PremiumIndian indices on Thursday ended in the green as both the Sensex and Nifty gyrated between gains and losses amid weak Asian trends. Indices remained volatile for most part of the day as investors were worried that aggressive policy tightening by central banks could stifle global economic growth. However, in the noon trade, the indices made smart recovery. European equities slipped ahead of a European Central Bank decision that will put the region’s monetary policy on a path of tightening and help close the gap with global peers. Oil prices hovered near three-month highs on Thursday after parts of Shanghai imposed new Covid-19 lockdown measures. Shares were flat in Japan and South Korea, while it fell in Hong Kong, Australia, and Shanghai.
Indian indices on Thursday closed higher, snapping 4-day losing streak, led by buying support in pharma, energy, and IT stocks.
The Sensex advanced 427.79 points, or 0.78%, to close at 55,320.28, while Nifty50 gained 121.85 points to end at 16,478.10. Sectorally, metal stocks came under heavy selling pressure, while IT, energy, and telecom sectors ended in the green.
On the 30-stock index, the most gains were made by Reliance, DRL, Airtel, and TechM, among others, while Tata Steel, UltraTech, and NTPC were among the biggest losers.
On Nifty50, DRL, BPCL, and Reliance made the most gains, while Tata Steel, Grasim, and Shree Cement were among the biggest laggards.
Global wealth rose 10.6% last year to reach a record high of $530 trillion in 2021 and is set to continue rising in all regions despite inflationary pressures and Russia’s invasion of Ukraine.
Strong equity markets and a surge in demand for real assets such as property, wine and art drove the increase, according to a report by Boston Consulting Group. About $80 trillion of new wealth is likely to be created over the next five years.
“Wealth development is resoundingly resilient, and even against the backdrop of geopolitical turmoil the growth rate will remain positive," said Anna Zakrzewski, global leader of BCG’s wealth management arm.
China’s trade growth rebounded in May after anti-virus restrictions that shut down Shanghai and other industrial centers began to ease.
The rupee slipped 13 paise to hit its intra-day record low of 77.81 against the US dollar on Thursday, weighed down by elevated crude oil prices and persistent foreign capital outflows.
At the interbank foreign exchange, the rupee opened at 77.74 against the American dollar, then fell further and touched its intra-day record low of 77.81, registering a fall of 13 paise from the last close.
On Wednesday, the rupee recovered from its record low to close 10 paise higher at 77.68 against the American currency.
The Reserve Bank of India (RBI) on Wednesday raised the key interest rate by 50 basis points, the second increase in five weeks, to rein in the rise in prices that it saw continuing to hurt consumers in the near term.
Repo rate hiked further, MPC focused on containing inflation: MPC unanimously voted to further hike policy repo rate by 50bps to 4.9%. It remains focused on withdrawal of accommodation to ensure inflation is contained within the target while supporting growth. There is a change in the commentary from ‘withdrawal of ultraaccommodative’ stance to ‘withdrawal of accommodative’ and that upside risks to inflation persists, and appear more hawkish. The move reflects reversal of rate action in 2020 and also points towards further rate hikes during the year and get closer towards the pre-pandemic repo rate.
No CRR hike: Post CRR hike of 50bps in May (that would have sucked systemic liquidity to the extent of Rs870bn), systemic liquidity has moderated. There was no further hike in CRR. While normalising the pandemic related extraordinary liquidity accommodation, RBI will ensure adequate liquidity to meet the productive requirements.
Will trigger further increase in deposit and lending rates: Recently, post repo rate hike in May, MCLRs were hiked by 10-30bps by leading banks. Banks have also raised deposit rates across maturity buckets with peak retail TD rates being at 5.75%. Also, wholesale peak TD rates are in the range of 5.25-5.75% for leading private banks. Now with another 50bps repo rate hike, rates will be further revised upwards.
We believe cloud opportunities will be beneficial for Indian IT service providers given – 1) 51% of IT spending in the areas of application software, infrastructure software, business process services and system infrastructure will shift to public cloud by CY25 (vs 41% in CY22), according to Gartner; 2) worldwide spending on public cloud services to increase from US$411bn in CY21 to US$495bn in CY22 with IaaS expected to grow the fastest (Gartner); and 3) cloud sustainability initiatives to start with leading cloud providers.
Surge in cloud adoption could prove to be a growth lever for IT service providers on the back of cloud platforms created by them to help speed up cloud transformation journey of clients, thereby improving the utilisation of cloud capacity subscribed by clients, and thus, translating bookings into revenues for hyperscalers partners. With Indian IT players already building strong partnerships with hyperscalers, we believe pickup in spends on cloud transformation should make Indian IT a key beneficiary as well. Companies like TCS, INFY, HCLT and TECHM have developed strong organic cloud platforms and it is yielding good results. We believe among tier-2 players, MTCL, LTI and PSYS have strong collaborations and are expanding aggressively in cloud opportunities.
