PremiumFed Chair Jerome Powell appeared to signal that restraining inflation is now the key to sustaining economic expansion. Attention now turns to policy announcements later Thursday from the European Central Bank and the Bank of England, which are also facing heated inflation.
Indian stock markets snapped four days of losses to close higher on Thursday, largely led by gains in IT stocks, amid a volatile session.
The Sensex rose 113.11 points, or 0.2%, to end the day at 57,901.14, and Nifty closed up 27 points at 17,248.40.
On the Nifty, Bajaj Finance, Infosys, BPCL, Titan Company and Reliance Industries were among the top gainers, while Hindalco Industries, Cipla, Maruti Suzuki, ICICI Bank and Hero MotoCorp fell the most.
Barring IT and oil & gas indices, all other sectoral indices ended in the red. BSE MidCap and SmallCap indices eased 0.5% each.
Indian markets opened on a positive note following Asian market cues as globally investors assess US Fed's decision on taper and rates. The US Fed communicated to aggressively unwind bond buying and sees three rate hikes in 2022 and two each in following next two years. During the afternoon session, the markets continued to hold their head above water. However, upside remain capped on relentless FII selling in capital markets which impacted traders’ sentiment. During the closing session, the markets succumbed to selling pressure.
Bank Nifty - Weekly View
Axis Securities Limited presents Bank Nifty weekly option report. This report has undergone a detailed analysis to provide you with the Bank Nifty strategy for the current week expiry.
Insights
Bank Nifty has seen an increase in Open Interest of 1.99% with a decrease in the price of -0.75% indicating a Short Build Up.
Nifty has seen an increase in Open Interest of 5.61% with a decrease in the price of -1.71% indicating a Short Build Up.
Option data indicates a probable trading range of Bank Nifty for the day between 36,000 to 37,300 & that for Nifty at 17,000 to 17,450.
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 37,000 strike CALL Option and simultaneously selling one lot of 37,500 strike CALL Option.
European stocks jumped on Thursday after upbeat economic outlook from the U.S. Federal Reserve boosted risk appetite, with investors turning to the European Central Bank for its policy update.
The pan-European STOXX 600 index rose 1.4%, eyeing its best day in over a week, with tech and energy sectors leading the gains.
The Fed on Wednesday flagged a long-awaited end to its pandemic-era bond purchases in March and signalled as many as three rate hikes in 2022, but delivered an otherwise upbeat economic outlook.
The ECB and the Bank of England are set to hold policy meetings later in the day. ECB officials are likely to draw down the bank's Pandemic Emergency Purchase Programme, but investors are waiting to gauge how the six-year-old Asset Purchase Programme may pick up the slack with rate rises still a while away.
Online education provider Byju’s, India’s most valuable startup, is in advanced discussions to go public through a merger with one of Churchill Capital’s special-purpose acquisition companies, according to people familiar with the matter.
The startup has held talks with several potential SPAC partners and is farthest along in working out an agreement with Michael Klein’s Churchill Capital, said the people, asking not to be named discussing private matters. Churchill Capital VII raised more than $1.3 billion in an offering in February and trades on the New York Stock Exchange.
Under the preliminary terms discussed, Byju’s would raise a total of about $4 billion and seek a valuation of about $48 billion, the people said. The startup was valued at $21 billion, according to market research firm CB Insights.
Toll collection was stopped on the stretch since October 2020 due to farmers' protest in Punjab.
TataSteel has executed a 20-year long-term agreement with Angul Sukinda Railway to set up an alternate railway line to meet logistical requirements for Kalinganagar plant.
The steel major will be funding the entire expenditure of ₹400 crore (in a phased manner) for construction of the additional rail line by subscribing to 40,00,00,000 non-convertible, non-cumulative, redeemable preference shares of face value ₹10 each.
Over 14,300 companies were formed in November, near the levels seen prior to the second wave of the pandemic gripped the nation, as per official data. Maharashtra, Delhi and Uttar Pradesh were the frontrunners in attracting new entrepreneurs.
Incorporation of companies, which had dropped to 10,915 in May during the second wave of the pandemic, subsequently gained momentum. Over 16,000 companies were registered each in September and October.
Separately, official data also showed that in the April-September period, there has not been any spike in admission of bankruptcy cases in tribunals after the one-year moratorium on defaults during the pandemic got lifted in March.
