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PremiumShare Market Updates: Bank and NBFC stocks, as predicted, came under pressure on Friday and dragged the benchmark indices with IT also contributing to the pressure.
The RBI on Thursday tightened norms for personal loans and credit cards in the form of higher capital requirements. The new norms will make personal loans and credit cards costlier and may curb growth in these categories.
Asian shares took a breather on Friday as a batch of softer U.S. economic data took some of the steam out of Wall Street, but also boosted bonds in a big way while slugging oil prices in a boon for the inflation outlook.
Indian shares dropped on Friday as a drag in financials and banking stocks after the country's central bank tightened consumer lending rules offset a rally triggered by easing U.S. interest rate outlook and drop in oil prices.
The NSE Nifty 50 index shed 35 pts to close the week at 19,731, while the S&P BSE Sensex fell 190 pts to end at 65,794. Despite the drop, indices registered gains of around 1.8% during this week of trading.
Financials-linked indices such as banks, financial services, private banks lost around a per cent, while public sector banks shed 2%. IT too closed in the red. Pharma, FMCG and Auto were among the biggest gainers.
SBI, Axis Bank, Bajaj Finance ICICI, Bank and Infosys featured in the list of laggards. L&T, SBI Life, Apollo Hospitals, HUL, Nestle India and Asian Paints topped the charts.
Asian stocks were mostly lower on Friday after Wall Street drifted to a mixed finish as momentum slowed following a strong rally in the first half of November.
Japan's Nikkei share average rose to book its third straight winning week, helped by a strong domestic earnings season that just wrapped up. The Nikkei ended the day up 0.48%, extending its gain for the week to 3.12%. The broader Topix added 0.95% on the day to book a 2.33% advance for the week, also a third weekly gain.
Hong Kong shares closed down, dragged by a slump in index heavyweight Alibaba Group after it scrapped plans to spin off its cloud business, while China stocks struggled for direction.
Hong Kong's Hang Seng Index dropped 2.1% and the Hang Seng China Enterprises Index slumped 2.3% at market close. The blue-chip CSI 300 Index slipped 0.1%, while the Shanghai Composite Index edged up 0.1%. For the week, the Hang Seng was up 1.5%, while the CSI 300 lost 0.5%.
European shares rose and were set for weekly gains, boosted by healthcare stocks, while investors keenly awaited inflation data for further proof of easing price pressures across the board.
UK's main stock indices rose and were on track for weekly gains after a slew of economic data spurred expectations among investors that interest rates have peaked.
Three oil tankers, newly sanctioned by Washington, regularly shipped Sokol crude from Russia's Far East to Indian Oil Corp, the country's top refiner, in recent months, according to shiptracking data from LSEG, Kpler and trade sources.
The U.S. on Thursday imposed sanctions on maritime companies and vessels for shipping Russian oil sold above the Group of Seven's price cap, as Washington seeks to close loopholes in the mechanism designed to punish Moscow for its war in Ukraine.
The Liberian-flagged ships hit with sanctions are the Kazan, Ligovsky Prospect and NS Century, according to the Treasury Department.
All three Aframax-sized tankers discharged Russian Sokol crude in India in September while two of them made the trip in October, the data showed.
In the short-term, sanctions may reduce the number of ships carrying Russian oil and prompt India to seek supplies elsewhere, but they are unlikely to stop the trade altogether due to its lucrative nature, several traders who declined to be named, said. (Reuters)
Extending its strong upward trend, shares of PCBL zoomed 10.19% to register a historic high of ₹244.90 apiece in today's trade. This propelled the stock to achieve a substantial gain of 84% in the current year, registering its best yearly performance since CY17.
Looking at the long-term performance, the shares have delivered a 204% return over the last three-year period and over the last decade, the shares delivered a whopping return of 4,170%, climbing from ₹5.62 per share to the current position of ₹238.40. Going forward, the stock has still room to grow further, according to the projections made by the analysts at JM Financial. (Read More)
Rich countries finally hit a long-overdue goal to provide $100 billion of climate finance to poor countries last year, a symbolic target that could help build trust ahead of the COP28 summit in Dubai in two weeks time.
