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PremiumFed presidents Thomas Barkin, Esther George, Raphael Bostic, Patrick Harker speak at various events on Tuesday. Investors will also eye U.S. retail sales data, due later today, which will likely show an acceleration in October as consumer demand remained resilient.
Indian stock markets ended the day lower on Tuesday, pulled down by banks and index heavyweight Reliance Industries.
The Sensex fell 396.34 points or 0.65% at end at 60,322.37, while the Nifty was down 110.30 points at 17,999.20.
Shree Cements, Reliance Industries, Hindalco Industries, Tata Consumer Products, SBI were were the most hit on Nifty, while Maruti Suzuki, M&M, Tata Motors, Hero MotoCorp and Tech Mahindra were among the top gainers.
Nifty Auto index rose the most, up 2.5%, followed by IT index which climbed 0.5%. All other sectoral indices ended lower, with PSU Bank worst hit, down 2.1%.
Broader markets were also largely lower, with BSE MidCap Index down 0.2%, while SmallCap ended marginally higher.
An oil market rally may ease off as prices that hit a three-year high last month help push up global supply, particularly in the United States, the International Energy Agency (IEA) said on Tuesday.
"The world oil market remains tight by all measures, but a reprieve from the price rally could be on the horizon ... due to rising oil supplies," the Paris-based agency said in its monthly oil report.
"Current prices provide a strong incentive to boost (U.S.) activity even as operators stick to capital discipline pledges.
India said it’s made a “concerted push" with OPEC+ on oil production, but advised major consumers against selling their strategic reserves.
The country’s petroleum minister, Hardeep Singh Puri, spoke Tuesday with Bloomberg at the Adipec conference in Abu Dhabi. The comments come as U.S. politicians put pressure on President Joe Biden to bring down gasoline prices, possibly by banning crude exports and releasing oil from the government’s Strategic Petroleum Reserve.
The world’s biggest oil and gas companies and many OPEC+ energy ministers are in Abu Dhabi this week for Adipec. It’s one of the first major in-person events for the industry since the start of the coronavirus pandemic.
Global wealth tripled over the last two decades, with China leading the way and overtaking the US for the top spot worldwide. That’s one of the takeaways from a new report by the research arm of consultants McKinsey & Co. that examines the national balance sheets of ten countries representing more than 60% of world income.
“We are now wealthier than we have ever been," Jan Mischke, a partner at the McKinsey Global Institute in Zurich, said in an interview.
Net worth worldwide rose to $514 trillion in 2020, from $156 trillion in 2000, according to the study. China accounted for almost one-third of the increase. Its wealth skyrocketed to $120 trillion from a mere $7 trillion in 2000, the year before it joined the World Trade Organization, speeding its economic ascent. (Read here)
Thrasio-style house of brands player, Mensa Brands, on Tuesday said it has raised $135 million as a part of its latest Series B funding round led by Falcon Edge Capital’s growth stage platform, Alpha Wave Ventures, at a valuation of around $1.2 billion.
Other existing investors including Accel Partners, Norwest Venture Partners and Tiger Global Management along with new investor Prosus Ventures formerly Naspers Ventures also participated in the round, making Mensa the fastest startup to reach unicorn status in just seven months of inception.
A unicorn is a privately held startup with a valuation of $1 billion.
Europe's main stock markets climbed at the open on Tuesday following a mixed showing in Asia.
London's benchmark FTSE 100 index grew 0.1% to 7,357.79 points.
In the eurozone, Frankfurt's DAX index won 0.2% to 16,179.29 points and the Paris CAC 40 gained 0.4% to 7,153.89.
Bitcoin, the world's biggest and best-known cryptocurrency, fell more than 4% on Tuesday as it extended a decline through a week that also included an upgrade to its blockchain.
Bitcoin fell to $60,350 at its lowest for the day, taking losses from a record high of $69,000 struck on Nov. 10 to more than 11%.
Ether, the second-biggest cryptocurrency by market value, was down 4.5% at $4,355.4.
Realty major Macrotech Developers Ltd, earlier known as Lodha, has launched a Qualified Institutional Placement (QIP) issue to raise ₹4,000 crore. Lodha will be issuing around 3.4 crore new shares through this issue. The floor price for the issue as per SEBI regulations is ₹1,184.70 per share.
As per the release, the developer may offer an additional 5% discount on the floor price. The management said that it plans to utilize the proceeds for multiple purposes, including repaying debt, land acquisitions and related capital expenditure purposes.
Reacting to this, shares of the company rose 10% intraday trade on the NSE, rising to a new 52-week high of Rs1443.
The company had earlier hiked prices by 8-9%, effective 12 November, with cumulative price hike for this year so far at 15-16%.
