PremiumWith Russian indefinitely extending the halt in the gas flow, the European markets tumbled. Asian markets had an underwhelming day with Nikkei and Hang Sang closing in red but Shanghai Index ended in the green. US market will remain closed today for Labor Day.
Indian benchmark indices shrugged off global negative cues and remained stable and green throughout the whole session, adding 0.7% on Monday.
Sensex climbed 442 points to close at 59,245, whereas Nifty closed at 17,666, a gain of 126 points.
Media, Metal, Realty and Bank indices shined in today's session and all sectoral indices ended in the green, though Oil & Gas ended almost flat.
Among stocks, Hindalco and JSW Steel surged 3% and topped the charts. Sun Pharma, ITC and NTPC also ended with decent gains.
Bajaj Auto and Nestle India lagged in today's trading and gave up ground to end in red.
European shares sank on Monday after Russia extended a halt on gas flows down the Nord Stream 1 pipeline leading to worries over energy prices and prompting governments to announce emergency measures.
Asia had a mixed day otherwise. Japan's Nikkei share average fell for a fourth straight session on Monday, tracking Wall Street's weak performance last week following weak jobs data. The Nikkei edged down 0.11%.
The Shanghai Composite Index advanced 0.4% after the Chinese government tightened controls on movement in the southern business centre of Shenzhen following virus outbreaks. The Hang Seng in Hong Kong tumbled 1.2%.
Shares of New Delhi Television (NDTV) hit the 5 per cent upper circuit for eight consecutive sessions and touched a fresh 52-week high on Monday after Adani Group's offer to acquire a sizable stake in the news channel company.
At 2.59 pm, the shares traded with a five per cent upper circuit at ₹545.75.
NDTV shares have risen 87% in the past month. On August 23, Adani Group announced a plan to buy a majority stake in NDTV.
So far in 2022, it rose a whopping 375%. (ANI)
Reliance Industries' fourth investment cycle of an estimated USD 50 billion spending over the next three years could help the firm double its earnings, a report said.
The firm's "fourth investment cycle this century has significant differences to past cycles, underappreciated energy tailwinds and the potential to double profits by 2027," Morgan Stanley said in a report.
The spending is planned on chemicals, 5G, retail and new energy over the next three years. (PTI)
Government-owned natural gas explorer and producer, Gail on Monday traded on a bullish note ahead of its bonus issue. The shares were near the day's high. Gail has announced bonus shares in the ratio of 1:2. The stock will turn ex-bonus tomorrow ahead of its record date. Bonus shares are fully paid-up additional shares offered by a listed company to its existing shareholders free of charge as a move to capitalise on its profits or reserves. Gail has recorded a second successive quarter of robust operational growth in the June 2022 period.
Servotech Power Systems has bagged a project from the Uttar Pradesh New & Renewable Energy Development Agency (UPNEDA) for building 4.1 MW of solar power plants across the state.
UPNEDA is the nodal agency for the implementation of solar energy schemes in the state.
In a statement on Monday, Servotech Power Systems said "it has bagged a large-scale, state-spanning grid-interactive rooftop solar power plant project from UPNEDA. The project involves building 4.1 MW of solar power plants across the state."
The total contract value of the entire project is approximately ₹23.50 crore, and it will be completed within 4 months from the date of awarding the project. (PTI)
MEDIUM-TERM TECH PICK
BUY PVR LTD CMP: 1905 TRGT: 2110 SL: 1830
The stock has overall maintained an uptrend indicated by the ascending channel pattern on the daily chart recently taking support near 1800 levels and with improving bias has witnessed a decent pullback. The RSI indicator has indicated a trend reversal from the oversold zone and signaled a buy with immense upside potential visible. With the chart looking attractive, we suggest to buy and accumulate this stock for an upside target of 2110 keeping the stop loss of 1830.
Global oil prices were higher today ahead of OPEC+ meeting later in the day. Oil prices rose more than $2 a barrel to $95.44 a barrel, extending Friday's gains. Analysts are divided whether the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, may decide to keep current output levels or even cut production to bolster prices, despite supplies remaining tight. India, the world's third largest importer of oil, benefits from a fall in prices as it brings down imported inflation. (Full Report)
Sri Lanka is contending with a high risk of default on its local currency bonds as it seeks to reduce debt, key to winning financing from the International Monetary Fund to bring relief to the crisis-hit island.
