Bank, Realty keep indices marginally in green; IT drags amidst recession fears

Indian shares ended marginally higher on Thursday after remaining in red for most of the session. IT stocks weighed after weak quarterly earnings and a cautious outlook; however, a late rally in Bank indices lifted the market in the second half.

The Nifty 50 gained 15 points to end at 17,828, while the S&P BSE Sensex climbed almost 40 points to close at 60,431. Seven of the 13 major sectoral indices ended in the green.

The fall in IT stocks comes after TCS flagged concerns of deferred spending and near-term uncertainty in its banking, financial services and insurance (BFSI) segment.

Apart from the IT index, Media, Pharma and Energy also remained subdued and ended in the red. Realty and Bank indices, especially the PSU Bank index, ended higher with more than a per cent gain.

IndusInd Bank, HDFC Life and Eicher Motors jumped more than 2%. Infosys, Tech Mahindra and HCL Tech dropped more than 2% each. NTPC and TCS were other major laggards.

Asian stock markets declined Thursday after the Federal Reserve said its economists expect a “mild recession” this year.

Japan's Nikkei stock gauge climbed for a fifth straight session on optimism of a recovery in the domestic retail sector, while financial shares were weighed down by U.S. recession concerns.

Japan's Nikkei share average closed 0.26% higher, erasing an early slide, to cement the longest winning streak in more than a month. The broader Topix finished 0.05% higher.

China stocks fell on Thursday, dragged down by a slump in Chatbot-related companies that had surged amid speculative bets and despite data showing China's exports posted a surprise surge in March.

China's blue-chip index CSI 300 closed down 0.7%, while the Hang Seng Index edged up 0.2%.

European shares edged higher on Thursday, supported by gains in luxury stocks after LVMH's strong first-quarter sales report and hopes of a pause in the U.S. Federal Reserve's rate hike cycle following cooler-than-expected inflation data.

The UK's FTSE 100 slipped in early trading on Thursday, snapping a four-day winning streak as weakness in crude prices dragged oil stocks, while gains in homebuilders capped some losses.

The country's overall trade in fiscal year 2022-23 surged to $770 billion compared to the FY 2021-22 annual target set by the government which was $750 billion, said Commerce Secretary Sunil Barthwal said on 13 April.

According to the Commerce Ministry, in FY22, the annual trade had stood at $676 billion.

Apart from this, the Barthwal said that the country recorded an on-year jump of $94 billion in annual trade despite recessions and other issues. (Read More)

Shares of AU Small Finance Bank gained over 16 per cent during Thursday's trade after the Reserve Bank of India (RBI) approved the re-appointment of the bank's managing director (MD) and CEO, Sanjay Agarwal, for a period of three years.

Domestic brokerage Motilal Oswal said that AU Bank's stock price has been under pressure due to the lack of clarity about management continuity, as well as the uncertain macro environment.

Reiterating a 'Buy' call on the stock with a target price of ₹740, the brokerage said the RBI approval removes a key overhang and will now shift the focus to the fundamental performance of the bank. (Read More)

Central and state drug regulatory authorities have cancelled or suspended licences of over 18 pharmaceutical companies allegedly producing spurious or substandard drugs following extensive inspections led by the Drugs Controller General of India (DCGI). Most of these companies are from Uttarakhand and Himachal Pradesh, with two from Madhya Pradesh and one each from Haryana and Maharashtra.

Licences for Uttarakhand-based firms Himalaya Meditek, Mascot Health Series, and Pure and Cure Healthcare have been suspended. Shri Sai Balaji Pharmatech from Himachal Pradesh and Medipol Pharmaceutical India Pvt Ltd received show cause and stop manufacturing notices, but the order was revoked after verification of compliance. (Read More)

After strong Q4 results and a 140 per cent final dividend, Anand Rathi shares attracted bulls' attention and hit lifetime high of ₹884.55 apiece on NSE in early morning deals on Thursday. On Wednesday after the closure of the stock market, the board of directors of Anand Rathi Wealth Ltd approved a final dividend of ₹7 per equity share to its shareholders. Anand Rathi dividend was approved while announcing its Q4 results on Wednesday.

