 48.55, up Rs 0.65, or 1.36 percent.
D.R.E. Reddy, CEO and Managing Partner at CRCL LLP:
The wholesale inflation has continued to grow in the double digits. At 15.88 percent, which is mostly attributed to rise in the cost of mineral oils, natural gas, and other commodities as compared to the same month in the previous year. Higher crude oil prices and input costs still weigh on the producers and pass-through has resulted in pushing the retail inflation higher.
This move also implies that manufacturers are recovering their pricing power, which was weakened due to the pandemic. A good monsoon and ease in tension will assist to lower WPI inflation within the following months, also leading to crude oil prices ultimately putting downward pressure on inflation at large.
UBS View On Star Health & Allied Insurance Company:
Brokerage firm UBS has initiate sell rating on Star Health & Allied Insurance Company with a target at Rs 660 per share.
The profitability improving but lag multiliners. The health insurers' investment income not enough to make up for lower underwriting profit.
The company should trade at a lower valuation multiple than multiliners, reported CNBC-TV18.
Marine Electricals receives order worth Rs 10.65 crore
Marine Electricals received an order from Naval Ship Repair Yard, Kochi amounting to Rs 10.65 crore (excluding GST).
Marine Electricals India was quoting at Rs 27.95, up Rs 0.15, or 0.54 percent on the BSE.
Market at 1 PM
Benchmark indices were trading lower in the volatile session with Nifty below 15800.
The Sensex was down 165.51 points or 0.31% at 52681.19, and the Nifty was down 35.20 points or 0.22% at 15739.20. About 1648 shares have advanced, 1408 shares declined, and 115 shares are unchanged.
orrent Power completed acquisition of 50 MW solar power plant from SkyPower Group
T
Torrent Power has completed acquisition of 50 MW solar power plant from SkyPower Group, in Telangana.
Enterprise value for this acquisition is Rs 416 crore.
Long-term power purchase agreement (PPA) for the project is with Northern Power Distribution Company of Telangana (NPDCTL) for a period of 25 years at a fixed tariff of approximately Rs 5.35 per kWh, with remaining useful life of approximately 20 years.
Macquarie view on Zomato
Research house Macquarie has initiate with underperform rating on Zomato with a target at Rs 55 per share.
Research house expect company to maintain its dominant position in large food delivery market.
The growth concern is corroborated with ongoing soft Apptopia metrics. However, despite 60% share price decline, see further downside, reported CNBC-TV18.
Nifty Auto index rose 0.7 percent led by the Tube Investments Of India, Ashok Leyland, M&M
JUST IN | May WPI Inflation stood at 15.88% against 15.08%, MoM.
HDFC Mutual Fund acquired additional 2.15% stake in Delta Corp
HDFC Mutual Fund acquired additional 2.15 percent equity stake in Delta Corp via open market transactions on June 10.
With this, its shareholding in the company stands increased to 9.21 percent, up from 7.06 percent earlier.
Market at 12 PM
Benchmark indices were trading higher with Nifty above 15800.
The Sensex was up 113.20 points or 0.21% at 52959.90, and the Nifty was up 43.80 points or 0.28% at 15818.20. About 1945 shares have advanced, 1077 shares declined, and 103 shares are unchanged.
Rajnish Wellness' board approves sub-division of equity shares
Rajnish Wellness' board of directors in their meeting held on 13th June 2022 have approved the sub-division/split of equity shares of the company from 1 (One) equity share of Rs 10 (Rupees Ten only) each to 5 (Five) equity shares of Rs 2 (Rupees Two only) each. Such sub-division/split will be subject to the approval of shareholders and other statutory approvals as may be required.
Nifty Metal index gained nearly 2 percent supported by the Adani Enterprises, Hindustan Copper, SAIL
BSE Realty index rose over 1 percent supported by the DLF, Oberoi Realty, Indiabulls Real Estate
WPIL bags Rs 430.87 crore order from Government Of West Bengal
WPIL has received an order from the Government of West Bengal for execution of a Turnkey Project for an aggregate value of Rs 430.87 crore to be completed over a period of 24 months.
Madhavi Arora, Lead Economist, Emkay Global Financial Services:
The high frequency mandi prices so far depict some respite in sequential gains. On the other hand, the cereal prices have remained contained helped by policy intervention to regulate exports, which along with modest MSP hikes, should cap the potential for sharp upsides in the price of the staples. This along with the some cuts in import duties on a few imported food products, moderation in vegetable oil prices globally should help ease domestic edible oil prices months ahead.