Fitch Ratings’s ‘CCC’ rating on long-term local currency debt that was affirmed in May “reflects a high risk that local-currency debt will be included in debt restructuring," Sagarika Chandra, Hong Kong-based associate director, wrote in a statement. Sri Lanka had $30 billion of foreign debt and $34 billion of domestic debt as of the end of April.
Sri Lanka defaulted on its dollar debt in May for the first time, and must clinch a restructuring deal with private bondholders and official creditors including China, Japan, and India to get the IMF board’s nod for a $2.9 billion loan. The nation faces a lawsuit in a US court over its proposed debt recast, with one of the bondholders, Hamilton Reserve Bank Ltd., accusing Sri Lanka of setting terms that favor domestic banks. (Bloomberg)
Auto and auto ancillary stocks have been in the slow lane for some time now. New regulations and then the pandemic both hurt demand, and the supply of components.
But things have started to change now. There is pent-up demand for autos. The supply chain is improving. And of course, with the prospect of strong economic growth, commercial vehicles are starting to see some traction too.
In fact, so strong is the sentiment that when broader markets experienced a correction, the BSE auto index hit an all-time high.
Here are the factors driving the rally - (Full Report)
REC Ltd will seek shareholders' approval to raise up to ₹75,000 crore through issuance of bonds next week.
The funds are proposed to be raised through issuance of debentures on private placement basis during a period of one year from the date of passing of the resolution, in one or more tranches, as per the AGM notice.
The limit of ₹75,000 crore shall be within the overall revised borrowing limit.
The annual general meeting (AGM) of shareholders is scheduled for September 16, 2022.
REC will also seek shareholders' approval to authorize the board to mortgage/create charge on immovable and/or movable properties of the company, for securing loan up to ₹4,50,000 crore. (PTI)
The Supreme Court on Monday said Adani Ports and Special Economic Zone’s disqualification from the Visakhapatnam Port Trust (VPT) cannot be treated as the basis for company’s ineligibility to participate in future tenders. The apex court has asked Adani Ports to withdraw its petition which has been agreed upon by the company.
Adani Ports had in June moved the Bombay High Court challenging the Board of Trustees of Jawaharlal Nehru Port Authority (JNPA) for disqualifying its bid to upgrade a container terminal in Navi Mumbai. (Full Report)
Finance minister Nirmala Sitharaman on Monday said windfall tax on petroleum products, crude is not ad hoc, but being charged in regular consultation with the industry.
Addressing an event organized online, the minister said it is unfair to call windfall tax as ad hoc, because the tax rate and its resetting are done in complete consultations with the industry.
"The very idea was implemented after taking the industry into full confidence," she said at a function organized by Elara Capital.
"When we suggested the idea we had told the industry that the tax rate will be reviewed every 15 days and we have been doing that," Sitharaman said. (PTI)
European shares tumbled on Monday after Russia extended a halt on gas flows down the Nord Stream 1 pipeline to Europe, sparking worries over energy prices and growth and spurring governments to announce emergency measures.
The Europe-wide STOXX 600 index fell 1.6% by 0713 GMT, while Germany's DAX index sank 2.8%.
German utilities including Uniper, RWE, E.ON and PNE dropped between 3.5% and 11%.
Gazprom announced on Friday that the main pipeline to Germany would remain closed indefinitely, against expectations of a restart on Saturday after three days of maintenance work. (Reuters)
Specialty pharmaceutical and healthcare ingredient and intermediate company — Blue Jet Healthcare Limited has filed its Draft Red Herring Prospectus (DRHP) with the markets regulator, Securities and Exchange Board of India (SEBI), to raise funds through an initial public offering (IPO). The public issue with a face value of ₹2 per equity share is 100 per cent offer-for-sale (OFS) of up to 21,683,178 equity shares by promoter and selling shareholders, which comprises up to 18,366,311 by Akshay Bansarilal Arora, up to 3,316,867 by Shiven Akshay Arora (“Selling Shareholders"). (Full Report)
Japan's Nikkei share average fell for a fourth straight session on Monday, tracking Wall Street's weak performance last week, amid absence of market-moving cues due to a U.S. market holiday.
