Sensex, Nifty Fall For Third Week Despite RBI Rate Hike Rally; FPIs Remain Net Sellers

India's stock benchmarks advanced on Friday, gaining most in a month, but extended losses over the week.

This is the third consecutive weekly decline for Sensex and Nifty as they logged the worst month since June.

Sectorally, Nifty Pharma and Nifty IT were the sole gainers while Metal, Auto and Realty indices declined the most.

On Friday, the stock benchmarks snapped a seven-day losing streak (joint longest in 2022 so far), and gained most in a month after RBI announced its rate decision.

The Sensex gained over 1,000 points to 57,426.92. The 30-stock gauge rose 1,312.67 points to an intraday high of 57,722.63.

The Nifty advanced over 1.64% to 17,094.35. Today 41 of Nifty 50 stocks rose while nine fell. Hindalco, Bharti Airtel, IndusInd Bank, Bajaj Finance, Kotak Mahindra Bank were the top gainers while Asian Paints, Coal India, Dr. Reddy's, Britannia, Adani Enterprises declined.

The broader indices underperformed their larger peers, with MidCap and SmallCap measures gaining 1.4%. Barring Oil & Gas gauge, all the other 18 sectoral indices compiled by BSE advanced with Telecom Index gaining 3.5%.

The market breadth was skewed in the favour of bulls. About 2,334 stocks rose, 1,107 fell and 97 remained unchanged.

Overseas investors remained net sellers for the eighth day in a row, on Friday.

As per data from the National Stock Exchange, foreign portfolio investors net sold equities worth Rs 1,565.31 crore today.

On the contrary, Domestic institutional investors remained net buyers for the ninth straight day and bought equities worth Rs 3,245.45 crore today.

Institutions have net sold Rs 4,343.53 crore worth of equities this month and Rs 37,826.61 crore worth of Indian equities till date in 2022.

Yield on the 10-year bond rose 7bps to 7.40%, during the session.

The 10-year bond yield close at 7.39%.

Source: Bloomberg

Indian currency appreciated 71 paise to 81.14 during the session. The Rupee closed 50 paise higher at 81.35.

Source: Bloomberg

Dilip Buildcon said it has emerged as the lowest bidder for the second phase of Ahmedabad Metro Rail project by Gujarat Metro Rail Corporation Ltd.

The project cost is Rs 723.45 crore and includes construction of 7.5 kms elevated viaduct and seven stations.

Shares of Dilip Buildcon surged over 7.3%, most in nearly two months since August 2.

Trading volume is 2.5 times the 30-day average.

Of the eight analysts tracking the company, three maintain 'buy', three suggest 'hold' and two recommend 'sell'. The return potential of the stock is 37.2%

Source: Bloomberg, Exchange filing

Shares of Arvind Smartspaces rose over 4.3%, most since Wednesday. The rise comes after the company approved consolidation of partnership interest in Ahmedabad East Infrastructure, according to an exchange filing post market hours Thursday.

The board of Arvind SmartSpaces on 29 September 2022 approved the consolidation of the partnership interest of the company in Ahmedabad East Infrastructure LLP (AEI LLP) from 51.43% to 55.24%. Arvind Smartspaces also approved profit sharing in AEI LLP from 94.25% to 98% upon acquisition of entire partnership interest of Arvind Infrabuild LLP in AILLP.

Trading volume is 0.3 times the 30-day average.

Source: Bloomberg, Exchange Filing

Sensex gains nearly 1,150 points (2.03%), most in over a month since August 30. The stock benchmarks are on course to snap a seven-day losing streak(joint longest losing streak in 2022 so far).

Source: Bloomberg

Shares of city gas distribution companies - Mahanagar Gas, Indraprastha Gas, Adani Total, Gujarat Gas declined in a strong market.

Source: Bloomberg

European markets open higher; Oil & Gas stocks gain ahead of initial euro zone inflation data for September due to be announced today.

Source: Bloomberg

Shares of Schneider Electric Infrastructure gained over 7%, the most in a week after the company said it will invest Rs 300 crore in its smart factory in Telangana state, on Thursday. The stock outperformed the S&P BSE Sensex which went up 1.6%.

