PremiumFocus now shifts to the U.S. Federal Reserve's two-day meeting next week against the backdrop of the global banking turmoil, with traders expecting an 83% likelihood of a smaller 25 bps hike in the world's largest economy.
Indian equities closed higher for the second straight day on Friday, largely led by gains in IT stocks, financials and metal shares.
Globally, too, equities rose on improved investor sentiment. European stock indexes rose in early trading on Friday, extending a recovery from the previous day as fears about a banking crisis eased slightly after top U.S. authorities and banks took action to rescue First Republic Bank.
Back home, the benchmark Sensex climbed 355.06 points to close the session at 57,989.90, while the Nifty rose 114.40 points to 17,100.
On the Nifty, HCL Technologies, Hindalco Industries, UPL, UltraTech Cement and Nestle India rose the most, while Eicher Motors, NTPC, Maruti Suzuki, ITC and Asian Paints were worst hit.
All sectoral indices ended higher, barring auto, pharma and FMCG.
Mid-caps rose 0.3% while small-caps index increased 0.7%.
European shares extended a rebound on Friday as supportive measures in the United States and Europe calmed fears about a looming global banking crisis, but the index was set to post a second straight weekly drop.
The pan-European STOXX 600 rose 0.7%, lifted by a sharp recovery in oil and gas stocks.
Banks gained 1.1% following a $30 billion lifeline by large U.S. banks for embattled lender First Republic Bank .
The rescue package came less than a day after battered Swiss bank Credit Suisse clinched an emergency central bank loan of up to $54 billion to shore up its liquidity.
China's central bank said on Friday it would cut the amount of cash that banks must hold as reserves for the first time this year to release liquidity and support the economy.
The People's Bank of China (PBOC) said it would cut the reserve requirement ratio (RRR) for all banks, except those that have implemented a 5% reserve ratio, by 25 basis points (bps), effective 27 March.
That follows a 25-bp reduction for all banks in December.
Top Indian information technology firms Tata Consultancy Services and Infosys have the highest exposure to regional banks in the United States that are gripped by a financial turmoil, analysts at J.P.Morgan said on Friday.
Regional banks in the US account for 2-3% of their revenue, J.P. Morgan said in a note, adding that the exposure to the recently collapsed Silicon Valley Bank could be 10-20 basis points for TCS, Infosys and smaller rival LTIMindtree, with the Tata group company in the lead.
All three companies might need to set aside provisions in the fourth quarter due to their exposure to SVB, as per the J.P. Morgan note. (Read here)
Gold advanced on Friday, buoyed by a weaker dollar, and was poised for its biggest weekly gain since mid-November as a global banking crisis sent investors flocking to the safe-haven metal.
Spot gold was up 0.7% at $1,931.90 per ounce. Bullion has risen about 3.4% this week, heading for a third consecutive weekly gain.
U.S. gold futures rose 0.7% to $1,936.10.
Gas utility GAIL on Friday said it has signed an agreement with Shell Energy India Pvt Ltd to explore ethane sourcing and other opportunities along the energy value chain.
GAIL is planning to import ethane from the US to replace natural gas and naphtha as feedstock at petrochemical plants.
In a statement, GAIL said it has signed a memorandum of understanding with Shell Energy India to "explore opportunities for infrastructure development for ethane sourcing."
Sanofi will cut the US list price of two of its insulins, making it the third major producer of the diabetes medicine to recently slash prices.
French pharmaceutical maker Sanofi will reduce the US list price of Lantus, its most-prescribed insulin, by 78%, according to a statement Thursday. The company will also reduce the list price of Apidra by 70%.
India’s gross domestic product (GDP) growth is likely to touch 6% in fiscal 2024, compared with 7% estimated by the National Statistical Organisation (NSO) for fiscal 2023, rating agency Crisil said on Thursday.
It expects the economy to average a growth rate of 6.8% over the next five fiscals. Crisil added that corporate revenue will likely record in double-digit rise again next fiscal.
“A complex interplay of geopolitical events, stubbornly high inflation -- and sharp rate hikes to counter that -- have turned the global environment gloomier," the rating agency said.
Lemon Tree Hotels Limited has signed its latest hotel, a 60-key hotel in Rajasthan in Sri Ganganagar. The property is expected to be operational by July 2026 and will be managed by its subsidiary, Carnation Hotels Private Limited.
The company currently operates about 8,400 rooms in 87 hotels in about 50 locations. It is targeting 12,000 rooms in 130 hotels in 84 destinations. It has seven brands including Aurika Hotels & Resorts, Lemon Tree Premier, Lemon Tree Hotels, Red Fox by Lemon Tree Hotels, among others. The company also expanded internationally in Dubai in 2019 and in Bhutan in February 2020.