Despite some easing in cost side pressures, input costs are likely to remain elevated in the near term and are expected to exert pressure on operating margins, which are likely to decline by 200 to 230 bps in FY2022. While capacity additions are expected to increase in FY22 compared to previous year, reliance on debt is likely to be lower due to healthy cash generation and strong liquidity of cement companies. The debt coverage metrics are seen strong in FY22, said Anupama Reddy, assistant vice president & sector head, Corporate Ratings, ICRA.
On the bright side, a sharp pick-up in infrastructure activity from mid-December and continuing strong rural demand would result in cement production rising by 12% in FY22.
Mohalla Tech, the parent company of Moj and ShareChat, has raised $266 million (around ₹1,995 crore) as part of its Series G funding round led by Alkeon Capital at a valuation of $3.7 billion, the company said in a statement.
The round also saw participation from Temasek Holdings, Moore Strategic Ventures (MSV), Harbourvest and India Quotient.
The company said the funds raised will help build capabilities in areas such as social and live commerce, growing its artificial intelligence and machine learning (AI/ML) team which now consist of over 100 people spread across the US, Europe and India.
The Reserve Bank of India has imposed a penalty of ₹30 lakh on ICICI Bank for deficiencies in regulatory compliance.
The central bank said the statutory inspection for supervisory evaluation of the bank was conducted by it with reference to its financial position as of 31 March 2019. Later, the RBI found non-compliance with directions related to levy of charges for non-maintenance of minimum balance in saving accounts.
Ratings agency Icra Ltd has revised lower growth forecast for the domestic passenger vehicles industry to 8-11% for the current fiscal from the earlier projected 14-17% due to chip shortages. For the two-wheeler segment, it said volumes are expected to contract 1-4% in FY22 against an earlier prediction of 6-8% growth.
National Payments Corp. of India (NPCI) on Thursday said its international payments arm NPCI International Payments Limited (NIPL) has tied up with currency exchange major Western Union to enable real-time bank account payout in India.
TP Saurya Limited (TPSL), a wholly owned subsidiary of Tata Power, has received the 'Letter of Award’ (LoA) from Maharashtra State Electricity Distribution Company Limited (MSEDCL) for setting up 300 MW hybrid power capacity. This project has been awarded through tariff-based competitive bidding followed by e-reverse auction.
The project will be commissioned within 18 months from the date of PPA execution.
The ₹700 crore IPO of Supriya Lifescience Limited opened for subscription today and will close on 20 December.
Supriya Lifescience is one of the key Indian manufacturers and suppliers of active pharmaceutical ingredients (APIs). The company has niche product offerings of 38 APIs focused on diverse therapeutic segments such as antihistamine, analgesic, anaesthetic, vitamin, anti-asthmatic and anti-allergic. It has manufacturing plant in Maharashtra, which is spread across 23806 sq. mt.
On the valuation side, based on FY2021 numbers, the IPO is priced at an EV/EBITDA of 11.2 times and price to earnings of 16.2 times at the upper price band of the IPO.
The company's 77.5% of revenue comes from exports.
We believe that the company's new manufacturing unit and product launch will be growth drivers for the company in future. Hence, we are assigning a “SUBSCRIBE" recommendation to the Supriya Lifescience Limited IPO.
Softbank-backed ride hailing platform Ola on Thursday said it has raised $500 million debt from marquee international institutional investors.
The company has raised the amount via Term Loan B (TLB). Institutional investors that seek higher yields and can stay invested over longer investment horizons compared to traditional banks offer such loans. TLBs usually have a floating interest rate with tenures of 5-7 years.
"The proposed loan issuance received a staggering response from investors with interest and commitment of approximately USD 1.5 billion...Ola is expected to utilize the term loan to fuel its vision for the future of mobility across its various businesses including ride hailing, vehicle commerce, delivery with foods, quick commerce and financial services," Ola said in a statement.
S&P and Moody's had rated Ola's first lien term loan as B- and B3 respectively, with a 'stable' outlook, on the back of strong unit economics and profitability in its market leading Indian ride hailing business, it added.
“The overwhelming response to our term loan B is a reflection of the strength of our business and our continued focus on improving unit economics alongside rapid growth. At Ola, we are accelerating our journey towards building the New Mobility ecosystem to help a billion people move sustainably," Ola founder and CEO Bhavish Aggarwal said.