Data from the Organization for Economic Cooperation and Development showed that developed countries had provided $89.6 billion in 2021 and that the $100 billion goal — originally due to have been reached by 2020 — looks likely to have been met last year.
While that figure pales in comparison to the trillions of dollars that are needed to help developing nations decarbonize their economies and adapt to a warming world, it is still a symbolic milestone that the likes of the US and the EU hope unlocks progress in other areas, such as slashing CO2 emissions. (Bloomberg)
UK retail sales fell unexpectedly in October, adding to the impression that a string of interest-rate hikes designed to beat down inflation is beginning to stymie economic activity.
The volume of goods sold online and in store dropped 0.3%, the Office for National Statistics said Friday. That follows a downwardly revised 1.1% decline in September, when unusually warm weather held back spending on clothing.
Economists were expecting a rise of 0.4% for October. Instead, sales fell to their lowest since February 2021 when Covid restrictions were in place, with retailers citing the cost-of-living crisis and bad weather for the poor performance. It bodes ill for the “golden quarter," the run-up to Christmas when stores can make a majority of their yearly profits. (Bloomberg)
Pen maker Flair Writing Industries Ltd has set a price band of ₹288-304 a share for its ₹593-crore initial public offering (IPO), market sources said on Friday.
The maiden public issue will open for subscription on November 22 and conclude on November 24 and the anchor book of the offer will be opened for a day on November 21, they added.
As per the red herring prospectus (RHP), Flair Writing's IPO comprises a fresh issue of equity shares aggregating up to ₹292 crore and an offer-for-sale (OFS) of equity shares worth up to ₹301 crore by promoters and promoter group entities.
At present, promoters and promoter group entities own 100 per cent stake in the company. (PTI)
Jignesh SHIAL and Mayank AGARWAL views on Financial Services - Overall: RBI raises risk weight on consumer loans
Overweight - Maintained
■ The Reserve Bank of India (RBI), in line with its governor’s cautious approach, has increased the risk weight on consumer credit/loans to NBFCs by ~25%.
■ SBI Cards/BAF have elevated portfolio impact with higher capital consumption while SBI/ ICICI Bank (adj. NBFC exposure) are most impacted among banks.
■ Vehicle financiers (IIB/MMFS), MFIs (Spandana) & HFCs (HFF) better placed. Growth trajectory may remain favourable towards better capitalized lenders.
India stands ready to share its technical capabilities relating to Digital Public Infrastructure (DPI) and knowledge resources for empowering the people of the Global South, Economic Affairs Secretary Ajay Seth said on Friday.
G20 Leaders at the New Delhi Summit in September committed to improving access to digital services and digital public infrastructure and leveraging digital transformation opportunities to boost sustainable and inclusive growth.
Speaking at the second Voice of Global South Summit, Seth said another focus area of the Indian presidency is the role of technology in social transformation and economic empowerment, particularly in financial inclusion. (PTI)
Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services: The immediate impact of the RBI action to increase the risk weight on certain categories of unsecured loans, loans to NBFCs and credit card loans is that this will increase the capital requirements of banks, which, in turn, will increase their cost of capital. Since the credit demand in segments like unsecured retail loans is robust, banks can easily pass on the increased cost to borrowers. So, there will be a marginal increase in the cost of credit to borrowers. The impact on banks’ profitability will be negligible.
From the perspective of macro financial stability this is a welcome decision."
European stock markets gained at the start of trading on Friday, closing out a volatile week for financial assets including oil as investors assess the outlook for interest rates.
London's benchmark FTSE 100 index grew 0.3 percent to 7,436.24 points.
In the eurozone, Frankfurt's DAX index rose 0.3 percent to 15,832.21 points and the Paris CAC 40 won 0.5 percent to 7,205.80. (AFP)
Air India on Friday informed that it operated its first ferry flight of its A350-900 aircraft having its new livery. The flight was from Singapore to Toulouse.
The new livery signifies a fresh chapter for Air India and reflects the airline's commitment to offering a modern and visually appealing experience for passengers.
The airline shared the first image of the A350 aircraft on Friday on X.