The Nikkei edged down 0.11% to close at 27,619.61, while the broader Topix had inched down 0.07% to 1,928.79.
U.S stocks ended the trading week on a subdued note on Friday, as early gains from a jobs report that showed a labour market that may be starting to loosen gave way to worries about the European gas crisis. (Reuters)
For auto component manufacturers, demand may be staging a recovery, but high input costs are a matter of concern. However, some respite seems to be on the anvil. Ebitda margin of auto component makers is expected to increase by about 100 basis points y-o-y on an average despite a weak performance in H1CY22. (Full Report)
For a change, indices are stable on Monday. Metal, Media and Realty were in the front of the rally, whereas Auto and Oil & Gas remained flat.
Reliance Power and its subsidiary have inked a pact with Varde Partners for availing debt of up to ₹1,200 crore.
In a regulatory filing, Reliance Power said the company and its subsidiary have entered into a indicative Memorandum of Understanding (MoU) with Varde Partners for availing debt of up to ₹1,200 crore (USD 150 million) "for settlement and discharge and/or acquisition and restructuring of certain financial debt availed by Reliance Power."
Varde Partners is a leading global alternative investment firm specializing in credit and credit-related assets.
The drawdown of the debt will be subject to finalization and execution of binding documents and all requisite approvals including regulatory approvals as per applicable rules/ laws/ regulations, the filing added. (PTI)
Arafat Saiyed - senior research analyst at Reliance Securities: The IPO is valued at 1.6x FY22 Book. TMB is one of the oldest banks with 100+ years of legacy. TMB focussed on diversifying product portfolio to access more client base. It continues to expand relationship banking facilities to increase network. It intends to focus more on fee-based products such as issuing debit cards, credit cards, insurance, online bill payment, DP services, etc. In view of its improving assets quality, lower NPAs, focus on strategic expansion, growing deposit base with a focus on low-cost retail CASA, strong financial track record and valuation comfort.
The Securities and Exchange Board of India (Sebi) has restructured its high-level panel on cyber security that suggests measures to safeguard the capital markets from such attacks. The committee, which has now six members, will be chaired by Navin Kumar Singh, DG at National Critical Information Infrastructure Protection Centre (NCIIPC), news agency PTI report said. (Read More)
The euro fell below 99 cents for the first time in nearly two decades, while sterling was on the ropes on Monday as Russia's halt on gas supply down its main pipeline to Europe sparked concerns over energy prices and growth.
The euro slid to $0.9880 in Asia trade, the lowest level since 2002, while sterling hit a new 2-1/2-year low at $1.14445, and remained close to its pandemic trough.
Meanwhile, the U.S. dollar index, which measures the greenback against a basket of six currencies with the euro the most heavily weighted, hit a new two-decade high, surging to a top of 110.25.
Russia scrapped a Saturday deadline for flows down the Nord Stream pipeline to resume, citing an oil leak in a turbine. It coincided with the Group of Seven finance ministers announcing a price cap on Russian oil. (Reuters)
Despite Nifty 50 and BSE Sensex delivering muted 1.25 per cent return in last one year, all Tata group stocks have generated alpha return in this period. In fact, some of the Tata group stocks figure in the list of multibagger stocks in India. Shares of Automotive Stampings, TTML and Indian Hotel are one of such Tata stocks that have at least doubled shareholders money in last one year. However, Automotive Stampings and Assemblies Ltd shares are exception. This multibagger auto stock has delivered more than 800 per cent return in last one year, generating alpha return by a huge margin. (Full Report)
Shares of Federal Bank jumped nearly 7% to hit all-time high level of ₹129 apiece on the BSE in Monday's early deals. The bank stock has been in upward trend since the last few days as it is up about 12% in the last five trading sessions. The brokerage has increased its target price on the bank stock to ₹149 per share. (Full Report)
India's dominant services industry grew faster than expected in August amid favourable demand conditions and some easing in cost pressures. The S&P Global India Services Purchasing Managers' Index or PMI index rose to 57.2 in August from four-month low of 55.5 in July, surpassing the 55.0 estimate in a Reuters poll. It remained above the 50-mark separating growth from contraction for a 13th straight month. (Full Report)
The rupee appreciated 5 paise to 79.82 against the US dollar in early trade on Monday in line with a positive trend in domestic equities.