JP Morgan and Deutsche Bank were joint lead arrangers for the deal.
The market seems a bit nervous as is evident from the continuous seeing selling pressure at higher levels. But they do not seem to be falling into a bottomless pit, creating ambiguity among traders. Such sessions are difficult to trade because the moment you tend to gain some confidence of the direction, it immediately reverses. In our sense, next couple of sessions would be crucial and although our directional view remains cautious, we would be closely tracking how things pan out. Meanwhile, 17200-17100 are to be seen as key supports and 17300-17350 should be treated as important hurdles.
State-owned Hindustan Aeronautics Limited (HAL) on Thursday signed a contract with Bharat Electronics Limited (BEL) for development and supply of 20 types of systems for the LCA (Light Combat Aircraft) Tejas Mk1A programme.
A statement from HAL said the five-year contract spanning from 2023 to 2028 was valued at ₹2,400 crore.
This would give a major boost to indigenization programmes and is the “biggest ever order that HAL has placed on any Indian company boosting ‘Atmanirbhar Bharat’ campaign," the statement said.
Social media platform Reddit said on Wednesday it had confidentially filed for a proposed initial public offering (IPO) with the U.S. Securities and Exchange Commission.
Reddit, known for its message boards that became the go-to destination for day traders during this year's meme stock frenzy, was looking at a valuation of more than $15 billion, Reuters had reported in September.
The company was valued at $10 billion in a private fundraising round earlier this year.
The San Francisco-based firm had retail investors flocking to its message boards for tips on trading GameStop Corp and other meme stocks.
Reddit had roughly 52 million daily active users and over 100,000 communities, or "sub-reddits," as of October last year.
The Power Transmission Et Distribution business of Larsen Et Toubro has bagged a slew of orders both in India and overseas.
An order has been secured to provide Dynamic Reactive Power Compensator System at a 220kV Substation in Abu Dhabi. To enhance the grid stability and provide voltage support, specialized equipment such as STATCOMs / SVCs are deployed in substations. The scope of this package includes related protection, Substation Control and Monitoring System (SCMS), 220kV cables and associated civil, mechanical, and electrical works.
Further in the Middle East region, the business has won orders to construct 380kV Overhead Transmission Lines, 132kV network connections and to establish a 400kV substation.
The business has also bagged an order to build a new 220kV Gas Insulated Substation in Bangladesh.
In India, orders have been won to create power distribution infrastructure in two circle areas of Bengaluru.
Additional orders have also been received in ongoing substation and transmission line projects.
L&T categorises orders worth ₹2,500 crore to ₹5,000 crore as large.
Gold prices inched higher on Thursday as the dollar eased, while investors shifted their focus away from the U.S. Federal Reserve to other key central bank meetings.
Spot gold was up 0.2% at $1,780.63 per ounce in Asian deals. U.S. gold futures rose 0.9% to $1,780.20.
“Gold prices got knocked down after the Fed signaled inflationary pressures will force them to finish tapering by mid-March and that next year they could deliver three rate hikes, with an additional three in 2023. The risk that the economy could fall into recession in 2023 does not seem so unreasonable. Gold’s weakness could be near its end as the Fed will be on autopilot until the March policy meeting," said Edward Moya, senior market analyst, The Americas, OANDA.
The dollar index moved lower from a three-week high hit in the previous session.
The Fed said on Wednesday it would end its pandemic-era bond purchases in March and paved the way for three quarter-percentage-point interest rate hikes by the end of 2022.
Even though the Nifty has opened with a gap up, it is imperative for it to close above 17500-17600 for an uptrend to emerge. Until then it would be sideways with a downward bias. 17100-17150 is the support patch that needs to hold as a break that would signal the resumption of the bear trend.
Data Patterns' ₹588 crore IPO is open for subscription from 14-16 December.