Anand Rathi informed Indian stock market exchanges that the financial company has logged a net rise of 23 per cent in its consolidated net profit in Q4FY23 on YoY basis. The company is yet to announce record date for dividend payment. Anand Rathi has already given ₹5 per share interim dividend in October 2022. so, total dividend given by Anand Rathi in FY23 is ₹12 per share. (Read More)

According to stock market observers, Avalon Technologies IPO GMP (grey market premium) today is ₹10, which is ₹5 higher from its yesterday's GMP of ₹5 per share. Market observers maintained that rise in GMP can be attributed to the continuous rise in the Indian stock market as Sensex, Nifty and Bank Nifty have logged rise on eight days in a row. However, they maintained that due to cold response by investors, grey market remained negative towards the public issue as it got less than 100 per cent subscribed in all categories except QIBs. (Read More)

Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services: Rural demand which has been sluggish for an extended period of time is showing signs of improvement. This Rabi crop has been good; this coupled with good prices has improved rural demand. The Q3 results of FMCG majors and automakers like Maruti reflect better rural demand. The coming quarters are likely to witness high government expenditure in the run up to the 2024 General Elections. Declining inflation and the pause in rate hike by the MPC are additional positives. All these bode well for rural demand.

Worldline, a leader in payment services, today announced a partnership with India-based RetailTech company SignCatch to provide one-stop cloud-based retail solutions for MSMEs to roll out the Merchant Digitisation Programme (MDP) through Worldline’s Android POS terminals.

Under the partnership, SignCatch and Worldline will enroll a base of 100,000 merchants in India, leveraging SignCatch’s super-app Bech (बेch) platform across multiple business categories like modern retail stores, supermarkets, grocery shops, bakeries, cafes, and restaurants in the first three months of launch, according to the press release.

Realty firm Hiranandani Communities will invest ₹1,000 crore to develop a new housing project in Mumbai to tap rising demand.

The company has launched a new housing project -- 'Golden Willow' -- in its mixed-use integrated township 'Hiranandani Fortune City' at Panvel.

The company plans to develop 1 million square feet of residential space in this project, comprising around 700 units. The apartment size ranges between 490 sq ft to 1,150 sq ft of carpet area.

The company will invest ₹1,000 crore to tap the growing mid and luxury home demand in Panvel realty market, Hiranandani Communities said in a statement on Thursday.

The project will be funded from construction finance and internal accruals. The ticket size ranges from ₹70 lakh to over ₹2 crore. (PTI)

The Reserve Bank of India's (RBI) proposal to discourage banks from capitalising on penal charges and additional interest loan defaults could potentially weigh on lenders' revenues going forward, Morgan Stanley said.

On Wednesday, the RBI issued a draft circular regarding charges related to loan accounts, aiming to promote transparency among regulated entities such as banks, for the disclosure of penalty interest.

The central bank observed that banks are levying higher interest rates on defaulters, over and above the applicable interest rates, on terms of which credit facilities were initially sanctioned.

"We believe there could be some negative revenue impact for banks," Morgan Stanley analysts wrote in a research note.

"That said, it is difficult to assess the impact, given limited information available in the public domain."

As a part of the draft guidelines, the RBI said that regulated entities cannot levy charges in the form of penalty interest. (Reuters)

In March 2023, Mutual Funds deployed ₹20,700 crore and alongside FIIs bought ₹13,100 crore in the Indian secondary market. The majority of Indian large-cap equity mutual funds failed to beat the benchmark, with 88 per cent of actively managed funds underperforming the S&P BSE 100 in 2022, according to a new study by S&P Dow Jones Indices showed.

According to the monthly data analysed by domestic brokerages, major mutual fund houses have bought large-cap stocks that include Infosys, Reliance Industries, HDFC, Tata Motors during the month of March 2023. (Read More)

The income tax officials have started to issue show cause notices to several multi-national companies(MNCs) asking about the valuation of their investment in the country. The authorities have even sought details like travel history and along with passport for the last four years according to a report published in Economic Times.

The move by tax officials will likely to cause some jitters at the MNCs at a time when the government is looking to woo foreign investments in the country.