A consortium of Apollo Global Management Inc. and Reliance Industries Ltd. has made a binding offer for Walgreens Boots Alliance Inc.’s international arm, people with knowledge of the matter said.
Shares of Life Insurance Corporation of India (LIC) continued to decline with the stock hitting a new record low of ₹723 apiece on the BSE in Thursday's afternoon deals. The stock is now about 25% down from its IPO issue price of ₹949.
Our neutral stance on paint industry (and stocks) is intact - a function of our inability and unwillingness to subscribe to BAAP (buy at any price) as believed by some market participants. We actively cover most listed paint stocks. Ratings: ADD - Akzo Nobel; HOLD - Asian Paints, Indigo Paints, Kansai Nerolac; REDUCE - Berger Paints (based on valuation).
Witnessing positive momentum for the 15th straight month, equity mutual funds attracted a net sum of ₹18,529 crore in May amid heightened volatility in stock markets and consistent selling by Foreign Portfolio Investors (FPIs).
The Reserve Bank of India (RBI) on Wednesday allowed credit cards to be linked with the unified payments interface (UPI), which will enable more people to make payments using the popular platform.
Most Asian and European markets fell Thursday as a rally in oil ramped up inflation fears, with top officials warning of more pain to come as the Ukraine war continues to push prices up and put further pressure on the global economy.
Buyers on Wall Street were in retreat again after data showed US crude and gasoline stockpiles sank, just as the summer driving season begins and a leading OPEC member warned demand would surge further as China reopens.
Adding to the gloom was the OECD's sharp downward revision of its global growth outlook and doubling of its inflation forecast.
The glum mood was only slightly offset by ongoing optimism that Beijing's tech crackdown was close to an end.
We estimate 20-22% CAGR in CIF and Receivables over FY22-24. Despite modelling 25 bps MDR reduction (partial recoup through opex), we estimate RoA/RoE to be 5.5-6%/24-26% which was the pre-pandemic metric (adjusted for capital base). We believe that stock price represents overstretched concerns on a) MDR reduction and lack of flexibility to recoup it, b) structural pressure on cost-income/profitability from increased competitive intensity, c) impact on growth from rising scale of the new-age card cos. and BNPL. Being the only listed pure-play credit card issuer with significantly higher profitability than Banks and NBFCs (in good times as well as bad times), SBI Cards would continue to command a premium valuation. Reiterate BUY with 12m PT of Rs1260.
Outstanding credit cards in the system in April grew 20.7% year-on-year to 75.2 million, the highest in the past 25 months, according to Digital Payments tracker report from Motilal Oswal Financial Services Ltd.
Shares of BLS International rallied about 10% to ₹195 apiece on the BSE in Thursday's early session after the company announced the acquisition of business correspondent Zero Mass Private Limited (ZMPL) for ₹120 crore in an all-cash deal.
Notwithstanding the inflation worries, the housing cycle continues to gather strength, said Jefferies, adding that the rising rates are associated with a booming property market and the other way around and rising prices, low inventory and strong affordability imply durability should add ~1ppt/ year to India's GDP growth rate over next 5 years.
The Indian stock market's benchmark Sensex was witnessing volatile trading with negative bias on Thursday dragged by selling pressure in infra, banking, and IT stocks.
The 30 stock S&P BSE Sensex was trading 34.73 points or 0.06 per cent down at 54,857.76 points at 11.36 am, against its previous day's close at 54,892.49 points.
Earlier, the Sensex started the day in the red at 54,514.17 points and slumped to a low of 54,507.41 points in the early morning trade. The Sensex turned positive in the late morning session rising to a high of 55,010.89 points.
The Sensex is trading in the negative for the fifth straight session. The index had lost 214.85 points or 0.39 per cent on Wednesday.
The Indian rupee hit a record low against the U.S. dollar on Thursday as the relentless surge in global crude oil prices raised concerns of a sustained rise in imported inflation, while weakness in domestic shares also hurt.
The partially convertible rupee was trading at 77.78/79 per dollar after touching a record low of 77.81. The previous life low of 77.7975 was touched on May 17.
Oil prices held firm near 13-week highs on Thursday after China reported stronger-than-expected exports in May, although new Shanghai lockdown restrictions capped gains.
The yen dropped to a new 20-year low versus the dollar on Thursday, and the euro inched higher ahead of a highly-anticipated meeting of the European Central Bank, which should offer insights into its monetary policy tightening plans.