Forex traders said the rupee is trading in a narrow range as the strengthening of the American currency in the overseas market and rising crude oil prices are weighing on investor sentiment.
At the interbank foreign exchange, the rupee opened at 79.84 against the dollar and touched 79.82 in initial deals, registering a gain of 5 paise over the last close.
On Friday, the rupee closed at 79.87 against the dollar. (PTI)
For the second consecutive day, India on Monday recorded a decline in daily Covid-19 cases with the country logging 5,910 new infections in the last 24 hours, according to Union Health Ministry data.
As India continues to saw downfall in active caseload, the country's active cases drop below 55,000 mark, that is, 53,974. Yesterday, the country had 55,114 active cases, the health ministry said. (Full Report)
Reliance Power along with its subsidiary entered into a Memorandum of Understanding (MoU) with Varde Partners for availing debt of up to ₹1,200 crore (around USD 150 million).
Varde Partners is a leading global alternative investment firm specializing in credit and credit-related assets. Varde currently manages over USD 13 billion in assets with teams in North America, Europe, and the Asia Pacific focused, its website showed.
This proposed debt will be used for settlement and discharge and/or acquisition and restructuring of certain financial debt availed by the Reliance firm, it said in a regulatory filing to the exchanges on Monday morning. (ANI)
Tirthankar Das, technical & derivative analyst, retail, Ashika Stock Broking: On the technical front, Nifty formed a sideways inside day formation following the long Bullish candle registered on Aug 30, also there are evidence of reversal pattern in weekly time frame hence in coming sessions, key thing to watch will be a faster retracement above August highs of 18000 that will signal end of the ongoing corrective phase. Else, prolonged consolidation in 17200-17800 range is expected to continue. On the oscillator front, the 14-period RSI has witnessed a sell crossover and presently trading below the 60-level mark. Thus, one need to avoid trading aggressively amid global nervousness. Considering the present situation, a bare minimum correction of 38.6% of the entire rally from 15,183 to 17,992 comes around 16900 followed by 50% correction at 16600. On the upside present setup indicates that Nifty can move towards 17,992 followed by 18,114 in the coming days with immediate support stands at 17,350 and Index need to sustain above the said level with some authority for the bulls to strengthen their stance. Hence during the day intraday decline towards 17430-17470 can be used for creating long position for the target of 17750.
Singtel’s 3.3% stake sale to Bharti Telecom (BTL) will drive a 1.7% increase in shareholding of Mittal Family to 25.5%, which global brokerage Jefferies views positively. However, it will increase BTL’s debt, which will need higher dividends from Bharti for servicing interest and will eventually lead to BTL selling stake in Bharti Airtel to repay the debt, it said in a note. (Full Report)
Saurabh Mukherjea portfolio stock GMM Pfaudler has hit 52-week high of ₹1,846.65 on NSE. One of the Saurabh Mukherjea's little champ stocks, GMM Pfaudler shares have been in uptrend since 23rd August 2022 and the stock finally hit 52-week high on Friday last week. On Friday session, this chemical stock opened upside and went on to hit intraday high of ₹1,846.65 on NSE, logging near 11.50% rise from its Thursday close. However, the Saurabh Mukherjea stock finally settled at ₹1827.55 apiece, around 10.50 per cent above its Thursday close. (Read More)
Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One Ltd: It was certainly not an easy-going week for market participants. Week on week, we may not see any notable change, but it certainly does not portray the real picture of what market has undergone, especially in the first half of the week. From a technical standpoint, the initial move towards 17166 was a part of ‘Price-wise correction’ which completed its 50% retracement of the previous up move from 16438 to 17992. Now, what we witnessed in the last couple of days can be interpreted as a ‘Time-wise correction’ which is also an essential part of market behavior. Hence, 17200 – 17000 has now become a sacrosanct zone and any decline in the forthcoming week should ideally be utilized as a buying opportunity. Before this, 17400 is also to be seen as immediate support.
On the higher side, 17700 – 17800 is to be treated as a sturdy wall. The moment we surpass this (which is likely), we may see the next leg of the rally getting unfolded to not only challenge the 18000 mark but it may even go beyond it in coming weeks. Hence, traders are advised to remain sanguine and focus on stock specific actions till the time key indices continue with their consolidation mode.