Indian tax authorities have alleged that a number of big multinational companies have not passed on benefits from a tax cut to customers, a senior government official told Reuters in 2019. (Read More)

India's passenger vehicles sales grew 26.7% in the fiscal year 2022-23, as chip shortages eased and demand for sport utility vehicles (SUVs) surged, an auto industry body said on Thursday.

Wholesale passenger vehicle volumes for the year rose to 3.9 million units in the year ended March 31, from 3.1 million units a year ago, the Society of Indian Automobile Manufacturers (SIAM), which records sales to dealers, said.

Despite inflation trending higher through the year, a mix of improved chip supply, higher incomes and pent-up demand, especially for SUVs supported sales at Indian automakers.

Buying ahead of implementation of new fuel emission norms, and strong demand during the festival season also drove sales towards the end of the year.

Two-wheeler sales, an indicator of the financial health of India's lower- to middle-income households, also rose 16.9%. (Reuters)

Bankrupt crypto exchange FTX has recovered over $7.3 billion in cash and liquid crypto assets, an increase of more than $800 million since January, the company's attorney said on Wednesday at a U.S. bankruptcy court hearing in Delaware.

FTX attorney Andy Dietderich said the company is starting to think about its future after months of effort devoted to collecting resources and figuring out what went wrong under the leadership of indicted ex-founder Sam Bankman-Fried. Bankman-Fried has pleaded not guilty.

"The situation has stabilized, and the dumpster fire is out," Dietderich said. (Read More)

Ranjeet Mahtani, Partner, Dhruva Advisors: “Customs Notification No. 57/2017, as amended, provides for exemption to certain telecom equipment under HSN 8517 62 and 8517 69.

Technology advances rapidly while the customs exemption notification is not a technical document. There has been ambiguity around the scope of this exemption notification. Telecom products were imported at lower duty, by claiming the exemption or by classifying it within the “others” category and which has potentially resulted in revenue leakage of more than INR 500 crores.

Some redundant CTH (codes) were deleted. Incrementally, to address the ambiguity and possible misuse of the exemption notification, it was felt that all stakeholders should better understand and thereafter effectively identify the items/equipment that are covered by the exemption. The Board has proactively issued a Circular in March 2023, which: (a) supplies some clarification to assist with identification of eligible items/equipment and (b) requires an identifier code to be declared in the bill of entry that have been filed from April 1, 2023. These measures are directed to ensure that the exemption benefit is availed in respect eligible telecom gear.

It is noteworthy, that Customs duty rates have not been altered, rather, and to obviate disputes on this topic, measures are provided to have clarity in the process of identification of the telecom equipment/items, to enable Government to track imports of these goods, to plug any revenue leakages and to aid eligible telecom equipment to enjoy the given exemption. A consequence is that to the extent that the exemption notification was misused or improperly used, landed cost of telecom gear will increase.

PNB Housing Finance rights issue has opened today and it will remain open till 27th April 2023. The housing finance company board has announced a rights issue at ₹275 apiece. Comparing PNB Housing Finance's right issue price with PNB Housing Finance's share price today of around ₹415 per share, the issue is available at a premium of near 34 per cent. However, PNB Housing Finance share price has been nosediving since the PNB Housing Finance rights issue announcement. The stock has nosedived from around ₹500 apiece levels to ₹415 levels in near one fortnight. Even today, PNB Housing Finance share price opened downside and went on to dip over 5 per cent within a few minutes of the stock market's opening bell today. (Read More)

Japanese technology investor SoftBank Group Corp has moved to sell almost all of its remaining shares in Alibaba Group Holding Ltd, the Financial Times reported, sending the Chinese e-commerce major's stock tumbling.

The sale would come as valuations of China's big tech firms have started recovering this year after an end to two years of heightened regulatory scrutiny, providing a window for long-time investors such as SoftBank to reduce exposure to an economy battered by strict pandemic policies and Sino-U.S. tension.

SoftBank's share price was little changed on Thursday, tracking the broader market. Alibaba, one of the most valuable assets in SoftBank's portfolio, tumbled as much as 5.2% in Hong Kong after the report before paring the loss to 2.8%.

