Back
PremiumIndian indices ended higher for the fourth day in a row on Wednesday with Sensex reclaiming the 61,000 level, and Nifty settling above 18,200 mark. Focus is on the three IT majors--TCS, Infosys and Wipro-- which will announce Q3 results today. Asian and European equities rallied following a rebound in the US after Federal Reserve Chair Jerome Powell reassured investors the central bank will tackle inflation to extend the economic expansion.
Benchmark share indices zoomed above their psychological levels on Wednesday buoyed by expectations of a good quarterly earnings season and tracking global markets. Rising for the fourth day in a row, the BSE Sensex jumped 533 points to close at 61,150. Nifty settled at 18,212.35, up 0.87%. Midcap and smallcap stocks also rallied in line with the benchmarks. M&M, Bharti Airtel topped the charts, while TCS and Titan were the biggest laggards. Among sectors, pharma was the sole loser, while auto, metal and realty were the best gainers.
The company confirms sale of Ssangyong to a consortium led by South Korean electric carmaker Edison Motors.
IT Services sector is expected to report strong growth in Q3FY22 primarily on account of the large deal wins and a ramp-up of the deals won in the previous quarter despite a seasonally low quarter. IT spending from North America and Europe has gained momentum and demand for the digital transformation has increased exponentially. Furthermore, improved macro-economic opportunities across the globe are expected to provide further growth impetus to the sector moving forward.
We expect IT services to report revenue growth in the range of 3% to -7% QoQ in US$ terms as well as in rupee terms. Margins for the majority of companies are likely to be slightly impacted to the tune of 20bps – 260bps, largely due to the cross currency impact.
Key Monitorables: Management commentary on critical issues such as 1) Ramp-up of the new deal-wins, 2) Suspension of H1B visas in North America, 3) Rising subcontractor costs, and 4) Pricing pressure on realizations.
Sector and companies’ Q3FY22 expectations: We expect Large Cap IT companies to report strong recovery with 3%-5% revenue growth on a QoQ basis. The Mid Cap IT companies are likely to surpass the growth of Large Cap companies’ performance depending on the nature of the business.
The key are as follows:
Our top Result Buys: Wipro, HCL Tech, Coforge Ltd, Persistent Systems Mindtree Ltd, Coforge Ltd.
Our top Result Sells: Cyient, SIS.
Quiklyz, the vehicle leasing and subscription business vertical of Mahindra & Mahindra Financial Services Limited, today announced that it will offer a wide range of electric vehicles (EVs) for leasing and subscription to potential customers.
Asian and European equities rallied Wednesday, tracking a strong performance on Wall Street as Federal Reserve chief Jerome Powell said he was determined to rein in runaway inflation but pledged to maintain the healthy recovery in the world's top economy.
Nikkei 225 closed 1.9% higher; Hang Seng ended down 2.8%; Shanghai - Composite ended 0.8% higher; London's FTSE 100 is trading with 0.5% gains.
Bank Nifty has seen a decrease in Open Interest of -3.52% with increase in the price of 7.31% indicating Short Covering.
Nifty has seen an increase in Open Interest of 10% with an increase in the price of 4.01% indicating Long Build Up.
Option data indicates a probable trading range of Bank Nifty for the day between 37,200 to 38,200 & that for NIfty at 17,700 to 18,100.
Bank NIFTY Strategy: Call Spread
View: Moderately Bullish.
Rationale: - Traders could initiate this spread strategy to make modest returns with limited risk and reward. The spread suggested consists of buying one lot of 37,800 strike CALL option and simultaneously selling one lot of 38,300 strike CALL Option.
Aditya Birla Fashion and Retail has collaborated with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH to bolster sustainable practices in the apparel and textile industry.
The collaboration is being implemented by ABFRL and GIZ on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ).
ABFRL operates the Louis Philippe, Van Heusen, Allen Solly and Peter England brands in India.