The smart factory will be the second for the company in Telangana and is spread over 18 acres. The new facility will be developed in two phases. The first phase with 2 lakh square feet area is expected to be completed in September 2023.

"The new upcoming state-of-the-art smart factory is testament to our commitment towards making Hyderabad a leading manufacturing hub in the country. We will be investing over INR 300 crores in this project, which will in turn create additional 1,000 jobs", said Anil Chaudhry, Zone President a India and CEO & MD of Schneider Electric.

Trading volume is nearly twice the 30-day average. The relative strength index is 75, suggesting that the stock might be overbought.

Source: Bloomberg, Press release

India's stock benchmarks opened little changed before surging over 1.5% and are course to snap a seven-day losing streak, after RBI's rate-setting committee hiked repo rate by 50bps. Banking, Telecommunication, Consumer Durables and Power stocks advanced.

The Sensex gained 1.65% (over 930 points), most in a month since August 30, to 57,342.46. The 30-stock gauge reclaimed 57,000 after three sessions. The Nifty 50 rose over 1.6% to 17,094.45. Today 42 of Nifty 50 stocks rose while eight fell.

Hindalco Industries Ltd, Bajaj Finserv, HDFC Bank, HDFC, ONGC Ltd, Kotak Mahindra Bank Ltd are the top Nifty 50 gainers. HUL, Dr. Reddy's, Asian Paints, TCS, Britannia declined the most among the index constituents.

The broader indices underperformed their larger peers with MidCap and SmallCap gauges gaining over 0.8%. Seventeen of the 19 sectoral measures compiled by BSE advanced with Financial Services, Telecommunication, Utilities, Bankex, Metal and Power indices gaining over 2%.

The market breadth is skewed in the favour of bulls. About 2,064 stocks rose, 1,195 fell and 128 remained unchanged.

Shares of One 97 Communications rose over 1% and are on course to snap a two-day losing streak.

The relative strength index of the stock is 27, suggesting it may be oversold.

JPMorgan reiterated 'overweight' recommendation on the stock and maintained target to Rs 1,000, an implied return of 58.19%.

The brokerage firm, in a note on September 29 said that the company is undergoing a model shift from chasing 'growth at any loss' to 'profitability by September 2023.

While noting that many investors remain skeptical of Paytm achieving EBITDA profitability by September 2023, JPMorgan observed that moderation in indirect expenses from Q2 onwards should be a catalyst for profitability.

The global brokerage firm added that financial services business scale-up continued to be key value driver.

Of the 12 analysts tracking the company, six maintain 'buy', three remain 'hold' and three recommendation 'sell'. The overall consensus price of analysts tracked by Bloomberg implied an upside of 42.4%.

Source: Bloomberg, Exchange Filing

Net LAF continues to be in surplus for last two years, except maybe two-three days

Many banks are holding excess CRR, SLR

Many banks are dipping into excess CRR and SLR, because they need the cash

The second half expenditures of state and central governments are very high

If you take everything into account, the system liquidity is in the order of Rs 5 lakh crore

There should not be any concern about liquidity suddenly being tight

Nobody is blaming the major global central banks, but we are dealing with the spill-over of their actions, says Shaktikanta Das, RBI Governor

Actions taken by major central banks to combat inflation has indeed been a shock

It has further accentuated the situation in the global markets

It has created excessive volatility in the currency market

Global currencies are depreciating, bond yields are very volatile

The third shock has added to the uncertainty that has been prevailing

The forward guidance of the U.S. Fed talks about future rate hikes, which are large

The stress on global markets has increased by the actions taken by the global central banks

Source: RBI Governor

The MPC decisions continues to be guided by domestic factors

There are two components in monetary policy framework – growth and inflation

MPC decisions are based on twin objectives, with primacy given to price stability

Other than that, currency market fluctuations, depreciation or appreciation of rupee is not a factor for consideration of the MPC

For dealing with issues not relating to growth and inflation, the RBI has other tools

Source: RBI Governor

Shares of Motherson Sumi Wiring India reversed intraday gains.

The company's board approved increase in authorised share capital from Rs 333 crore to Rs 900 crore.