"Another step closer to the arrival of India's most-awaited aircraft. Our Airbus A350-900 takes off on its first ferry flight from Singapore to Toulouse in the new Air India colours," it wrote on X. (ANI)
BCL Industries shares are one of the multibagger stocks that Indian stock market has produced in recent years. In post-Covid rebound, this FMCG stock has risen from 3.12 apiece levels to near ₹59.40 apiece levels, delivering 1800 per cent return to positional investors in last three and half years. However, it seems that there is still some steam left in this multibagger stock. (Read More)
Asian shares took a breather on Friday as a batch of softer U.S. economic data took some of the steam out of Wall Street, but also boosted bonds in a big way while slugging oil prices in a boon for the inflation outlook.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.67% from a two-month high, but still up 2.7% for the week.
Both Brent and U.S. crude slid almost 5% on Thursday to four-month lows in a move that was blamed on economic and supply concerns, though technical selling likely played a part when the $80 bulwark broke. (Reuters)
Apollo Hospitals Enterprise Ltd, Narayana Hrudayalaya Ltd share price scaled 52-week highs on Friday while Fortis Healthcare, Max Healthcare Institute Limited, Global Health ltd ( Medanta) are trading close to their highs seen recently. The investor confidence remains strong led by improving occupancy for Hospitals, rising average revenues per operating bed (ARPOB), rising non Covid treatment volumes etc that are helping lift their financial performance as was visible in Q2 results. (Read More)
Shrey Jain, Founder and CEO SAS Online: On Friday, the Indian stock market experienced a mixed performance as a decline in financial stocks, following the tightening of consumer lending rules by the country's central bank, counteracted the positive impact of a rally fueled by a more favorable U.S. interest rate outlook and a decrease in oil prices. The central bank implemented a 25 percent increase in the risk weight on consumer loans issued by banks and non-banking financial companies (NBFCs).
In the case of Nifty, the support range is positioned between 19625 and 19700, with a robust buying range extending from 19525 to 19575. In the higher range, Nifty may encounter resistance levels at 19875-19950.
For Bank Nifty, the initial support zone is identified as 43900-44050, followed by a stronger support range at 43625-43800. In the higher range, a formidable resistance is anticipated at 44500-44700.
Indian lenders’ ambition to expand their digital reach and capture a larger share of business in the world’s most populous nation risk being frustrated by outdated technology, regulations and a talent crunch.
The country’s largest shadow lender Bajaj Finance Ltd. was directed on Wednesday to stop offering credit via two products that failed to comply with digital lending rules. Earlier this week, state-run UCO Bank temporarily suspended its online instant payments system after some accounts were credited without the lender actually receiving the money. And Bank of Baroda, one of the largest state-backed lenders, is probing irregularities related to the onboarding of customers to its mobile app.
The technology challenges, which also include clunky legacy systems, difficulties in integrating data and problems finding talent to build systems, come as competition increases for deposits and to form stickier customer relationships. (Bloomberg)
TVS Motor Company share price rose nearly 2% to touch 52-week high of ₹1,712.70 apiece on the BSE on Friday's session following the news of TVS Motor Company's entry into key European market after an agreement with Emil Frey. TVS Motor said in its exchange filing on Thursday that it has inked a distribution and import agreement with Emil Frey, a renowned automotive distributor that has been in business for a century. TVS Motor Company share price today opened at ₹1,699.95 apiece on the BSE. (Read More)
The Indian patent office has granted "highest" number of 41,010 patents till November 15 this fiscal year, Commerce and Industry Minister Piyush Goyal has said.
In 2013-14 fiscal year, 4,227 patents were granted.
"It's a record. Highest ever number of patents granted so far in 2023-24," he said in a post on social media platform X.
On this, Prime Minister Narendra Modi said this is a "notable feat" and it marks a milestone in India's journey towards an innovation-driven knowledge economy. (PTI)
Shares of Delhivery, a prominent logistics service provider, tumbled 3.70% in early trade on Friday, reaching ₹398.50 apiece. This downturn in shares came after 31 million shares of the company changed hands in a block deal window on Friday.