The company is focused on developing complete systems and sub-system solutions in domains like radars, electronic warfare, communication systems, RF and microwave, military COTS (digital receivers, processor boards, modules), avionics, missile and torpedo electronics, fire control systems, etc
Strong order book of | 581.3 crore across product categories supplying customers in the defence and aerospace industry
Current manufacturing facility consists of a ~100000 sq ft factory built on ~5.7 acres of land in Chennai. It is in the process of upgrading and expanding its facility with doubling of available floor area and facility
Beneficiary of shifting procurement trends and in defence- Atmanirbhar Bharat, Make in India, new defence acquisition policies among others
Data Patterns' innovation focused business model, large market opportunities in Indian defence & aerospace, strong order book across product categories, consistency in profitable growth due to scalable business model are likely to help improve its growth and margins in the long run. At the upper end of the price band, it is valued at ~56x P/E for FY21.
We assign SUBSCRIBE rating to the IPO.
Oil prices rose on Thursday as U.S. implied consumer petroleum demand surged to a record high in the world's top oil consumer even as the Omicron variant of coronavirus threatens to dent oil consumption globally.
A signal by the U.S. Federal Reserve to tackle inflation before it derails the U.S. economy also boosted prices.
Brent crude oil futures rose by 80 cents, or 1.1%, to $74.68 a barrel, while U.S. West Texas Intermediate (WTI) crude futures increased by 88 cents, or 1.2%, to $71.75.
Spectrum availability across all bands, rational pricing and easy payment terms are among the key requirements for making 5G technology a success in India, telecom operators have said.
Corporate credit growth is beginning to see a turnaround with the credit-deposit (CD) ratio of banks improving after the 20-month lull that came as a fallout of the coronavirus outbreak, according to State Bank of India (SBI) chairman Dinesh Khara. SBI’s CD ratio has improved by as much as 4%, Khara said at the Annual Mint Banking Conclave on Wednesday.
“Ever since the festival season has got over, for the last two months we are witnessing growth in the corporate cycle. The credit-deposit ratio for all banks has started inching up. We have seen an improvement in the credit-deposit ratio by 4%. Retail credit growth continues to do well," he said.
SBI is sitting on an unavailed credit limit of ₹5 trillion, he said. Corporates have started availing the limits, but much of the credit pick-up is because of increased government spending in the infrastructure sector. (Read here)
Competition Commission of India (CCI) has cleared the acquisition of Sterling and Wilson Renewable Energy Ltd (SWREL) by Reliance Industries Ltd (RIL) from its current shareholders, including the Shapoorji Pallonji Group.
The deal announced in October involved RIL’s wholly owned arm Reliance New Energy Solar Ltd purchasing interest in SWREL from the Shapoorji Pallonji Group and making an open offer as per takeover regulations.
CCI said the deal envisages acquisition of 40% of the equity share capital of SWREL by Reliance New Energy Solar but the acquisition can go up to 51.07% of equity share capital of SWREL in the eventuality of full acceptance of the open offer. RIL announced in October that the deal involved a series of transactions. Reliance New Energy Solar Ltd. is a newly incorporated entity which does not offer any services in India.
Shares of ICICI Bank, PNB, Yes Bank, Dish TV, Sun Pharma, auto shares, among others, could be in focus on Thursday.
Asian stocks were mixed on Thursday following a rally in U.S. equities spurred by speculation that Federal Reserve policy tightening will help fight inflation without derailing economic growth.
Japan gained, aided by a weaker yen, but Hong Kong slid and China fluctuated as traders weighed worries about U.S. sanctions on Chinese firms. S&P 500 and Nasdaq 100 contracts wavered after technology shares powered Wall Street to a strong close, overcoming initial declines following the Fed statement.
The U.S. central bank said it will double the pace at which it tapers bond purchases to $30 billion a month and projected three quarter-point interest-rate increases in 2022, another three in 2023 and two more in 2024. It also flagged economic risks from the omicron virus strain.
Japan’s Topix index rose 0.8%, Australia’s S&P/ASX 200 index slipped 0.6%, South Korea’s Kospi added 0.2%, Hong Kong’s Hang Seng Index fell 1%, and China’s Shanghai Composite Index was flat.
Overnight on Wall Street, stocks rose after the Federal Reserve said it would accelerate its pullback of economic stimulus and would likely raise interest rates three times next year to tackle rising inflation.
The S&P 500 rose 75.76 points, or 1.6%, to 4,709.85, the Dow Jones Industrial Average climbed 383.25 points, or 1.1%, to 35,927.43 and the Nasdaq advanced 327.94 points, or 2.2%, to 15,565.58.
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