It also recommended issue of bonus shares in the ratio of 2 bonus shares for five equity shares of Re 1 each held.

Of the 10 analysts tracking the company, seven maintain 'buy', one recommends 'hold' and two suggest 'sell'. The return potential of the stock is 1.1%.

Source: Exchange Filing, Bloomberg

Shares of Indus Towers gained 4%, most in 11 weeks since July 12. Trading volume is 1.3 times the 30-day average. The stock overperformed the benchmark S&P BSE Sensex, which was up 0.9%.

Earlier on Friday, Vodafone Idea said that it is in discussion with Indus for softer payment terms, which have not been concluded.

The comments came after the Economic Times reported that Indus Towers had asked the cash-strapped telecom operator to clear its pending dues or run the risk of losing access to its towers from November, citing two people aware of the matter.

Of the 25 analysts tracking the company, 10 maintain 'buy', nine suggest 'hold' and six recommend 'sell'. The return potential of the stock is 15.3%.

Shares of Vodafone Idea also jumped over 5.2%, most in over three weeks since September 7.

Source: Bloomberg, BSE

Shares of Rail Vikas Nigam Ltd rose over 2%, after receiving a contract from the National Highways Authority of India.

Rail Vikas Nigam has received contract for the construction of 4 lane highway from Samarlakota to Achampeta Junction (12.25 Km), from National Highways Authority of India (NHAI).

The contract is a part of Kakinada port to NH - 16 connectivity in Andhra Pradesh under Bharatmala Pariyojana on EPC mode at a cost of Rs 408 crore.

Total traded volume is twice the 30-day average.

Both the analysts tracking the company maintain 'buy'. The return potential of the stock is 26.7%.

Source: Bloomberg, Exchange Filing

The board of Heritage Foods has approved to raise funds by way of rights issue in the ratio of 1:1 at the face value of Rs 5 per share to the existing shareholders.

Size of the proposed rights issue is Rs 23.2 crore.

Source: Exchange filing

Shares of Punjab National Bank rose 3.3%, most in nearly two weeks. The bank announced that it will sell its entire stake in Asset Reconstruction Company Ltd (ARCIL).

Punjab National Bank shareholding in Asset Reconstruction Company as on date is 10.01% (No. of Shares 3,25,06,0486)

The indicative timeline is December 31, 2022 for completion of completion of the divestment, and it is all cash consideration disinvestment.

Total trading volume is twice the 30-day average.

Of the 18 analysts tracking the company, six maintain 'buy', six suggest 'hold' and six recommend 'sell'. The return potential of the stock is 2%.

Source: Bloomberg, Exchange Filing

Forex reserves at $ 537.5 billion

67 % of the decline due to valuation changes

Accretion of $ 4.6 billion to reserves

Market intervention continued to be judicious

Source: RBI Governor

Umbrella (reserves) continues to remain strong.

In policy tightening it is arduous to provide forward guidance in a continuous evolving climate.

Our actions will be carefully calibrated with data and evolving conditions.

Source: RBI Governor

It has been decided that 28 day VRRR to be merged with 14 day VRRR auction.

Going forward only 14 day VRRR auction will be conducted.

Source: RBI Governor

The RBI does not have any exchange rate in mind

The RBI intervenes to curb excessive volatility

Our actions have helped in anchoring investor confidence

In medium term, the primacy of price stability in our inflation targeting framework provides bedrock for exchange rate stability

Source: RBI Governor

With retail inflation at 7.1% in Q2, 6.5% in Q3, 5.8% in Q4 with risks evenly balanced.

Inflation expected at 5% in Q1FY24.

Source: RBI Governor

Growth in Q2 FY23 seen at 6.3%, Q3 at 4.6% and Q4 at 4.6%

Real GDP Growth in Q1 FY24 is projected 7.2%

RBI retains retail inflation projection for FY23 at 6.7%, says Shaktikanta Das, RBI Governor

Indian basket crude oil price was around $104 in the first half of FY23

Assuming brent crude at $100 per barrel in the second half of FY23

Project CPI inflation at 7.1% in Q2, 6.5% in Q3 and 5.8% in Q4

CPI inflation seen moderating to 5% in Q1 FY24

Source: RBI Governor

Share of Bajaj Electricals Ltd. jumped over 2%, and are on course to extend gains for the fourth day in a row. Trading volume is nearly thrice the 30-day average. The rise comes after the company received order under the ‘Transmission lie Tower Package TW04’ from Power Grid Corporation of India Ltd

The company received order to supply of good/services Transmissions line Tower Package TW04 for ‘765 Kv D/C Navasari- associated with Transmission Network Expansion in Gujarat to increase its ATC from ISTS.