We retain our HOLD rating on the stock
Target Price and Valuation: We value ONGC at ₹180 apiece
Key triggers for future price performance:
Sustained higher crude oil prices and gas realisations can result in better profitability. If prices sustain at higher level, there is further upside potential to earnings and our target price
Ramp-up in oil & gas production from newer fields
Value unlocking from subsidiaries and other investments & lower holding
company discount on investments
High dividend yield and payout ratio
The Reserve Bank of India’s low interest rate regime will continue to support demand in the economy, even as authorities scale back pandemic support, according to CLSA India Economist Indranil Sen Gupta.
“Of course, RBI will tighten, but rates are so low that lending rates will take some time to react to that," Sen Gupta, who worked with the RBI as a staff economist in the past, said in an interview. “That will be a major driver of consumption demand going into next year."
In a survey by CLSA, 70% of respondents said they look at lending rates as the “key reason" for availing loans. Sen Gupta sees RBI retaining an accommodative stance for now, while continuing to withdraw surplus liquidity. The government can’t incur a fiscal expenditure like last year, but the recent cut in fuel taxes and a good harvest will also help economic recovery, he said.
Vedanta-led Cairn Oil & Gas, has entered a partnership with Halliburton Company to pursue the target of increasing its recoverable reserve from offshore assets to 300 mmboe – a 10-fold increase from the present cumulative of 30 mmboe.
This announcement follows Cairn’s commitment of doubling its capacity, contributing 50% to India’s domestic crude production and assisting the country in its goal of achieving energy autonomy.
Bajaj Electricals Ltd's performance has improved in most segments. The momentum in consumer products remains strong, growing 31% year-on-year during Q2.
Appliances, fan, lighting, and Morphy Richards range, all impressed with 13-41% year-on-year growth. While appliances and Morphy Richards range led the growth momentum, lighting has shown a strong rebound and fans business that had lost sales in the peak summer season also made a comeback.
"Consumer products segment of Bajaj Electricals continued its strong growth momentum led by the continuous launch of new innovative SKUs (53 in Q2), distribution expansion of Morphy Richards, and strong double-digit growth across appliances, fans and lighting," said analysts at ICICI Securities Ltd.
Digital startups are creating job opportunities that have a multiplier effect and the digital supercycle has potential to create millions of jobs and spur consumption, something that India has not yet fully reckoned with, said former ICICI Bank chairman KV Kamath.
Kamath spoke at India Financials e-Conference 2021 hosted by ICICI Securities, the company said in a statement. The conference, it said, is focused on assessing the relevant and differentiated trends for Indian financial services that are reshaping and transforming the behaviour of consumers and businesses.
Incorporated in 2010, Go Fashion (India) Ltd is one of the largest women's bottom-wear brands in India. Go Fashion serves its customers primarily through a extensive network of 459 exclusive brand outlets, including 12 kiosks operated on a “company owned and company operated" model, and 11 franchise stores that are spread across 23 states and union territories in India, as of September.
Outlook & Valuation: In terms of valuations, the post-issue FY20 EV/EBITDA works out -30.2x to (at the upper end of the issue price band), which is almost in similar range compared to its peers TCNS Clothing Co. (FY20 EV/EBITDA -29.3x).
Go Fashion India has a better track record of revenue growth, higher operating margin & high Return on equity compared to TCNS Clothing Co. Considering all the positive factors, we believe this valuation is at reasonable levels. Thus, we recommend a subscribe rating on the issue.
Go Fashion IPO will open on 17 November.
For this session, 18,200 would be seen as immediate hurdle, while on the lower side 18,000 followed by 17,850 are to be considered as key supports. Any violation of these levels would lead to some weakness in the benchmark index.
Joe Biden and Xi Jinping spoke of the need for cooperation in their first face-to-face virtual summit, with both sides aiming to stabilise U.S.-China relationship while downplaying expectations for major breakthroughs.
The video conference got under way about 8 p.m. on Monday night in Washington, hours after Biden signed bipartisan infrastructure legislation into law, and ended after more than three hours. The two leaders “conducted full and in-depth communication and exchange on strategic, comprehensive and fundamental issues," China’s state-run CCTV said.
The Biden administration has yet to brief reporters.
“I look forward to a candid and forthright discussion," Biden told Xi at the start of the summit, adding that they had a responsibility is to ensure that competition between the countries doesn’t veer into conflict. The U.S. leader said he planned to discuss human rights, economics and “ensuring a free and open Indo-Pacific."
Investors were watching to see if the summit helps defuse tensions that have built up between the world’s two biggest economies over a wide range of issues, including tariffs, sanctions and human rights. As the summit got underway, the onshore yuan rose as much as 0.3% to approach the strongest level since 2018. The currency fluctuated within a tight range over the past month.
