Sensex, Nifty Fall For Second Week In A Row As Fed Spurs Slide In Global Equities; FPIs Stay Net Sellers
Live updates from India's equity markets on Sept. 23.
KEY HIGHLIGHTS
Closing Bell
India's stock benchmarks declined for the third day in a row, logged worst day in a week and extended losing streak for the second week.
The Sensex and Nifty 50 gained in the first two sessions of the week before falling in each of the last three sessions, with the decline intensifying towards the end of the week after Federal Reserve announced 75bps rate hike and provided hawkish commentary.
Realty, PSU Banks, Banking, Metal stocks decline while FMCG and Pharma indices rose in a volatile week.
On Friday, Sensex lost 1,021 points (1.73%), worst day in a week to 58,098.92.
The Nifty 50 shed over 300 points (1.72%) to 17,327.35. Today 45 of Nifty 50 stocks fell while only five gained (Divi's Labs, Sun Pharma, Tata Steel, Cipla, ITC).
Power Grid, Apollo Hospitals, Hindalco, Adani Ports, SBI were the top losers.
The broader indices underperformed their larger peers, with MidCap gauge losing 2.3% and SmallCp shedding 1.9%. All 19 sectoral indices compiled by BSE declined with Power and Utilities index falling nearly 3.5%.
The market breadth is skewed in the favour of bears. About 984 stocks rose, 2,494 fell and 109 remained unchanged.
Foreign Investors Net Sellers
Overseas investors remained net sellers for the third day in a row, on Friday.
As per data from the National Stock Exchange, foreign portfolio investors net sold equities worth Rs 2,899.68 crore today.
Domestic institutional investors, remained net buyers for the third straight day and bought equities worth Rs 299.1 crore today.
Institutions have net sold Rs 4469.34 crore worth of equities this month so far and Rs 37,952.42 crore worth of Indian equities till date in 2022.
10-Year Bond Yield Rises
Yield on the 10-bond rose 8bps to 7.40%, during the session,before closing at 7.39%.
Source: Bloomberg
Rupee Slides To Fresh Low
Rupee depreciated 40 paise to record low 81.26, during the session.
The Indian currency closed at 80.99.
Source: Bloomberg
IOL Chemicals Gains In A Weak Market
Shares of IOL Chemicals and Pharmaceuticals jumps nearly 7% in a weak market before paring most of the gains.
Trading volume on the Punjab-based API, organic chemicals maker's stock is more than thrice the 30-day average.
The company approved investing $ 2.1 million in USpharma Ltd.The Board of Directors on September 22nd approved to invest $ 2.1 Million in USpharma Limited. The investment is subject to compliance with Foreign Exchange Management (Overseas Investment) Rules, 2022 and Foreign Exchange Management (Overseas Investment) Regulations, 2022.
USpharma Ltd, is an USA based company that develop novel drug delivery technologies.
Source: Exchange Filing, Bloomberg
Sensex, Nifty Lose Nearly 2%
Nestle Plans To Invest Rs 5,000 Crore In India, CEO Mark Schneider To PTI
Nestle CEO Mark Schneider said the FMCG major plans to invest Rs 5,000 crore in India by 2025.
The investment would be on setting up new plants, acquisitions and expansion of the product portfolio of the company.
Nestle is also looking at new locations to set up manufacturing capacity.
Source: PTI
Dish TV Gains Nearly 24% This Week Despite Today's Decline
Shares of Dish TV India reversed 10% gains and fell 5%, on course to snap a four-day winning streak. The stock has gained nearly 24% this week.
Trading volume is more than five times the 30-day average. The rise comes after the company announced during market hours on Monday that Jawahar Goel resigned as Director of the company and from the board of directors of company, effective from September 19.
Source: Bloomberg, Exchange filing
All Constituents Of Nifty Bank Index Decline
Paytm Gains Most In Two Weeks As Goldman Sachs Adds Stock To 'Conviction List'
Shares of Paytm gained over 3% during the session, the most in two weeks. The rise comes after Goldman Sachs added the online payments firm's stock to its conviction list'.
Goldman Sachs expects strong traction for Paytm's business model to continue and termed it one of the most compelling growth stories at an attractive price within its internet coverage universe, according to a note by the global brokerage firm on Thursday.
Goldman Sachs' rating on the stock remains the same from August 7. It has a 'buy' on the stock with the target price at Rs 1,100 (implied upside of 40.25%).
It also noted that the expiry of the lock-in on 86% of the company's outstanding shares in November could act as an overhang on the stock.