That followed a 5.2% Wednesday plunge for Tencent Holdings Ltd after the social media giant's top shareholder, the Netherlands' Prosus NV, said it may sell more of its shares, underscoring selling pressure on Chinese tech names. (Reuters)

Lenders of debt-ridden Future Retail Ltd (FRL) has sought an extension of 90 days for concluding the Corporate Insolvency Resolution Process (CIRP) of the company.

The resolution professional of FRL has filed an application before the Mumbai bench of the National Company Law Tribunal (NCLT) "seeking exclusion of a period of 90 days from CIRP of FRL, and consequent extension from April 16, 2023, to July 15, 2023, for concluding the CIRP of FRL."

The CIRP was initiated against FRL by NCLT on July 20, 2022, following loan default. (Read More)

Raghvendra Nath, MD, Ladderup Wealth Management Pvt. Ltd: CPI inflation eases to 5.66% in March 2023 from 6.44% in February 2023 and 6.95% in March 2022. It is now below 6% the upper end of the target range set by RBI. The primary reason for the ease in inflation was higher base of last year. Rural inflation eased to 5.51% from 6.72% in Feb, whereas Urban inflation also eased but at a slower pace to 5.89% in March. Consumer Food price inflation eased to 4.79% from 5.95% in Feb and 7.68% in March 2022. Inflation is expected to stay within RBI’s band as Rabi crop production has been good enough despite unusual rains and extreme heatwaves. This data should aid RBI’s decision to pause the rate hike.

After better-than-expected US CPI data and FOMC minutes flagged off inflation jitters due to the bank crisis in the US, gold price today witnessed buying interest in early morning deals. Gold futures contract for June 2023 on Multi Commodity Exchange (MCX) surged ₹123 per 10 gm and quoted ₹60,751 levels in the early morning session. In the international market, the gold price is up 0.12 per cent at $2,017 per ounce.

Silver rate today hit ₹76,000 per kg levels on MCX and logged a 0.37 per cent rise within a few minutes of the commodity market opening today. In the international market, silver price today is at $25.47 per ounce levels. (Read More)

Dr V K Vijayakumar, chief investment strategist at Geojit Financial Services: News on the inflation front - both from the US and India - are positive for markets. The US consumer inflation number has come lower than expected at 0.1% MoM and 5% YoY. CPI inflation print in India declining to 5.66% is an endorsement of the MPC’s pause decision. The core inflation also has declined to 5.8% indicating that the RBI’s inflation target of 5.2% for FY24 is achievable, assisted by the base effect. So, the MPC continuing with the present rates in the next policy meeting is a clear possibility. This is positive for equity markets. The current rally is driven by sustained FII buying, which is sort of forced buying triggered by short-covering. It is important to understand the fact that the last nine days of continuous FII buying has led to eight days of sustained rally in the market. Mediocre Q4 results and uninspiring commentary from TCS will keep the IT stocks soft. Financials will continue to be resilient. Watch out for the pharma stocks which have emerged strong in recent days.

The Securities and Exchange Board of India (SEBI) levied penalties amounting to ₹25 lakh on five entities for engaging in fraudulent transactions in the illiquid stock options segment on the Bombay Stock Exchange (BSE).

As per media reports, in five separate orders, the watchdog levied a fine of ₹5 lakh each on Natraj Dealtrade, Queen Tie-Up Pvt Ltd, Octagon Merchants, Noble Tradelink and Nirmal Kumar Chopra HUF.

Sebi conducted an investigation into the trading activities of specific entities involved in the illiquid stock options segment of BSE during the period from April 2014 to September 2015. (Read More)

Union minister Ashwini Vaishnaw said the country is on its way to becoming a global leader in the mobile devices segment with the doubling of smartphone exports from India to over USD 11 billion.

"With the doubling of exports of smartphones to more than USD 11 billion, India is well on its way to become a leader in the mobile device market of the world and play a major role in India's electronic exports. This is a major win for PM Modiji's Make in India programme," Vaishnaw said in a statement on Wednesday.