The ECB is all but certain to flag an end to its long-running asset purchase programme at the end of this month, and promise a rate hike for July, but the size and pace of its tightening are uncertain.
State-owned CIL on Thursday said that it has floated its maiden tender to import 2.416 million tonnes of coal to ensure adequate supply of the fuel to power plants in the country.
The development assumes significance in the wake of the government making all efforts to build up stock of coal to avoid the reoccurrence of power outages, which happened in April on account of shortage of the fossil fuel.
"In a first-ever, Coal India Limited (CIL) on Wednesday floated an international competitive bidding e-tender, seeking bids for import of 2.41,6 million tonnes of coal," the company said in a statement.
Shares of AU Small Finance Bank started trading ex-bonus in Thursday's trading session, a day ahead of the record date for its bonus shares issue. AU Small Finance Bank shares plunged nearly 2% to ₹617 apiece on the BSE in today's early deals.
American Airlines and IndiGo have launched a codeshare agreement that allows the former to sell seats on the latter's flights operating on Delhi-Bengaluru and Delhi-Mumbai routes, a statement said on Thursday.
London copper prices crept lower on Thursday ahead of a monetary policy decision by the European Central Bank, although better-than-expected economic data out of top consumer China raised hopes of a demand recovery amid declining inventories.
Three-month copper on the London Metal Exchange was down 0.3% at $9,697 a tonne, as of 0518 GMT.
The most-traded July copper contract in Shanghai was up 0.1% at 72,800 yuan ($10,885.39) a tonne by the midday break.
Gold prices in India struggled near three-week lows amid firm US bond yields that lower the safe-haven appeal of zero-yielding gold. On MCX, gold futures were flat at ₹51,070 per 10 gram while silver edged up to ₹62,059 per kg. In global markets, gold prices slipped today ahead of key US inflation data, due later this week. Spot gold was down 0.1% at $1,852.21 per ounce, amid firm US 10-year Treasury yields.
Shares of Deepak Nitrite have fallen about 13% in the last five trading sessions amid reports of Gujarat govt issuing closure notice to chemical intermediate maker Deepak Nitrite over Nandesari explosions, on which the stock exchanges have also sought clarification.
The rupee slipped 10 paise to 77.78 against the US dollar in early trade on Thursday, as elevated crude oil prices and persistent foreign capital outflows weighed on investor sentiments.
At the interbank foreign exchange, the rupee opened at 77.74 against the American dollar, then lost ground to quote at 77.78, registering a fall of 10 paise from the last close.
On Wednesday, the rupee recovered from its record low to close 10 paise higher at 77.68 against the American currency.
Rupee is hovering around its lifetime low of 77.78 against the US dollar tracking the strength of the American currency in the overseas market and firm crude oil prices.
Rupee opened on a bearish note as crude oil neared USD 125 per barrel, Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors, said.
Indian stock markets' key indices, Sensex and Nifty, opened with minor cuts on Thursday amid subdued global sentiment.
The 30 stock S&P BSE Sensex was trading 186.05 points or 0.34 per cent down at 54,706.44 points at 9.38 am.
The broader Nifty 50 of the National Stock Exchange was trading 52.50 points or 0.32 per cent down at 16,303.80 points.
MRPL rose 3.50 per cent to ₹121.55, Raymond rose 30.20 per cent to ₹1,008.90, Blissgvs, Biocon, and JKIL were among the major Sensex gainers.
PhoenixLTD, Deepakni, EmamiLTD, Dwarkesh, and MotilalOFS were among the major Sensex losers.
According to the brokerage firm Sharekhan, the consumer goods sector's Q4FY2022 performance was impacted by a slowdown in consumer demand, which impacted sales volume, and a sharp increase in raw-material prices, which impacted operating profit margin (OPM), after which the brokerage selected good quality stocks like Marico, Tata Consumer Products, HUL, Nestle India, Asian Paints, and Zydus Wellness as top stock picks to buy.
Most companies announced dividends following the Q4 results of the current financial year, but it is important to note that one should look at companies that are virtually debt-free and have a continuous record of paying dividends. As dividends are a wonderful way to make passive income, buying high-quality stocks is a solid strategy. As a consequence, here are three Mahindra group companies that will pay dividends soon.
In cryptocurrencies, Bitcoin price today plunged below $31,000 level after rising above the mark in the previous session. The world's largest and most popular cryptocurrency plunged more than 3% and was trading at $30,173. The digital token is down more than 34% so far this year (YTD), and is trading far below its record high of $69,000 it had hit in November last year.