Singapore-based American investor and financial commentator Jim Rogers shares his views on the current market volatility, inflation, threats of a looming recession, and the emerging markets, as well as value commodities and other asset classes. Edited excerpts from an interview:
STOCK IN FOCUS
Bharat Forge (CMP Rs.767)
We have BUY rating on BHFC with a Target Price of Rs880, valuing the stock at a P/E multiple of 30x on FY24E earnings.
Intraday Picks
MCDOWELL-N (PREVIOUS CLOSE: 824) BUY
For today’s trade, long position can be initiated in the range of Rs812- 807 for the target of Rs834 with a strict stop loss of Rs794.
SHREECEM (PREVIOUS CLOSE: 21,088) SELL
For today’s trade, short position can be initiated in the range of Rs21,180-21,270 for the target of Rs20,760 with a strict stop loss of Rs21,510.
TATACHEM (PREVIOUS CLOSE: 1,120) SELL
For today’s trade, short position can be initiated in the range of Rs1,121- 1,130 for the target of Rs1,070 with a strict stop loss of Rs1,146.
Oil surged on the possibility that OPEC+ may decide to trim production, and as Europe’s energy crisis worsened after the Group-of-Seven nations endorsed a plan to try to cap the price of Russian crude.
West Texas Intermediate advanced above $88 a barrel after sinking by almost 7% last week on concerns that slowing global growth and anti-virus lockdowns in China would hurt demand. The Organization of Petroleum Exporting Countries and allies including Russia will convene later Monday to set production levels for October after Saudi Arabia flagged the possibility of a reduction. (Bloomberg)
Delta Corp will be under the F&O ban stock list. The stock will be under the ban for the F&O segment as it has crossed 95% of the market-wide position limit (MWPL), as per the NSE. (Full Story)
The initial public offering (IPO) is most likely to debut on BSE and NSE on Tuesday as the tentative DreamFolks IPO listing date is 6th September 2022. Meanwhile, after DreamFolks IPO allotment focus has shifted towards grey market as some people take grey market premium (GMP) as a hint in regard to listing premium from the IPO. For such IPO investors, there is a piece of good news from the primary markets. According to market observers, DreamFolks shares are available at a premium of ₹110 in the grey market today. However, market experts believe that DreamFolks share listing would be around ₹400 apiece. (Full Report)
Indian government bond yields are likely to ease in early trades on Monday, tracking a similar move in U.S. Treasury yields, while sentiment remains bullish on bets of inclusion of local debt in global indexes.
The benchmark 10-year Indian government bond yield is likely to trade in the 7.20%-7.26% band, a trader with a private bank said. The yield has risen four basis points in last two sessions to end at 7.2318%.
"U.S. Treasury yields have fallen after their jobs data, and bets of aggressive rate hike has also come down, so local bonds should see some buying bias," the trader said. (Reuters)
Delta Corp has been put as part of F&O ban list by the stock exchange for today. Only one stock has been put under the ban for trade on Monday, September 5, 2022 under the futures and options (F&O) segment by the National Stock Exchange (NSE). The counter has been put on ban under the F&O segment as it has crossed 95% of the market-wide position limit (MWPL), as per the NSE.
Foreign investors have pumped in a little more than ₹51,200 crore into the equity markets in August, making it the highest inflow in 20 months, amid improving risk sentiment and stabilisation in oil prices. While inflation continues to be at elevated levels, of late, it has risen less than expectation, thus improving sentiments. (Full Report)
On September 5, the UK will find out who will be the country's new prime minister. Liz Truss is the front-runner to succeed Boris Johnson and lead the nation as it struggles with an escalating cost-of-living crisis. If Liz Truss prevails in the race for the Conservative leadership, the 47-year-old will become Britain's third female prime minister. Her opponent Rishi Sunak wants to make history by becoming the first non-white person to hold the position. (Full Report)
Asian shares slipped on Monday while the euro took a fresh spill after Russia shut a major gas pipeline to Europe, leading some governments there to announce emergency measures to ease the pain of soaring energy prices.
The euro was down 0.4% at $0.9908 and looking likely to test its recent 20-year low of $0.99005 as markets priced in more risk of a European recession.