The value of order is aggregating to Rs. 332.65 crore.

The project shall be completed within 15 months from the date of issue of Letter of Agreement.

Of the 20 analysts tracking the company, 14 maintain 'buy', five suggest 'hold' and one recommends 'sell'. The return potential of the stock is 9.6%.

Source: Bloomberg, Exchange Filing

• Inflation is hovering around 7% and we expected to remain elevated around 6% in the second half

• Liquidity remains in surplus

• As government expenditure picks up, system liquidity will go up further

• Policy rate adjusted for inflation trails the 2019 level

Source: RBI Governor

Indian currency appreciated 36 paise to 81.49 against the U.S. dollar, during the session.

The Rupee trimmed some of the gains to 81.63.

Source: Bloomberg

US dollar has reached a new high

EMEs are confronted with challenges of slowing global growth, elevated food and energy prices, spillovers from advanced economy policies, debt distress and sharp currency depreciation

Economic activity in India remains stable, gives us the confidence of dealing with the current problems

Source: RBI Governor

Repo rate hiked for the fourth time and now stands at 5.9%

Decision to raise policy rate was decided by a majority of 5 out of six.

Remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward while supporting growth

Source: RBI Governor

Covid-19 pandemic and conflict in Ukraine have create profound impact on global economy, says Shaktikanta Das, RBI Governor

Another storm of tough macroeconomic policy and more aggressive guidance by central banks is here

All segments of the financial markets are in turmoil across countries

Global economy is indeed in the eye of a new storm

Indian economy continues to be resilient

Source: RBI Governor's monetary policy address

Yield on the 10-year bond rose 5bps to 7.39%.

Source: Bloomberg

Shares of Lupin rose over 4.2%, most in over a week to Rs 682.8 apiece. Trading volume is nearly nine times the 30-day average. Share price crossed above 50-day simple moving average, indicating potential upward price momentum.

The uptick is share prices comes after the company announced that it receive approval from U.S. FDA for its ANDA Mirabegron Extended-Release Tablets, 25 mg and 50 mg, to market generic equivalent of Mirabegron Extended-Release tables of Astellas Pharma, post market hours on Thursday.

The tablets will be manufactured at Nagpur facility of Lupin. The drug had estimated annual sales of $2,403 million in U.S. in the year ended June 2022, according to IQVIA.

The drug is used to treat certain bladder problems such as neurogenic detrusor overactivity.

Of the 42 analysts tracking the company, 11 maintain 'buy', 17 suggest 'hold' and 14 recommend 'sell'. The return potential of the stock is -0.7%.

Source: Exchange filing, Bloomberg

Tejas Networks' shares jumped over 5.3%, most since Wednesday to record high of Rs 697.2 apiece. The uptick comes after the company approved merger of Saankhya Labs and its unit Saankhya Strategic Electronics with itself.

Trading volume is more than six times the 30-day average.

The company approved the issuance of equity shares of Tejas Networks to the shareholders of Saankhya in accordance with share exchange ratio under the scheme. The scheme is subjected to necessary regulatory approvals.

Source: Bloomberg, BSE

India's stock benchmarks opened little change, ahead of RBI's Monetary Policy Committee's rate decision, as losses in energy, oil and gas, information technology and realty stocks were offset by gains in FMCG, telecom, metal stocks, amid slide in global equities.

The S&P BSE Sensex opened flat before shedding nearly 250 points (0.44%) to 56,162.33. The NSE Nifty 50 declined 0.4% to 16,754.70. Today 17 of Nifty 50 stocks rose while 33 fell. Hindalco, Sun Pharma, Grasim, ITC, Nestle are among the top gainers while Tata Motors, HDFC, Tech Mahindra, Infosys, HDFC Bank declined.