Earlier, it was reported that Japan’s SoftBank Group Corp. would sell shares worth $154 million ( ₹1,250 crore) in Delhivery in a block deal on Friday, Moneycontrol reported on Thursday, citing sources. Following the sale, the investment firm is expected to retain a 10–11% stake in the new-age logistics firm. (Read More)
Apple’s one of the biggest Chinese component manufacturers, Luxshare, has reportedly decided to invest in Vietnam instead of India, citing the political tensions between the two countries.
According to a report by Business Standard, after three years, Luxshare’s move to make investments in Vietnam is a result of many failed attempts to expand its operations in India.
Those who do not know, Luxshare is Apple's primary supplier for AirPods and could be an upcoming supplier for iPhones. As per the reports from the publication, the company now aims to shift their investment worth $330 million to Vietnam's northern province of Bac Giang. (Read More)
After taking a pause on Thursday, buying interest once again triggered in Yes Bank shares during Friday morning deals. Yes Bank share price today opened with a downside gap at ₹20.05 apiece levels on NSE and went on to hit intraday low of ₹19.80 per share levels. However, Yes Bank shares soon gathered upside momemtum and hit intraday high of ₹20.60 per share levels. While climbing to ₹20.60 intraday high levels, Yes Bank shares hit 10-month high and breached February 2023 higher levels. (Read More)
There’s a 1.5 trillion yuan ($207 billion) question weighing on Chinese bond traders’ minds right now: How will Beijing sell that much debt with just six weeks left in the year?
The answer is the People’s Bank of China, the world’s only major central bank on a policy easing path, and a slowing economy that sustains voracious appetite for risk-free assets.
China has issued 9.6 trillion yuan of government bonds so far in 2023, against an estimated annual target of 11.1 trillion yuan, according to Bloomberg’s calculations of Orient Securities Co.’s data. This year’s issuance plan, which would be a record, includes 1 trillion yuan of additional sovereign notes approved last month for disaster relief and climate projects.
The world’s second-largest bond market has mostly taken the deluge of bonds in its stride, a testament to the success of the PBOC’s interest rate cuts and periodic pump priming. There have been hiccups with a brief liquidity squeeze in October, while Chinese banks had also rushed to sell short-term debt to raise cash, underlining the challenge for the central bank. (Bloomberg)
The Indian rupee traded 2 paise lower at 83.25 against the US dollar on Friday weighed down by a firm greenback in the overseas markets. The local unit opened flat at 83.23 a dollar as compared to its previous close.
The dollar index, which gauges the greenback’s strength against a basket of six currencies, was flat at 104.35.
On Thursday, the rupee closed at 83.23 against the greenback. (Read More)
Shares of JSW Infrastructure, one of India's leading commercial port companies, spiked up nearly 8.5% to hit an all-time high of ₹220 apiece in early trade on Friday after the company received a LoA worth ₹4,119 crore. In an exchange filing on Thursday, the company said it emerged as the winning bidder for the development of an all-weather, deep-water, greenfield port at Keni in Karnataka on a public-private partnership basis. (Read More)
Ashutosh Somani of JM Financial views on Shyam Metalics and Energy: Realisations play spoilsport; additional capex to offer growth optionality
BUY INR 520
Shyam Metalics (SMEL) reported EBITDA of INR3bn, significantly lower than JMfe of INR4bn, primarily tracking lower realisations. EBITDA/ton stood at INR6k for 2QFY24, vs INR7.8k/t in 1Q. SMEL’s additional capex highlights the company’s plan to move from metallic to finished steel products. Further, SMEL’s strategy to foray into niche business segments - Aluminium foil, Stainless steel TMT and colour coated sheets will offer growth optionality, besides improving SMEL’s margin profile. Shyam Metalics offers a unique play in the Indian metals space, with a combination of a) increasing contribution from finished steel and valued added segments and b) diversified business across the steel value chain. The company has executed capacity expansion plans with precision over the past few years. Capital allocation towards niche business segments augur well for the company. Maintain Buy.