Germany announced plans to spend 65 billion euros ($64.7 billion) on shielding customers and businesses from rising costs, while Finland and Sweden offered liquidity guarantees to keep power companies open.
Oil prices jumped along with the whole energy complex as a holiday in U.S. markets made for thin trading conditions. News of more coronavirus lockdowns in China only added to the jittery mood. (Reuters)
India's GDP growth of 13.5 per cent in the April-June quarter of 2022-23 has turned out be a cause for 'disappointment and concern', as there was expectation of a bigger bounce back from the first quarter of last year when economic activity was crippled by the Delta wave of COVID-19, former RBI governor D Subbarao said on Sunday.
Subbarao added that risk factors for the country's growth outlook in the short term include high commodity prices, possibility of a global recession, monetary tightening by the RBI and an uneven monsoon that could threaten crop output, especially of rice.
"The economy clocked growth of 13.5 per cent in the first quarter (April-June) of this fiscal year which would have been cause for celebration in any other circumstance.
"In the event, it's turned out be a cause for disappointment and even concern," he told PTI in an interview. (PTI)
Digital financial services firm One97 Communications, which operates under the Paytm brand, on Sunday denied any link with the merchants that are under the Enforcement Directorate scanner in the Chinese loan app case.
Paytm said that none of the funds frozen by the Enforcement Directorate (ED) belongs to it or any of its group firms.
"As a part of ongoing investigations on a specific set of merchants, the ED has sought information regarding such merchants to whom we provide payment processing solutions. We wish to clarify that these merchants are independent entities, and none of them are our group entities," Paytm said in a regulatory filing.
The ED on Saturday said it has conducted raids at six premises of online payment gateways, such as Razorpay, Paytm and Cashfree in Bengaluru, over the alleged irregularities in instant app-based loans "controlled" by Chinese persons. (PTI)
Reliance Retail Ventures Ltd (RRVL) has bought a controlling stake in makeup and personal care brand Insight Cosmetics, said two people aware of the deal, marking the entry of the billionaire Mukesh Ambani-owned company into the cosmetic business. Insight Cosmetics was launched by Mumbai-based entrepreneur Dinesh Jain in 2001. (Full Report)
India’s trade deficit widened to $28.68 bn during August as imports climbed sharply by 37% to $61.68 billion but exports decline marginally to $33 billion, official data released by the commerce and industry ministry released late on Saturday showed.
Amid fears of demand slowdown in large export markets such as the US and EU and a prolonged lockdown in China, India’s exports in August declined to $33 billion compared to $36.27 billion in July.
“Imports of petroleum products form a large share of import and its been rising as coal and petroleum are being stocked to ensure energy security. Ports are chocked with coal at the moment. Rising imports are not a concern as it is feeding into exports. We need to focus on boosting exports. (Full Report)
Cyrus Mistry, the 54-year-old former chairman of Indian conglomerate Tata Sons, died in a road accident near financial capital Mumbai on Sunday, Indian police said.
Mistry was ousted as chairman of Tata Sons, the holding company of the $300-billion salt-to-software Tata conglomerate, in a boardroom coup in 2016, sparking a long-drawn-out legal tussle on which India's top court eventually ruled in Tata Group's favour.
The accident took place in Palghar, located about 100 kilometres (62 miles) north of Mumbai, on Sunday afternoon. Mistry was travelling to Mumbai from Gujarat with three others, B. Patil, the top police official in Palghar district, said.
A senior Mumbai police official said the car in which Mistry was travelling had rammed into a divider, and that he had died at the accident site. (Reuters)
Wall Street stocks ended the week with losses Friday as an early-session rally fizzled following government data indicating employers slowed the pace of hiring in August.
Data showed the US economy added 315,000 jobs last month, which was in line with what economists were expecting, but lower than the 526,000 posted in July.
Stocks initially rose on the report as markets bet the moderating employment situation would ease pressure on the Federal Reserve to hike interest rates.
But markets reversed course midday after Russia's move to halt natural gas deliveries to Germany sharpened worries over a European recession.
The Dow Jones Industrial Average ended 1.1% lower at 31,318.44.
The broad-based S&P 500 fell 1.1% to 3,924.26, while the tech-rich Nasdaq Composite Index shed 1.3 percent to 11,630.86. (AFP)
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