According to the industry body India Cellular and Electronics Association (ICEA), mobile phone exports from India reached close to USD 11.12 billion with iPhone maker Apple accounting for around half of the total exports. Mobile phones exported from India have doubled to surpass ₹90,000 crore, which is about USD 11.12 billion in the financial year (FY) 2022-23 from ₹45,000 crore in 2021-22. (ANI)

India records a sharp hike in daily Covid-19 cases at 10,158 compared to the previous day. According to the health ministry data, the active infections stand at 44,998. On Wednesday, India recorded 7,830 new coronavirus cases on Wednesday, marking a sharp jump from Tuesday when 5,675 cases were reported, according to data shared by the Union Health Ministry.

The country is witnessing a sharp rise in the cases of Covid-19. The All India Institute of Medical Sciences (AIIMS)-Delhi has issued an advisory for its staff to follow Covid-19 appropriate behaviour after a few of them were tested positive for the infection. (Read More)

Apple Inc is in talks with suppliers to make MacBooks in Thailand as the company continues to expand its manufacturing footprint outside of China, Nikkei reported on Thursday. (Reuters)

STOCK IN FOCUS

Crompton (CMP 297): Considering healthy growth led by strong brand equity, product innovation, ongoing Go-To-Market (GTM) strategy, better margin profile in the medium-term and synergies of Butterfly, we have our BUY rating on the stock with a Target price of Rs430.

Intraday Picks

INDUSINDBK (PREVIOUS CLOSE: RS1,075) BUY

For today’s trade, long position can be initiated in the range of Rs1,068-1,062 for the target of Rs1,093 with a strict stop loss of Rs1,054.

ULTRACEMCO (PREVIOUS CLOSE: RS7,683) SELL

For today’s trade, short position can be initiated in the range of Rs7,710-7,745 for the target of Rs7,575 with a strict stop loss of Rs7,805.

UPL (PREVIOUS CLOSE: RS740) SELL

For today’s trade, short position can be initiated in the range of Rs741-744 for the target of Rs727 with a strict stop loss of Rs752.

Manish Chowdhury, Head of Research at Stoxbox: Tata Consultancy Services Ltd. (TCS) Q4FY23 Result First Cut - Challenging operating environment weighs on results

In Q4FY23, TCS recorded a double-digit revenue growth led by the Retail and CPG industries along with Life Sciences and Healthcare but the company failed to beat market expectations. We believe that the challenging environment in North America, one of the biggest markets for TCS, is likely to weigh on the performance in the next few quarters as the companies delay their tech spends and a general slowdown in their decision making. The company also looks uncertain about the demand environment, evident from slower net additions to the workforce. Despite the major macro headwinds present affecting discretionary consumption, TCS remains optimistic about the future on the back of its strong order book.

The government has set in motion a plan to transform Indian airports into aviation hubs--beginning with the Delhi airport--to ensure seamless connectivity and minimize connection time between flights, Union civil aviation minister Jyotiraditya Scindia said.

“We are working with stakeholders to look at how we can prepare Delhi airport to become a hub. A consultant will be hired to look at international comparables to see how we can go about doing that, so that is a work in progress," Scindia said. “We need a concentration of airlines, domestic to international connectivity with that airline, and minimum connect time between those airlines. We need to ensure that the vicissitudes and the volatility in terms of arrival and departures between flights are flattened out." (Read More)

Infosys will be among the stocks in focus as it will be declaring its March quarter earnings today. (Read More)

Reserve Bank of India has approved reappointment of Sanjay Agarwal as managing director and CEO of AU Small Finance Bank for a period of three years.

The re-appointment is valid with effect from April 19 till April 18, 2026, AU Small Finance Bank said in a statement.

Besides, it said, the regulator has also cleared the reappointment of Uttam Tibrewal as the whole-time director for a period of three years.

The shareholders had already approved the said re-appointment on March 9, 2022, it added. (PTI)

Infosys, an IT company, is slated to announce its fourth-quarter earnings for FY23 today, which may be impacted by seasonal weakness and macroeconomic uncertainties.

Meanwhile, TCS missed Street's estimates for the fourth quarter of FY23. The IT giant garnered a consolidated PAT of ₹11,392 crore in Q4FY23, registering a growth of 14.8% YoY.