Nonetheless, the RBI expects CPI to average 7.5% in the current quarter, which is currently slightly higher than what we currently anticipate. Overall rising price pressures remain a policy concern and are likely to pressure MPC further.
The triple whammy of commodity-price shocks, supply-chain shocks and resilient growth, has shifted the reaction function in favour of inflation containment. While August may see another front-loaded hike of 25bps+, FY23 could see overall rates go up by another 75bps+.
The terminal policy rate may be around 5.75%, while net liquidity tightening to 2% of NDTL is tantamount to another estimated 25bps effective rate hike.
LIC acquires additional 2% stake in Capri Global at an average price of Rs 624.61 per share.
Market update at 11 AM: Sensex is up 110.50 points or 0.21% at 52957.20, and the Nifty added 39.30 points or 0.25% at 15813.70.
Nifty Information Technology index gained nearly 1 percent led by the L&T Technology Services, Mindtree, L&T Infotech
Vivek Rathi, Director-Research Knight Frank India
India’s consumer inflation moderated to 7% supported by the government measures undertaken to curb domestic fuel and food prices in May 2022. However, the inflation levels are still above the RBIs’ upper limit of 6%.
The narrowing gap between WPI and CPI further highlights the pass through of input costs rise from producers to consumers; as evident in elevated core inflation of 6.2%; which is still high; albeit with slight moderation.
In the coming months, the spillovers from global commodity and food prices would continue to add stress to domestic prices. We thus, do not see India’s inflation cooling down in the near term and in such a scenario maintaining the strength of domestic demand will be crucial from policy perspective.
BSE Power index added 1 percent supported by the Adani Power, Adani Transmission, NHPC
TCNS Clothing was quoting at Rs 553.00, up Rs 34.60, or 6.67 percent. It was trading with volumes of 7,221 shares, compared to its five day average of 6,587 shares, an increase of 9.63 percent.
Adani and TotalEnergies entered into a new partnership
Adani and energy supermajor TotalEnergies of France, have entered into a new partnership to jointly create the world’s largest green hydrogen ecosystem.
In this strategic alliance, TotalEnergies will acquire 25% minority interest in Adani New Industries Ltd (ANIL) from Adani Enterprises Ltd (AEL).
Buzzing
G R Infraprojects share price fell over 7 percent on June 14, plunging over 17 percent since yesterday after reports said that the Central Bureau of Investigation (CBI) conducted searches at several locations of the company in Shillong, Guwahati, Gurgaon, and Bangalore.
The raids were conducted in connection with alleged irregularities in a national road highway project in Assam, as per the reports.
GR Infra said in an exchange filing on June 13 that some of their employees at a project site have been arrested by the Central Bureau of Investigation (CBI).
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
The sharp cut in US markets on Monday has pushed the S&P 500 into bear market territory. With the Nasdaq already in bear market territory, markets are likely to remain weak with occasional relief bounces.
The sharp decline in the US markets was triggered by a WSJ article indicating a 75 bp hike by the Fed in its Wednesday meeting. Now, the majority view is that the Fed will have to hike aggressively with a couple of 75 bp rate hikes to contain inflation and establish its credibility.
CPI inflation in India in May coming at 7.04%, down from 7.8% in April, is good news that inflation is not getting out of control. So, RBI need not hike aggressively like the Fed.
Financials, particularly leading private sector banks, have the potential to give market beating returns for investors with a one-year perspective. Defenses like leading FMCGs are safe bets.
Market at 10 AM
Benchmark indices erased most of the opening losses and trading flat amid volatility.
The Sensex was down 60.77 points or 0.11% at 52785.93, and the Nifty was down 14.20 points or 0.09% at 15760.20. About 1660 shares have advanced, 1087 shares declined, and 109 shares are unchanged.
Keystone Realtors files draft documents for Rs 850 crore IPO
Mumbai-based Rustomjee Group firm Keystone Realtors has filed draft papers with the Securities and Exchange Board of India to raise up to Rs 850 crore through an initial public offering.
The share sale comprises a fresh issue of Rs 700 crore and an offer for sale of up to Rs 150 crore by promoters and shareholders.
Buzzing:
Dynamatic Technologies share price rose more than 9 percent on June 14 after company won a contract to manufacture the Escape Hatch Door for Airbus A220 aircraft.
The contract was placed by recently established STELIA AERONAUTIQUE CANADA Inc, a subsidiary of Airbus Atlantic SAS.
This contract marks a milestone of workshare of the A220 supply chain in India and extends Dynamatic's capabilities for manufacturing critical aerostructure to Airbus, company said in its press release.