Of the 12 analysts tracking the company, six maintain 'buy', three suggest 'hold' and three recommend 'sell'. The return potential of the stock is 29.9%
Source: Bloomberg
Sensex Loses Over 900 Points; Nifty Slips Most In A Week
Nifty Pharma Index Rises Amid Sharp Slide In Markets
European Markets Decline
European markets open lower ahead of Euro Zone S&P Global PMI data.
Source: Bloomberg
10-Year Bond Yield Rises
Yield on the 10-year bond rose 8bps to 7.39%, during the session, before easing off to 7.36%.
Source: Bloomberg
Rupee Trims Losses After Slipping To Fresh Low
Rupee fell 40 paise to record low 81.26, during the session. The Indian currency trimmed some of the losses to 80.94 against the greenback.
Source: Bloomberg
Midday Market Update: Sensex Loses 800 Points; Nifty 50 Slips Most In A Week
India's stock benchmarks fell and remain on course to decline for the third session in a row, dragged by broad based losses across sectors led by banking, power, auto stocks while healthcare, FMCG and I.T stocks stayed resilient in a weak session.
The Sensex lost 800 points to 58,315.71. The Nifty 50 fell 1.3% to 17,400.75. Today 42 of Nifty 50 stocks declined. Power Grid, M&M, IndusInd Bank, HDFC Bank, HDFC were the top losers.
The broader indices almost mirrored their larger peers with MidCap gauge losing 1.45% and SmallCap measure shedding over 1%. Barring S&P BSE Healthcare, all the other 18 sectoral indices compiled by BSE Ltd declined with Financial Services, Bankex, Power and Utilities losing over 2%.
The market breadth is skewed in the favour of bears. About 1,088 stocks rose, 2,242 fell and 140 remained unchanged.
Year Of Disaster For Gold Mining & Gold Stocks, Says Greed & Fear Report
Mining companies' margins contracted due to a 'double whammy of declining gold price and rising costs this year with gold and gold mining stocks declining. The inflows seen earlier this year into gold ETFs have also 'almost completely unwound', according to Greed and Fear report by Christopher Wood of Jefferies.
Given the dollar strength and 'almost schizophrenic mood swing engaged in by the Fed' since November, there is no surprise that gold should be under pressure.
If there is any sudden change in Fed's stance, gold, higher beta silver will be the key beneficiaries, according to Chris Wood, who noted that despite Fed's hawkishness, gold's performance has been much better than the S&P 500 or long-term treasury bonds in 2022 so far. In contrast to gold, bitcoin seemed extremely correlated to Nasdaq during the ongoing tightening cycle.
Source: GREED & Fear Report September 22
Power Grid Falls Most In A Year
Shares of Power Grid lost over 5.2%, steepest intraday decline in at least a year.
Trading volume is five times the 30-day average.
Elara Capital reiterated 'reduce' on the stock and kept target unchanged at Rs 213 (implied return of -3.23%) while Jefferies retained 'buy' and maintained target price at Rs 260 (implied return of 18.13%) on Thursday. The stock has fallen 8% over the last two days.
Jefferies noted reports indicating that Power Ministry is in talks with Power Grid to purchase PFC's 52.63% stake (Rs 14,400 crore) in REC. The global brokerage firm said PFC should ideally finance power projects through stake sale proceeds, and added Power Grid had sufficient cash and reiterated positive view on the 1-year and medium-term transmission spend growth story.
However, Jefferies observed that the purchase of PFC's stake in REC was a near-term dampener and could adversely impact FY23-25E EPS by 3-5%. The relative insulation of Power Grid, unlike NTPC which has made investments outside the core, and execution track record ensured the company's leadership in transmission, even after the introduction of private competition in 2013, note Jefferies. It added that if the stake purchase materialised, approximately Rs 21 per share, it is unlikely to be valued by the market. The purchase could also lead to lowering of dividend payout given the cash outflow due to the buy. Some de-rating is likely, according to Jefferies.
The company announced that G Ravishankar assumed the position of Director (Finance), in an exchange filing on Thursday.
Power Grid also had 1 million shares and 2.02 million shares change hands in two separate large trades in today's session.
Of the 24 analysts tracking the company, 19 maintain 'buy', five suggest 'hold' and one recommends 'sell'. The return potential of the stock is 13.6%.