The company that will announce its December quarter earnings today is expected to guide for a 2-4% sequential growth in constant currency for Q4 FY22. Wipro is expected to report a dollar revenue growth of 3.3% in constant currency
Toll road projects are expected to benefit from the high wholesale price index (WPI)-based inflation as it will lead to an increase in toll rates and thereby collections, ratings agency Icra has said.
Analysts expect TCS to report a dollar revenue growth of 3.5% sequentially in constant currency. Emkay Global expects Infosys to revise its FY22 revenue growth guidance to 17.5-18.0% in constant currency from 16.5-17.5% currently.
"One Midtown" is the latest offering by DLF in DLF Midtown, one midtown is of the luxurious project offering by DLF limited. Company has archive pre-sales of ₹1500 crores for towers in the first phase of the newly launched luxury residential project. This project having four towers with 39 floors each, with price staring from ₹3 crores.
We continue to see good traction in residential real-estate sector, earlier we have seen good demand during festival season in Q3FY22, along with decade low home interest rates. We expect residential real-estate continue to do well in coming quarters.
Finnish telecom gear maker Nokia and Tech Mahindra have joined hands to deploy 5G-based solutions for business organisations, according to a joint statement by the two companies.
Under the collaboration, Tech Mahindra will leverage Nokia's private wireless DAC (digital automation cloud) solution for customers across industries and facilitate in automating 5G private wireless network management on a cloud computing system and enabling them deploy internet of things like technology. (PTI)
In a regulatory filing, the company said it has raised ₹200 crore through the allotment of 2,000 NCDs of the face value of ₹10,00,000 each on private placement basis.
The NCDs will be listed on the wholesale debt market segment of BSE Limited.
The government will neither take a seat on the Vodafone Idea Board nor will run or manage the company, Vodafone Idea’s MD and CEO Ravinder Takkar clarified, a day after the company opted for converting interest on deferment of adjusted gross revenue (AGR) and spectrum instalments dues of about ₹16000 crore to equity, making government the single largest shareholder in the carrier.
Easy Trip Planners board on Wednesday recommended issuing 1 bonus share for every 1 held i.e., in 1:1 ratio. The company said its bonus shares will be issued out of free reserves created out of profits of the company available as at March 31, 2021.
Delhi Health Minister Satyendra Jain on Wednesday said coronavirus cases have stabilised in the national capital and there is a possibility of the infections declining soon.
While sharing that the city is likely to see around 25,000 cases on Wednesday, he underlined that positivity rate cannot determine whether the cases have peaked or not. (PTI)
Equity benchmarks extended gains over third consecutive session amid mixed global cues. Nifty shut shop Tuesday’s session at 18055 up 52 points or 0.3%. The market breadth turned flat with A/D ratio of 1:1. Sectorally, IT, financial, realty remained in limelight while metal, FMCG, auto took a breather.
Technical Outlook
· After initial blip, Nifty regained upward momentum and sustained above the psychological mark of 18000 during the session. As a result, daily price action formed a bull candle carrying higher high-low, indicating continuance of positive bias
· The follow through strength above the 18000 mark underpinned by multi sector participation signifies inherent strength which makes us confident that index would resolve above 18200 levels and gradually retest 18600 in the run up to budget 2022. Hence, any dip from here on should not be construed as negative instead capitalised it as fresh entry opportunity from medium term perspective. Our revised target of 18600 is based on following observations:
Ø lifetime high is placed at 18600
Ø since June 2020, on multiple occasions elevated buying demand emerged from five months’ average that paved the way to challenge life highs in subsequent months. In Current scenario as well index rebounded after finding support from five months’ average. Thereby offering fresh entry opportunity to ride move towards 18600
Today's calls
Intraday – RIL , Adani Ports
Positional – RCF
The year 2021 was extremely rewarding for investors. The liquidity unleashed by central banks across the world in 2020 continued to fuel the rally in Indian share markets.