However, Infosys is expected to be the first company to provide guidance for the fiscal year 2024, which will set the tone for the overall outlook for the current fiscal year. Ahead of the results, here are five key things to watch out for: (Read More)

Four companies, including Larsen & Toubro, have submitted bids for the design and construction of civil and building works of a 135-km-long alignment between Shilphata and Zaroli under package C-3 of the Mumbai-Ahmedabad high-speed rail line, the firm overseeing the bullet train project said on Wednesday.

In a statement, National High-Speed Railway Corporation Ltd (NHSRCL) said it has received four bids from M/s Larsen & Toubro Ltd, NCC-J Kumar (JV), M/s Afcons -KPTL Consortium and M/s Dineshchandra-DMRC JV for package C-3 that also includes Thane, Virar and Boisar HSR (high-speed rail) stations. (Read More)

Reliance Industries Ltd (RIL) has started the process to set up an infrastructure investment trust (InvIT), under which the group can monetise the backend warehousing and logistics assets of its retail business, said industry sources.

Reliance Retail, the company which operates the retail business of the billionaire Mukesh Ambani-led Reliance Industries, has already registered a trust with the market regulator Securities and Exchange Board of India (Sebi) in February this year, they added.

The trust will store the warehouse assets that the group intends to monetise.

According to a media report, the value of the assets that could be transferred to the InvIT is USD 2.4-3 billion ( ₹19,000-25,000 crore). More assets are likely to get added as they become operational, it added.

An e-mail sent to Reliance Retail could not elicit any reply. (PTI)

Vaishali Parekh has recommended three intraday stocks for today, here we list out key details in regard to those day trading stocks:

1] United Spirits or McDowell: Buy at ₹766, target ₹788, stop loss ₹755;

2] GNFC: Buy at ₹546, target ₹567, stop loss ₹538; and

3] Balkrishna Industries: Buy at ₹2049, target ₹2140, stop loss ₹2015. (Read More)

Tata Consultancy Services Ltd missed analysts’ earnings estimates as clients, especially banks, turned abruptly cautious about spending amid a crisis in the US and Europe.

Net profit rose 15% to ₹11,392 crore in the March quarter, TCS said in a statement on Wednesday. Profit rose 5% from the preceding three months. Analysts had estimated a profit of ₹11,530 crore on average, according to a Bloomberg poll. Sales rose 17% to ₹59,160 crore.

As people return to pre-pandemic activities and offices, the spike in demand that Indian IT companies saw during the peak of the covid-19 pandemic from digitization spending by clients is tapering. (Read More)

India’s annual retail inflation for March eased below the central bank’s upper tolerance level for the first time this year, and eased to 5.66% from 6.44% in February, data from National Statistical Office (NSO) showed on Wednesday.

The inflation numbers have seen a decline from 6.44% in February and 6.95% in the year-ago period.

According to the National Statistical Office, the food inflation, which accounts for nearly half of the overall consumer price basket, moderated to 4.79% as vegetable prices eased. It was 5.95% in February and 7.68% in the year-ago period. (Read More)

Stocks dipped to close an up-and-down Wednesday on Wall Street following the latest update on inflation and the latest warning of a possible recession.

The S&P 500 fell 16.99, or 0.4%, to 4,091.95 after drifting between small gains and losses through the day. The Dow Jones Industrial Average slipped 38.29, or 0.1%, to 33,646.50, and the Nasdaq composite lost 102.54, or 0.9%, to 11,929.34.

The main focus for more than a year on Wall Street has been high inflation and how much painful medicine the Federal Reserve will have to dole out to contain it. Wednesday's update on inflation was a mixed one, showing prices at the consumer level were 5% higher last month than a year earlier.

That’s still well above the Federal Reserve’s comfort level, and some underlying trends within the data were also concerning. That weighed on financial markets. But on the upside for investors, the overall inflation number was still better than the 5.2% that economists expected. It also marked a continued slowdown from inflation’s peak last summer.

Altogether, the data sent stocks bouncing, though the swings weren't nearly as severe as they’ve been over the past year. Roughly 65% of the stocks within the S&P 500 fell.

Traders are still largely betting the Fed will raise short-term interest rates by another quarter of a percentage point at its next meeting, according to data from CME Group. They shaded some bets toward the possibility that the Fed will merely hold rates steady in May, something it has not done for more than a year. (API)