Back in February, when India was still in denial about its brewing inflation challenge, economists at Nomura Holdings Inc. summarized the choices before the monetary authority into three neat boxes. First, they said, there was a 15% probability that the central bank was right to ignore supply-side pressures. But their base case, to which they assigned a 50% likelihood, was that the Reserve Bank of India was wrong and it would have to pivot to containing price increases. They did consider a third possibility to which they gave a fairly significant 35% chance: that the RBI, although wrong about inflation, would simply go on to tolerate it.
Gold inched lower on Thursday, with prices restrained by rising Treasury yields ahead of key U.S. jobs and inflation data this week.
FUNDAMENTALS
* Spot gold was down 0.1% at $1,852.21 per ounce, as of 0052 GMT, while U.S. gold futures also eased 0.1% to $1,853.90.
* Benchmark U.S. 10-year Treasury yields firmed on Thursday, lowering the appeal of zero-yield gold.
* SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings rose 0.22% to 1,065.39 tonnes on Wednesday from 1,063.06 tonnes on Tuesday.
Asian stocks fell, U.S. bond yields rose and a soaring dollar pushed to a two-decade high against the yen on Thursday as investors worried about the outlook for more rate rises ahead of a key meeting of the European Central Bank later in the day.
But before the meeting, at which the ECB is set to bring to an end its Asset Purchase Programme and signal rate hikes to combat rising inflation, moves in the Asian session were relatively muted as many investors kept to the sidelines.
Indian economy is projected to cross $5 trillion in 2026-27 and likely to become $20 trillion by 2040, Chief Economic Advisor V Anantha Nageswaran said on Wednesday.
The top US securities regulator on Wednesday unveiled a planned overhaul of Wall Street retail stock trading rules, aiming to boost competition for handling orders by commission-free brokerages to ensure mom-and-pop investors get the best price for trades.
U.S. Securities and Exchange Commission chair Gary Gensler said he wants to require trading firms to directly compete to execute trades from retail investors.
The Wall Street watchdog plans to scrutinize growth in recent years of the payment for order flow (PFOF) practice, which is banned in Canada, the UK and Australia.
US stocks fell on Wednesday as Treasury yields rose above the psychologically important 3% level and oil prices jumped, fanning worries about inflation and the outlook for interest rates.
The S&P 500 ended down more than 1% in the broad sell-off, snapping a two-day winning streak.
Among its biggest drags, shares of Intel Corp slid 5.3% after Citi cut its estimates on the chipmaker for the second time in a week. Citi pointed to uncertainty about demand for personal computers and predicted the company could pre-announce weaker-than-expected earnings for the second quarter. Other chip shares also fell.
Brent crude oil prices rose above $123 a barrel and hit a 13-week high, while the Dow Jones transportation average fell 3.8%, significantly underperforming the other main indexes on the day. The S&P 500 energy sector was the only sector to end higher.
Tokyo stocks trended higher Thursday, with a lower yen buoying exporters despite overnight falls of US shares.
The benchmark Nikkei 225 index added 0.22 percent, or 61.85 points, at 28,296.14, while the broader Topix index rose 0.24 percent, or 4.67 points, to 1,974.65.
The yen's weakness against major currencies continued to provide solid support for shares of Tokyo exporters, analysts said, although the overall market could take a breather after recent gains.
The dollar stood at 134.41 yen, around a 20-year high, against 134.29 yen overnight in New York.
Wall Street shares fell on lingering worries about inflation while US yields trended higher.
Hong Kong stocks rose at the start of trade Thursday morning as another pick-up in tech firms helped traders brush off a drop on Wall Street.
The Hang Seng Index rose 0.49 percent, or 106.94 points, to 22,121.53.
The Shanghai Composite Index lost 0.13 percent, or 4.30 points, to 3,259.49, while the Shenzhen Composite Index on China's second exchange slipped 0.24 percent, or 5.03 points, to 2,078.39.
Stocks wavered in Asia on Thursday and bonds were again on the back foot, weighed down by the impact of high inflation.
Equities were mixed in Japan and fell in Australia and South Korea. Hong Kong may offer a modicum of relief from an ongoing rally in Chinese tech shares that’s predicated on an easing regulatory crackdown and loosening Covid curbs.
US futures fluctuated after Wall Street snapped a two-day rally on a climb in oil past $122 a barrel that stoked worries about rising costs and monetary tightening.
Benchmark Treasury yields held above 3% and New Zealand’s 10-year yield touched the highest level in seven years. The dollar-yen pair is dominating foreign-exchange markets, with the weakness in Japan’s currency putting the 2002 high of 135.15 in play.
Markets remain fixated on the risk of a downturn triggered by interest-rate hikes across much of the world to quell price pressures.
The OECD added to the gloom with a warning that the global economy will pay a “hefty price" for Russia’s war in Ukraine in the form of weaker growth, stronger inflation and potentially long-lasting damage to supply chains.
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