The broader indices almost mirrored their larger peers. Thirteen of the 19 sectoral indices compiled by BSE Ltd. declined with Information Technology and Oil & Gas losing the most.

The market breadth is skewed in the favour of bulls. About 1,241 stocks rose, 1,039 fell and 111 remained unchanged.

Yield on the 10-year bond rose 2bps to 7.36% at the open

Source: Bloomberg

Indian currency appreciated 25 paise to 81.60, at the open.

Source: Bloomberg

Medical oxygen generator supplier Airox has filed for an IPO to raise Rs 750 crore.

Lohia Corp. has filed for an IPO via sale of 3.17 crore secondary shares.

Source: SEBI

• U.S. Dollar Index at 111.89.

• U.S. 10-year bond yield at 3.79% on Thursday.

• Brent crude up 0.02% to $88.51 per barrel

• Nymex crude at $81.41 per barrel.

• SGX Nifty down 0.6% to 16,704.5 as of 6:10 a.m.

• Bitcoin up 0.2% to $19,542.4.

• Adani Power: The Competition Commission of India has approved the acquisition of 100% equity of Diliigent Power and DB Power by Adani Power.

• Hero MotoCorp: The company will invest $60 million (about Rs 490 crore) in U.S.-based Zero Motorcycles to jointly develop electric motorcycles.

• Vodafone Idea: In response to clarification sought by the exchanges on reports of Indus Towers seeking payment of dues to continue services, the company said that discussions are going on over softer payment terms and are yet to be concluded.

• Adani Green: The company commissioned the world's largest wind-solar power plant of 600 MW capacity in Jaisalmer, Rajasthan.

• Lupin: The company launched Sildenafil for Oral Suspension, indicated for the treatment of pulmonary arterial hypertension, in the U.S. market. The company has also received USFDA approval for its abbreviated new drug application Mirabegron extended-release tablets.

• Maruti Suzuki/Tata Motors/Mahindra & Mahindra: Car sales volumes in India are expected to increase by 12.5% this year and another 4% in 2023, Moody’s said.

• Bajaj Electricals: The company received an order for the supply of goods and services under a transmission line project from the Power Grid Corporation of India, aggregating to Rs 332.65 crore.

• Zydus Lifesciences: The USFDA completed a pre-approval inspection of the Ahmedabad-based manufacturing facility of Zydus Animal Health and Investments, a wholly owned subsidiary of the company, and issued two observations, none of which were related to data integrity.

• Spandana Sphoorty Financial: ICRA assigned an ‘[ICRA]A-; Stable’ rating on non-convertible debentures of the company worth Rs 500 crore.

• Shoppers Stop: CARE Ratings upgraded the ratings for short-term bank facilities of the company to CARE A1+.

• GMM Pfaudler: The company has completed the acquisition of 46% share capital of GMM International from Pfaudler International and from Millars Concrete Technologies, now holding a 100% stake in it.

• Coforge: The company received a U.S. patent for its Copasys automated compliance audit and quality assurance platform, which is built for banks and financial institutions.

• Ircon International: The company commissioned doubling work of the 72-km-long Hajipur-Bachhwara section, including electrification. The company was appointed by East Central Railways for this work.

• Punjab National Bank: The lender will sell its entire stake in Asset Reconstruction Company (India), amounting to 10.01% of the entire shareholding of the latter.

• Rail Vikas Nigam: The company received a contract for construction of 12.25-km-long four-lane highway from Samarlakota to Achampeta Junction by NHAI as a part of Kakinada port to NH-16 connectivity in Andhra Pradesh under the Bharatmala Project on EPC mode at a total cost of Rs 408 crore.

• Life Insurance Corporation of India/Deepak Nitrite: The LIC increased its shareholding in Deepak Nitrite from 4.977% to 5.028%.

• Arvind SmartSpaces: The company’s board approved the consolidation of its partnership interest in Ahmedabad East Infrastructure LLP from 51.43% to 55.24% and profit sharing in the same from 94.25% to 98.00% upon the acquisition of the entire partnership interest of Arvind Infrabuild LLP in AILLP.