Source: Bloomberg, Jefferies Note
Accenture Q4 Results Highlights
Schneider Electric Gains 20% In Two Days
Sterling & Wilson Renewables Unit To Set Up Nigeria Solar Power Plants; Stock Surges
Share of Sterling and Wilson rose 10%, during the session, most in over 11 months since October 11, 2021.
Trading volume is 12 times the 30-day average. Share price crossed 200-day simple moving average, indicating potential upward price momentum.
The relative strength index of the stock is 74, suggesting it may be overbought.
The company signed a Memorandum of Understanding (MoU) with the Government of Federal Republic of Nigeria to deliver the development, design, construction and commissioning of solar photovoltaic power plants with total installed capacity of 961 MWdc at five different locations in the Federal Republic of Nigeria along with battery energy storge systems with total installed capacity of 455 MWh.
The U.S. subsidiary of Sterling & Wilson Renewable - Sterling & Wilson Solar Solution, along with its consortium partner Sun Africa signed the MoU
These projects will be eventually owned and operated by Niger Delta Power Holding Company, a Nigerian Government owned entity. Financing for these Projects are under negotiations between US EXIM, ING and the Government of Nigeria
Source: Bloomberg, Exchange Filing
Fortis Healthcare Loses 20% In Two Sessions
Shares of Fortis Healthcare fell over 5.3% during the session. Today's decline follows the 14.71% loss on Thursday.
Trading volume is more than 12 times the 30-day average. All 11 analysts tracking the company maintain 'buy'. The return potential of the stock is 23.6%.
ICICI Securities reiterated 'buy' and maintained target at Rs 299 (implied upside of 16.52%). BNP Paribas Asia also retained 'buy' and kept target unchanged at Rs 314.74 (implied return is 22.59%).
The decline comes after Supreme Court refused to lift the halt on IHH Healthcare's open offer for Fortis and ordered a forensic audit on the share sale. In its order on Daiichi's petition on Fortis sale to IHH on Thursday, the apex court has asked the Delhi High Court to decide on the open offer.
The order comes on Japanese pharma firm Daiichi Sankyo's petition challenging the Fortis-IHH deal. Daiichi sought to recover Rs 3,600 crore arbitration award against Fortis' former promoters, Malvinder Singh and Shivinder Singh.
The Supreme Court had ordered six-month jail for the Singh brothers.
Malaysian firm IHH Healthcare had bought a 31% stake in Fortis in 2018 for $1.1 billion. Daichii Sankyo had objected the sale of pledged shares in Fortis as it claimed rights over the shares.
Source: Supreme Court Order, Bloomberg
Large Trade: Power Grid, ITC
Power Grid has 2.02 million shares and 1.27 million shares change hands in a two large trades.
ITC has 1.06 million shares change hands in a large trade.
Details of buyers, sellers are not known immediately.
Source: Bloomberg
M&M Falls Most In A Week
Shares of Mahindra & Mahindra lost over 3.3%, most in a week. The stock is on course to snap four-day winning streak.
Trading volume is nearly twice the 30-day average.
The stock is the top loser in the 15-stock NSE Nifty Auto index.
On Thursday, Reuters reported that the company is in discussions to raise between $250 million and $500 million to advance its electric vehicles plan, citing a person familiar with the matter.
Mahindra & Mahindra is in preliminary talks with global green funds and private equity firms, according to the report. The company has committed to invest $500 million in the electric SV space along with British International Investment.
Of the 47 analysts tracking the company, 41 maintain 'buy', four suggest 'hold' and two recommend 'sell'.
Source: Bloomberg, Reuters
Infosys Leads The Gains In NSE Nifty IT Index
NSE Nifty Bank Index Loses Nearly 2%
Cipla Gains In Weak Market As Indore Plant Gets EIR From U.S. FDA
Shares of Cipla rose nearly 3%, most since Tuesday, in a weak market, to near 52-week high of Rs 1,093 apiece.
The rise comes after the company announced post market hours on Thursday that it received the Establishment Inspection Report after U.S. FDA Pre-Approval Inspection at the company's Indore plant between June 27 and July 1.
The receipt of EIR indicates closure of inspection.
Trading volume is more than quadruple the 30-day average. Of the 43 analysts tracking the company, 35 maintain 'buy', five suggest 'hold' and three recommend 'sell'. The return potential of the stock is 2.7%.
Source: Exchange filing, Bloomberg
Tata Steel Gains After Approving Merger Of Seven Of Its Subsidiaries With Itself
Shares of Tata Steel jumped over 4% after the company approved the merger of seven of its subsidiaries with itself.