Shares of Info Edge (India) Ltd have not recovered from the sharp 9% drop seen on 13 February following the company's December quarter (Q3FY23) results. Recall that an unexpected impairment charge on its investment in 4B Network Pvt. Ltd had hurt investor sentiments as it raised concerns about Info Edge’s new and existing investments.
Moreover, the outlook in its largest segment, recruitment, is not very encouraging. This vertical includes Info Edge’s flagship platform, Naukri. The company was hosted at Nomura’s virtual India Corporate Day where the former said that hiring slowdown in tech related sectors, which started in the September quarter, continued. Note that the information technology (IT) sector forms a significant portion of the recruitment revenue.
Ecofy, an NBFC backed by Eversource Capital that provides green finance for climate-positive segments, announces its partnership with Mahindra Solarize, a provider of technologically superior and creative solutions in the renewable energy sector. This collaboration for rooftop solar financing and installation in the retail segment will give Ecofy access to over 50 dealers in the states of Maharashtra, Madhya Pradesh, Gujarat and Rajasthan, expanding its potential customer base by more than 5000 customers.
-Aims to install 500 solar rooftops with a credit line of ₹50 crore
-Loan EMI’s lesser than average electricity bill
-Customers will be eligible for green credits
In an unexpected move, Rajesh Gopinathan, managing director and chief executive officer at Tata Consultancy Services Ltd (TCS) has stepped down from his position. K Krithivasan, the global head - BFSI, has been appointed as TCS's CEO designate. In reaction, the TCS stock was trading flat on Friday, down 0.5%
Earlier this month, close competitor Infosys Ltd also saw Mohit Joshi's exit who has been appointed as CEO designate at another large-cap Tech Mahindra Ltd. Note that this is the second biggest exit at Infosys following the resignation of Ravi Kumar in October. Kumar is the CEO at Cognizant. (Read here)
“Transactions in VDA (virtual digital asset) have been on the government’s radar for a while. This has led to income from transfer of VDA being subjected to a high income-tax rate of 30% and introduction of a 1% withholding tax on the transaction. Although the government has imposed tax on VDA, there are no specific regulations framed to recognize the overall legality of transactions in VDA. Therefore, widening the ambit of reporting entities in respect of VDA transactions would only enable the government to gather more information relating to such activities. By adding increased reporting requirements, the government is also keeping close watch over the amounts received by NPOs. The government is clearly tightening the noose around activities surrounding proceeds of crime and given the wide scope of scheduled offenses which could trigger an investigation by the ED, one must ensure that all compliances/ reporting is done on a timely basis providing all prescribed information"
Glenmark Pharmaceuticals's subsidiary has received acceptance from the US health regulator to proceed with a phase 1/2, first-in-human trial for its investigational new drug aimed for treatment of patients with advanced cancers.
About $200 million of the $1 billion funds held by Indian startups in Silicon Valley Bank (SVB) were transferred to GIFT City, a global financial centre located in Gujarat, after the US lender collapsed, Rajeev Chandrasekhar, minister of state for electronics and information technology, said in an interview.
The minister said that the crisis triggered by the bank’s collapse is now a more manageable short-term liquidity issue instead of an existential solvency crisis faced by startups with money stuck in the bank. (Full Story)
Indian digital payments firm PhonePe said on Friday it has raised $200 million in additional funding from Walmart Inc, its parent company, at a pre-money valuation of $12 billion.
This new funding comes as a part of PhonePe’s ongoing fundraise of up to $1 billion in capital, following its domicile shift to India last year. With this tranche, the company has raised $650 million from several global investors. The company expects further investments, which will be announced in due course.
PhonePe plans to deploy these funds to build and scale new businesses like insurance, wealth management, lending, stockbroking, ONDC-based shopping and account aggregators. The fundraise will also help PhonePe turbo-charge the next wave of growth for UPI payments in India, including UPI lite and Credit on UPI.
The rupee reversed its four-day losing streak and rose 25 paise to 82.51 against the US dollar in early trade on Friday amid positive trends in the domestic as well as global equity markets.
On Thursday, the rupee settled at 82.76 against the US dollar, falling for the fourth day in a row.
Voltas (CMP 881)
Considering the decent earnings growth, higher volume and improved business visibility over the medium-term, we have our BUY rating on the stock, with a Target Price of Rs1,015.
Intraday Picks
BHARTIARTL (PREVIOUS CLOSE: RS746) SELL
For today’s trade, short position can be initiated in the range of Rs757-760 for the target of Rs736 with a strict stop loss of Rs772.
BRITANNIA (PREVIOUS CLOSE: 4,311) BUY
For today’s trade, long position can be initiated in the range of Rs4,280-4,255 for the target of Rs4,260 with a strict stop loss of Rs4,229.