The Sensex crossed the 60,000 mark while the Nifty crossed the 18,000 milestone. The dizzying upward trajectory of the indices added a whopping ₹72 tn to investors wealth.
Sector-wise, the power and real-estate sectors delivered maximum gains. This was due to a strong recovery. The FMCG sector delivered the smallest gains, largely reflecting weak consumer demand in the economy.
How did individual stocks fare though? Let’s find out…
Here are the top 5 gainers of 2021. (Read here)
The board has approved a plan to publicly list its subsidiary Fedbank Financial Services. FedFina is the retail focused non-banking finance company of the Kerala-based lender. The IPO will comprise a fresh issue and an offer for sale.
Gold prices struggled near two-month lows in Indian markets. On MCX, gold futures were down 0.11% to ₹47,637 per 10 gram while silver edged 0.15% lower to ₹61,018 per kg. In global markets, gold rates were flat ahead of US inflation data due later today for rate clues. Spot gold today was little changed at $1,819.51 per ounce.
The realty major said it has clocked sales of about ₹1500 crore in the first phase of its newly launched luxury residential project, ‘ONE Midtown’, in west Delhi. DLF Home Developers Ltd, a subsidiary of DLF last week said that along with Singapore’s GIC Pte Ltd, it will develop over 900 apartments at the project in Delhi’s Moti Nagar locality
The markets have sustained well above the 18000 level. We should be looking forward to 18400-18500 as the next target. Since the market has a good support at 17700, any intraday correction should be used to accumulate long positions on the Nifty.
The company opted for converting the interest from adjusted gross revenue dues amounting to ₹850 crore to equity, following which the government will hold 9.5% in the company.
India logged 1,94,720 new coronavirus infections taking the total tally of Covid-19 cases to 36,070, 510 which includes 4,868 cases of the Omicron variant, according to the Union Health Ministry data updated on Wednesday.
The active cases rose to 9,55,319, the highest in 208 days, while the death toll climbed to 4,84,655 with 442 fresh fatalities, the data updated at 8 am stated.
Of the total 4,868 cases of the Omicron variant, 1,805 people have recovered or migrated so far.
The company reported a consolidated net profit of ₹703.8 million for the quarter ended 31 December, up from just ₹12.8 million clocked in the same period a year ago.
The market capitalisation of the BSE-listed companies reached a fresh lifetime high of over ₹275.20 lakh crore on Tuesday, driven by a continuous rally in the equity market.
The 30-share BSE benchmark continued its winning run for the third consecutive session on Tuesday. (PTI)
India’s health insurers are surveying a surge in coronavirus infections and a rush of hospitalization claims before deciding on raising premium rates.
Early last year, a deadly second wave of the pandemic led to a sharp rise in claims, putting these companies under pressure. To help health insurers handle worsening loss ratios due to rising covid claims in 2020, the Insurance Regulatory and Development Authority of India, or Irdai, had allowed a 5% revision in premium rates. (Full report)
Gold prices were flat on Wednesday, as traders focused on U.S. inflation data for rate clues after less hawkish comments from the Federal Reserve chief fuelled a bullion rally last session.
Spot gold was little changed at $1,819.51 per ounce, while U.S. gold futures were up 0.1% at $1,819.80.
The Union budget for the year starting 1 April is likely to set a disinvestment target that is modestly higher than this year’s target of ₹1.75 trillion, two people aware of the development said. However, much depends on the public listing of Life Insurance Corp. of India (LIC), which is expected to fetch around ₹1 trillion.
The government plans to list India’s largest insurer before the end of March in the country’s biggest initial public offering (IPO) so far. However, several regulatory changes are required before taking it public.
“The target could be a little bit higher than this year. LIC is the biggest factor here; if it happens this year, then the target (for FY23) could change," one of the two people cited above said on condition of anonymity.
Besides the three IT majors, stocks of DLF, Federal Bank, Ultratech Cement will be in focus on Wednesday.
Download the App to get 14 days of unlimited access to Mint Premium absolutely free!