Kalyani Cast Tech's shares witnessed a robust debut on BSE SME, listing at ₹264.10, a remarkable 90% increase from the issue price of ₹139. After the stellar start, the shares were locked in a 5% upper circuit. As of 10:08 IST, Kalyani Cast Tech shares were trading at ₹277.30 each. The IPO's price band was set between ₹137 to ₹139, and the lot size allowed investors to bid for a minimum of 1,000 shares and in multiples thereof. (Read More)
Oil headed for a fourth weekly loss after sinking into a bear market as signs of healthy supplies and rising stockpiles offset attempts by OPEC leaders Saudi Arabia and Russia to keep declines in check.
West Texas Intermediate traded near $73 a barrel after dropping more than 20% from a high in September. Global benchmark Brent plunged almost 5% on Thursday. The declines followed a build in US crude inventories, and were likely amplified by automated selling programs.
Crude’s run of four straight weekly declines — the longest losing streak since May — has come despite collective and voluntary supply cuts by the Organization of Petroleum Exporting Countries and its allies. The losses have also been abetted by the evaporation of an Israel-Hamas war risk premium as fears the conflict would expand and disrupt oil supplies have so far not eventuated. (Bloomberg)
Investors and market observers are closely watching the Indian Railway Catering and Tourism Corporation (IRCTC) share price during Friday's trading, as the stock is now trading ex-dividend. The company's board of directors has announced an interim dividend of ₹2.50 per share for the financial year 2023-24. The record date for determining eligible shareholders for the interim dividend payment has been set as 17th November 2023. (Read More)
The ABG Shipyard group company Vadraj Cement will be sold under the Insolvency and Bankruptcy Code process, and potential buyers include an Adani group entity, Sajjan Jindal-owned JSW Cement, and ArcelorMittal Group, people with knowledge of the development told Economic Times (ET).
After Vadraj Cement was sued by trade creditor Beumer Technology India in August 2018 to recover unpaid debts, the Bombay High Court ordered the company to be wound up.
"But frustrated with the slow progress in selling the assets, the court agreed to transfer the debt resolution process of the cement company to IBC," one of the persons cited above said, mentioned ET in its news report. (Read More)
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services: There are some important trends which will impact the market in the near-term. One, the big macro driver of this two day rally in the market - peaking and declining US bond yields - is very much in place. This will continue to impart resilience to the market. Two, the sharp decline in Brent crude to $ 77.5 is a positive for India’s macros and favourable for sectors that consume petroleum inputs like aviation, tyres and paints. Three, and this is a negative factor, the RBI action raising the risk weighting on unsecured loans is sentiment negative for financials."
It is important to understand that FIIs turning buyers is an important shift in tune with the declining bond yields in the US. In the near-term, IT, automobiles, telecom and construction-related segments will attract more buying since financials will see the temporary impact of the RBI action.
The Maharashtra state government has modified Development Control Rules (DCR) for the Dharavi Redevelopment Project (DRP). The latest notification permits the use of Transfer of Development Rights (TDR) without indexation. This adjustment is expected to enhance the value of TDR generated from DRP for the Adani Group. Additionally, the new mandate requires all city builders to purchase the initial 40% of their necessary TDR exclusively from DRP. (Read More)
Manu Rishi Guptha, Founder and CEO of MRG Capital: RBI tightening norms on Personal loans, Credit card debt of banks and NBFCs and on NBFC loans of banks in terms of capital requirements will be the main driving point for markets today. Markets are expected to react negatively as these loans are the major loan growth drivers for banks and NBFCs particularly in the last two quarters. The increased capital restrictions by RBI will increase costs and so will lead to higher interest rates further leading to drop in demand for these loans. Private banks and NBFCs might feel the heat the most and Public sector banks less so as these loans form a lesser part of their book. Apart from Bank Nifty, Nifty too might see some pressure as these RBI restrictions will hit the consumption boom in the country to some level.
Falling crude prices will offer some support to the markets but this is negative for big index stocks like Reliance and ONGC. Completion of Diwali festive period and quarterly result releases leave the market with no fresh triggers for continued upside momentum. So, today’s bad news from RBI will most likely be used by short term traders to book profits gained in the last few sessions in the market.
19580 might offer some support to Nifty. If broken, Nifty can test 19460 and find further support at 19300. For Bank Nifty, 43800 is possible at the open and any further selling pressure can take it to 43300 levels.