M&M (PREVIOUS CLOSE: 1,167) BUY
For today’s trade, long position can be initiated in the range of Rs1,166-1,160 for the target of Rs1,189 with a strict stop loss of Rs1,14
On Thursday, Union defence minister Rajnath Singh, in the meeting of the defence acquisition council, approved proposals to procure ₹70,000 crore worth of different weapon systems for the Indian defence forces.
The deal includes purchase of 60 UH Marine choppers from Hindustan Aeronautics (HAL), worth ₹32,000 crore.
Tata Consultancy Services named K. Krithivasan as chief executive after Rajesh Gopinathan unexpectedly resigned.
On Thursday, the Sensex closed up 78 points at 57,634, and the Nifty closed up 13 points at 16,985.
In the morning trade of Thursday, after a flat opening, the Nifty traded below 16,900 & after making a day high of 16,995.40, the Nifty bounced back near 16,855. Which was a day low of 3rd Oct 2022 at 16,855 & lower daily trend line yesterday.
Intraday traders can look for long opportunities only above the resistance level of 17,130 if it sustains for 15 minutes. Traders can look for fresh shorts only if nifty breaks the 16,800 level & remains below for 15 min to ensure short.
Short Term Trend: Uptrend
Telecom operators have asked the government to make illegal sale of signal boosters and repeaters on e-commerce platforms a cognizable offence with jail term and fine to check their unregulated use.
At a recent meeting with telecom department officials, executives of telcos raised their concerns in this respect. Boosters or repeaters that are allowed to be put up solely by telcos for improving signals in poor connectivity zones in urban areas, are available for sale in the grey market and through some e-commerce platforms, said industry executives. (Read here)
The crypto market pushed higher as efforts to shore up the banking sector and bets that the US may start cutting interest-rates later this year bolstered investor sentiment.
Bitcoin, the largest token, rose as much as 4.9% and was trading at about $25,950 as of 10:25 a.m. in Singapore on Friday. Second-ranked Ether added more than 3%, while smaller tokens like Solana and Polkadot also jumped.
Bitcoin has climbed about 57% so far this year and is in touching distance of the highest level since June 2022. But the token remains a long way off its record of $69,000 from November 2021.
Tata Consultancy Services named K. Krithivasan as chief executive after Rajesh Gopinathan unexpectedly resigned.
The decision surprised senior leaders of India’s largest software services company and is being referred to as an uncharacteristic move by former employees.
On Thursday, TCS told the exchanges that Gopinathan had resigned. The move will be effective 15 September, making Gopinathan’s six-year tenure the shortest in the company’s history. (Read here)
Oil prices were little changed on Friday after a meeting between Saudi Arabia and Russia calmed markets, but crude benchmarks were still headed for a second weekly fall after a banking crisis sparked a sell-off in global financial markets this week.
Brent crude futures edged up 2 cents to $74.72 a barrel, having snapped three days of losses to settle 1.4% higher on Thursday.
U.S. West Texas Intermediate crude was at $68.33 a barrel, down 2 cents after closing 1.1% higher in the previous session.
Shares of TCS, NTPC, IDBI Bank, Adani Enterprises, ZEE Entertainment, among others, will be in focus today.
Nifty futures on Singapore Exchange rose 102 points to 17,125 in early deals, indicating a higher start for Indian indices on Friday.
Indian equities snapped a five-day losing streak on Thursday, with Sensex up 78.94 points at 57,634.84, and Nifty climbing 13.40 points to end the day at 16,985.6.
Asian equities advanced Friday after a rescue package for First Republic Bank fueled a rebound in US shares. A lifeline from the Swiss National Bank to Credit Suisse also eased fears of a global banking crisis.
Bond yields in the region moved higher as investors continue to weigh chances of further interest rate hikes.
Stocks rose in Japan, South Korea and Australia, while stock a futures for benchmark for Hong Kong gained more than 1%. Contracts for the S&P 500 and the Nasdaq 100 little changed.
The S&P 500 notched its largest one-day advance since January on Thursday after the biggest US lenders agreed to contribute $30 billion in deposits to First Republic, easing speculation that the bank could be the next to fail after two high-profile demises touched off the crisis last week.
Overnight, Wall Street stocks finished solidly higher after a consortium of major US private banks announced a $30 billion rescue package for embattled lender First Republic.
The European Central Bank stuck to a planned interest rate increase Thursday as it remained laser-focused on battling sky-high inflation despite market turmoil over fears of a widening banking crisis.
The central bank's half percentage point increase was its sixth in a row and it said there was "more ground to cover", although it signalled a potentially dovish turn, dropping language about the need to raise rates "significantly" going forward.
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