The decision is aimed at simplifying the company's structure.
Tata Steel has approved the amalgamation of Tata Metaliks, Tata Steel Long Products, Tinplate Company of Indian, TRF, The Indian Steel & Wire Products, Tata Steel Mining, S&T Mining Company with itself.
While Tata Steel's stock rose, Tata Steel Long Products' shares lost nearly 10%. Shares of Tinplate Co of India lost over 6%. Tata Metaliks lost nearly 4%. TRF shed 5%
Source: Exchange filing, Bloomberg
M&M Financial Services Falls Most In At Least A Year
Shares of Mahindra & Mahindra Financial Services lost nearly 10%, the most in at least a year.
Trading volume is more than 19 times the 30-day average.
Share price crossed below 50-day simple moving average, indicating potential downward price momentum.
The fall comes after the company said it will repossess fewer vehicles than its usual flow after RBI ordered the company to suspend all recovery and repossession actions through third party arrangements.
The NBFC usually repossesses 4,000-5,000 vehicles each month. With the new order from RBI on Thursday, M&M Financial's repossession will go down by 3,000-4,000 vehicles temporarily.
M&M Financial, in an exchange filing, also added that it does not employ third party agents for collection of dues.
The order from RBI came after a tractor repossession action in Jharkhand allegedly led to the death of a pregnant woman.
Of the 31 analysts tracking the company, 17 maintain 'buy', nine recommend 'hold' and five suggest 'sell'. The return potential of the stock is 2.4%.
Source: Exchange filing, RBI order, Bloomberg
Opening Bell: Sensex, Nifty Volatile; Metal, Commodities Stocks Advance
India's stock benchmarks swung between gains and losses at the open, as rise in metal, commodities, auto stocks were offset by fall in banking stocks.
The S&P BSE Sensex lost 300 points (0.51%) to 58,818.39. The NSE Nifty 50 also declined by similar magnitude to 17,554.30. Today 15 of Nifty 50 stocks rose while 35 fell. Tata Steel, Cipla, Apollo Hospitals, Shree Cement and Divi's Laboratories are among the top Nifty 50 gainers. Tech Mahindra, HDFC, IndusInd Bank, HDFC Bank, Kotak Mahindra Bank lost the most among Nifty 50 constituents.
The broader indices outperformed their larger peers with S&P BSE MidCap falling 0.20% and SmallCap little changed. Twelve of the 19 sectoral indices compiled by BSE Ltd. declined wth Financial Services gauge losing over 0.8%.
The market breadth is skewed in the favour of bulls. About 1,362 stocks rose, 1,112 fell and 121 remained unchanged.
10-Year Bond Yield Rises
Yield on the 10-year bond rose 7bps to 7.38%.
Source: Bloomberg
Rupee Slides Past 81 Mark For The First Time Ever
Indian currency depreciated 24 paise to record low 81.10 against the greenback.
Source: Bloomberg
Mahindra & Mahindra Financial Says Vehicle Repossession May Temporarily Fall After RBI Order
Mahindra & Mahindra Financial said it repossesses about 4,000-5,000 vehicles per month, using the third-party agencies and its own employees.
The company expects this number to go down temporarily by about 3,000 to 4,000 per month, after the RBI order stalling third-party agencies from recovery activities.
It said it does not expect any impact on the collections in this business.
The order is also not expected to have any material impact on financials or on Net Stage 3.
Source: Press release
In Focus: Metal Stocks
Shares of metal and automotive supply chain firms will be in focus after Tata Steel approve proposal to merge seven group companies with itself.
In Focus: JSW Steel, Hindustan Zinc, Vedanta, Hindalco, Jindal Steel, SAIL
Source: Bloomberg
Reliance New Energy To Invest In U.S.-Based Perovskite Solar Cell Maker
RIL subsidiary Reliance New Energy will invest around Rs 100 crore ($12 million) to acquire a 20% stake in Caelux Corporation, a company engaged in the development of perovskite-based solar technology.
Reliance and Caelux have also entered into a strategic partnership agreement for technical collaboration and commercialization of Caelux’s technology.
The investment will also help Reliance to produce more powerful and lower cost solar modules leveraging Caelux’s products in its integrated photovoltaic Giga factory at Jamnagar, Gujarat.
The transaction will not require any regulatory approval and is expected to be completed by the end of September 2022.