Steady performance
Overall, a strong result on revenue and billings front. The pickup in hiring activity and the recovery in the real estate market would support revenue growth. It is best placed to benefit from the growing digitalization of the Indian economy. Positive operating leverage should support margin in the medium term. It is expected to continue to make tech-related investments to drive revenue growth and maintain its leadership position across segments. YES Securities maintains a BUY rating on the stock with a revised target price of ₹ ₹7,350/share.
Acrysil Ltd registered a strong quarter wherein the company reported 58% YoY sales growth on account of strong demand for Quartz sinks in overseas markets owing to a sharp uptick in home furnishing trend backed by a shift in demand from stainless steel sinks to Quartz sinks. This trend will continue and the share of Quartz sinks to total global kitchen sinks is likely to expand from 10% to 20% over the next five years. With Acrysil being one of the only 4 global manufacturers of Quartz sinks via German technology, Acrysil is likely to report volume growth of 33% CAGR over FY21-24.
Some return of stability for the company
Overall, it delivered improved operating performance in terms of 4G addition and ARPU growth. 2G to 4G migration would drive ARPU increase but a generalized tariff hike is required to improve the health of the company. It needs capital infusion for augmenting the capital expenditure in its network infrastructure. The net debt at ₹1.94 trillion remains high (Net debt/Ebitda (FY21) =11x). REDUCE stock with a revised target price of ₹9/share.
Equity benchmarks started the truncated week on a flat note as Nifty gained 7 points to settle at 18109. The market breadth remained weak with A/D ratio of 1:1.9. Sector-wise, pharma, FMCG outshone while metal, PSU bank relatively underperformed.
Technical Outlook
The Nifty started Monday’s session on a positive note and approached the upper band of consolidation placed at 18200. However, profit booking form higher levels dragged index below 18100 mark. As a result, daily price action formed a bear candle with sizable upper shadow carrying higher high, indicating breather at higher levels amid stock specific action. In the process, index retraced 61.8% of October decline (18604-17613)
· The absence of faster pace of retracement on either side indicates extended consolidation in the range of 18200-17700 range which would offer incremental buying opportunity as index approaches price/time wise maturity of correction. Key point to highlight over past 18 months is that, price-wise Nifty has maintained the rhythm of not correcting for more than 7-9% while sustaining above 50 days EMA and time-wise intermediate corrections have got arrested within four weeks.
. As index has already corrected 5.5% over past three weeks, we expect index to hold 17500 and eventually challenge upper band of consolidation at 18200. Hence, dips should be capitalised on to accumulate quality stocks
IT solutions company Coforge Ltd has filed papers with the US Securities Exchange Commission (SEC) for an initial public offering (IPO) via the American Depository Receipts (ADR) route. Barings Private Equity Asia will sell part stake as part of the proposed transaction.
Coforge said it has filed Form F-1 registration statement with the US regulator and that its board of directors had approved New York Stock Exchange (NYSE) as the selected stock exchange for the ADR offer. Shareholders interested in participating in the ADR offer, can indicate their interest during 18 November to 2 December.
Domestic pharma major Cipla Ltd will be added to the S&P Dow Jones Sustainability Index for Emerging Markets for 2021.
The DJSI family of indices is operated by one of the world's leading index providers S&P Dow Jones. The emerging markets index for the year comprises of 108 companies from 12 emerging economies.
The Dow Jones Sustainability Emerging Markets Index comprises emerging-market sustainability leaders as identified by S&P Global through the corporate sustainability assessment. It aims to represent the top 10% of the largest 800 companies in 20 emerging markets based on long-term economic, environmental and social criteria.
India's exports rose 43% year-on-year to $35.65 billion in October while trade deficit widened to $19.73 billion during the month, according to official data released on Monday. Imports soared 62.51% to $55.37 billion.
In Delhi, petrol is retailing for ₹103.97 a litre, while pump rates of diesel are ₹86.67/litre.
Japanese extended gains, as investors scooped up companies with upbeat outlook, although gains were capped by caution ahead of the outcome of the U.S.-China summit meeting.
The Nikkei share average gained 0.2% to 29,839.25, after having gained as much as 0.6%. The broader Topix rose 0.4% to 2,056.65.
The initial public offer (IPO) of Sapphire Foods India Limited, which operates KFC and Pizza Hut outlets, was subscribed 6.62 times on the last day of subscription on November 11. The finalisation of basis of share allotment of Sapphire Foods IPO is expected to take place today.
Shares of Dr Reddy's, Bharti Airtel, Ruchi Soya, Escorts, among others, will be in focus on Tuesday.
Bank of Baroda, BHEL, Escorts, Indiabulls Housing Finance, IRCTC, NALCO, PNB, SAIL, and Sun TV Network are under the F&O ban for 16 November.
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