The Indian rupee is likely to open little changed on Friday amid a further decline in oil prices and persistent dollar buying interest.
Non-deliverable forwards indicate rupee will open at 83.23-83.24, nearly unchanged from the previous session.
Brent crude on Thursday dropped 4.6% to the lowest since July on worries over demand. The benchmark was hovering near $77.50 in Asia hours and is headed for its fourth straight weekly decline.
The rupee's rally to near 83 earlier this week faced significant resistance. (Reuters)
Asian stocks fell Friday as a rally fuelled by the likely end of US interest rate hikes ran out of puff, while Alibaba dragged Hong Kong down after saying it would cancel the planned spinoff of its cloud computing arm.
After an exciting few days on trading floors, the week headed for a tepid finish, with Wall Street drifting even as a forecast-beating jump in US jobless claims added to optimism the central bank would not tighten again.
The latest labour market figures follow weaker-than-expected prints on consumer and producer price inflation, which indicated more than a year of rate hikes were having the desired effects. (AFP)
Gandhar Oil IPO price: Gandhar Oil IPO price band has been set in the range of ₹160 to ₹169 per equity share of face value of ₹2. Gandhar Oil IPO date of subscription is scheduled for Wednesday, November 22, and will close on Friday, November 24. The allocation to anchor investors for Gandhar Oil Refinery IPO is scheduled to take place on Tuesday, November 21. (Read More)
Fedbank Financial Services has set the price band for its initial public offering (IPO) in the range of ₹133 to ₹140 per equity share, with a face value of ₹10. The IPO subscription period is scheduled to run from Wednesday, November 22, to Friday, November 24. Anchor investors' allocation for the Fedfina IPO is slated for Tuesday, November 21.
The floor price is set at 13.30 times the face value of the equity shares, while the cap price is set at 14 times. The price to earnings ratio, based on diluted earnings per share for the financial year 2023 at the cap price, is notably high at 25.04. This is slightly lower than the average industry peer group ratio, which stands at 25.57.
For potential investors, the Fedbank Financial Services IPO lot size is 107 equity shares, with subsequent multiples of 107 equity shares. (Read More)
Sajjan Jindal-led JSW Infrastructure Ltd on Thursday announced it has acquired the rights to develop a greenfield port in Karnataka with an initial capacity of 30 million tonnes per annum (mtpa). The project is set to be completed in the next five years.
The company emerged as the winning bidder for developing the all-weather, deep-water Keni port on a public-private partnership basis at a cost ₹4,119 crore. It will operate the project for 30 years. (Read More)
Vaishali Parekh, Vice President — Technical Research at Prabhudas Lilladher suggests these stocks for day trading:
1] Hero Motocorp: Buy at ₹3280, target ₹3410, stop loss ₹3235;
2] Dr. Lal Pathlabs: Buy at ₹2680, target ₹2800, stop loss ₹2640; and
3] Havells India: Buy at ₹1279, target ₹1340, stop loss ₹1258. (Read More)
The Securities and Exchange Board of India (Sebi) will propose a review of its regulations for delisting stocks at its next board meeting, chairperson Madhabi Puri Buch said.
“There was a popular belief that we would never review the delisting regulations and that we would stay with the reverse book-building process. A consultation paper has already been floated, and Sebi has received a lot of feedback. At the next board meeting, we are taking that proposal to our board," Buch said while addressing Ficci’s Capital Markets Conference, or CAPAM 2023, in Mumbai on Thursday. (Read More)
Bank of Baroda has scheduled a meeting of the Capital Raising Committee tomorrow, November 18, 2023, to discuss and finalise the issuance of Tier I and Tier II debt capital instruments and long-term bonds for the financing of infrastructure and affordable housing within the board-approved capital raising plan.
“We advise that the Meeting of the Capital Raising Committee of our Bank is scheduled to be held on 18.11.2023 to discuss and finalize the issuance of Tier I and Tier II debt capital instruments and long-term bonds for the financing of infrastructure and affordable housing within the board-approved capital raising plan," the lender said in an exchange filing dated November 15. (Read More)