Source: Press release
Tata Steel Board Approves The Merger Of Seven Of Its Subsidiaries With Itself
Tata Steel board approves the merger of the following companies with itself:
Tata Metaliks
Tata Steel Long Products
Tinplate Company of India
TRF
The Indian Steel & Wire Products
Tata Steel Mining and S&T Mining Company
S&T Mining Company
Source: Exchange filing
Trade Setup For Friday
Stocks to Watch
IT Stocks: Accenture Plc’s revenue rose in the fourth quarter but its FY23 guidance remained below estimates. Accenture expects revenue to rise between 10% to 14% for the first quarter of FY23. And grow 8% to 11% in the fiscal 2023.
Tata Steel: The board of the private steelmaker has approved the merger of seven subsidiaries with itself.
M&M Financial Services: The RBI has asked the company to stop outsourcing all recovery and repossession arrangements immediately, till further orders. The action came after a pregnant woman was mowed down by a recovery agent of the company.
Hero MotoCorp: The company has increased ex-showroom prices of its motorcycles and scooters up to Rs 1,000, with effect from Sept. 22, to partially offset the impact of inflation.
Aster DM Healthcare: Medcare Hospital, a step-down subsidiary, has acquired 60% stake in Dubai-based Skin III, for 16.65 million dirhams (Rs 36.74 crore). Skin III offers IV drips (vitamin and detox) and other aesthetics procedures.
TVS Motor: Sundaram Auto Components, a wholly owned subsidiary, has sold its entire stake of 50.05% in Sundaram Holding USA Inc., a material stepdown subsidiary, to holding company Sundaram Clayton for a consideration of Rs 317.01 crore.
Jindal Stainless: To consider raising funds via debt, NCDs.
Piramal Enterprises: To consider issue of NCDs up to Rs 750 crore.
Adani Enterprises: Adani Road Transport, a wholly owned subsidiary, has incorporated two units—Adani Road STPL and Adani Road GRICL—for promotion and development of road and other infra projects.
Zydus Lifesciences: The company will subscribe to additional equity shares and compulsorily convertible debentures of AMP Energy Green Nine, as per the agreement entered on March 16, 2022.
Somany Ceramics: The company has decided to sell its entire stake of 51% in subsidiary Amora Ceramics for a consideration of Rs 3.62 crore. The sale is expected to be completed within the next 30 days.
Trident Group: The company has completed a solar power project of 8.87 MWp at Budhni, Madhya Pradesh, of which 5.48 MWp capacity has been commissioned in the first phase for captive use.
Cipla: The company has received the establishment inspection report from USFDA for product specific pre-approval inspection at its Indore plant, indicating closure of the inspection.
Udaipur Cement Works: The company will raise Rs 350 crore via NCDs on a private placement basis at a coupon of 7.45%.
Century Textiles & Industries: Birla Estates and the real estate arm of the company has acquired a 10-acre land parcel at Raja Rajeshwari Nagar in South Bengaluru. The project has a development potential of 10 lakh square feet with a revenue potential of Rs 900 crore.
Shilpa Medicare: The company’s analytical services division at Nacharam, Hyderabad, has received US FDA clearance for inspection performed between April 26, 2022, and April 29, 2022.
Bombay Dyeing: To raise up to Rs 940 crore via rights issue.
Sensex, Nifty Set To Open Lower; I.T. Stocks, Tata Steel, M&M Financial, Hero Moto In Focus
Asian stocks headed for a sixth weekly decline following another day of losses for American shares and surging treasury yields that underscore expectations for tighter monetary policy and a slowing global economy.
Equities fell Friday in Hong Kong, Australia and South Korea after the S&P 500 closed at the lowest level since June. U.S. futures fluctuated. At 7:45 a.m., the Singapore-traded SGX Nifty -- an early barometer of India's benchmark Nifty 50 -- traded 0.4% lower at 17,569.5 points.
The 10-year U.S. Treasury yield soared 18 basis points to pierce 3.7% on Thursday, its highest in a decade as investors weighed recession risks. Bond yields in Asia pushed higher, led by a jump of more than 20 basis points in Australia as trading resumed there after a holiday.
There is no trading of cash Treasuries in Asian hours with markets closed in Japan for Autumnal Equinox Day.
A dollar gauge held near a record high after a day of dramatic moves in currency markets that saw Japan intervene to prop up the ailing yen for the first time since 1998. The offshore yuan weakened in the face of efforts to slow the depreciation, with the People’s Bank of China setting the daily reference rate stronger than expected for a 22nd day.
The rupee, meanwhile, has slumped to a record low.