PremiumMuch of the debate in markets is now focused on whether the US Fed will deliver another quarter-point hike or pause at its meeting on 21-22 March. Traders do not see much chance of a half-point hike that Chair Jerome Powell had put on the table just before concerns about financial stability emerged.
After a brief two-day respite, Indian indices closed lower again on Monday as worries about a potential global banking sector crisis hammered already fragile investor sentiment.
Globally, too, stock markets sank Monday after Swiss authorities arranged the takeover of troubled Credit Suisse amid fears of a global banking crisis ahead of a Federal Reserve meeting to decide on more possible interest rate hikes.
Hong Kong's main index slid 2.7%. London, Frankfurt and Paris opened down more than 1%. Shanghai, Tokyo and Sydney also declined. Wall Street futures were off 1%. Oil prices plunged more than $2 per barrel.
Back home, the benchmark Sensex fell 360.95 points to close the day at 57,628.95. It had touched a low of 57,084.91 earlier in the session. The broader Nifty ended 111.60 points lower at 16,988.40.
Barring FMCG, all sectoral indices ended in the red with realty, capital goods, IT, metals, and PSU Bank down 1-2%.
BSE mid-cap and small-cap indices shed 1% each.
India outlined plans on Monday to invest billions of dollars in airports, aircraft and recruitment as the world's fastest-growing economy seeks to meet booming air travel demand.
Growth will include new airports, more regulators and air traffic controllers, and new flying schools, Civil Aviation Minister Jyotiraditya Scindia told an industry audience.
"We need to put in place the civil aviation infrastructure and capabilities that by 2047 would be able to support a $20 trillion economy within India," Scindia told the CAPA India Aviation Summit in New Delhi.
Prime Minister Narendra Modi's government said this year that the country would spend 980 billion rupees by 2025 to boost regional connectivity by constructing airports and modernising existing ones.
SpiceJet chief Ajay Singh on Monday said the airline was significantly restructuring its balance sheet and will aggressively push for fleet expansion.
The airline will also have a significant number of dedicated cargo aircraft, he said, adding that the cargo business has helped the airline pay off its liabilities.
Last month, the airline announced that Carlyle Aviation Partners will acquire a 7.5% stake in the airline by converting outstanding dues as well as snap up shareholding in the cargo business.
Besides, it is set to tap the Qualified Institutional Buyer (QIB) route to raise up to ₹2,500 crore.
Amid the budget carrier facing multiple headwinds, he also said that a measure of desperation is always good for an organisation... we will emerge stronger".
"It is in our (SpiceJet) DNA. We just refuse to die," Singh said at a session at CAPA India aviation summit here.
Amazon.com Inc. is in advanced talks to acquire MX Player, the video streaming platform owned by Times Internet, three people with direct knowledge of the development confirmed.
The US e-commerce giant has hired one of the Big Four accounting firms to carry out due diligence of MX Player exclusively, and the process is expected to take 30-40 days, one of the three people said, requesting anonymity.
A deal could happen within two months if all goes well, the second person said, also declining to be named.
“The talks have been on for a while," said the person. “Earlier, Times Internet was asking for over $100 million for MX Player, while Amazon’s internal team valued it at around ₹500 crore ($60 million). The deal is likely to be in the range of ₹600-900 crore."
Startup deal volume in India plunged to a near nine-year low in February, underscoring a worsening funding winter in the startup ecosystem.
Just one startup received funding every 10 hours during the month, compared with the peak just about a year ago when it happened every three hours, showed data collated by VCCEdge, the data research platform of VCCircle. (Read here)
Europe's leading stock markets slid at the start of trading Monday despite a buyout of Credit Suisse aimed a stamping out a fresh crisis for the global banking sector.
London's benchmark FTSE 100 index slid 1.1% to 7,258.31 points.
In the eurozone, Frankfurt's DAX index retreated 1% to 14,617.00 points and the Paris CAC 40 lost 0.8% to 6,868.51.
Credit Suisse Group AG shares down 62.09%, at open, on track for biggest daily decline ever.
Gold prices regained some ground on Monday, trimming earlier losses, as worries about the global banking sector returned to the fore despite rescue efforts by Swiss lender UBS to buy peer Credit Suisse to stabilise broader financial markets.
Spot gold was up 1% at $2,007.30 per ounce, after sliding 1% earlier in the session. U.S. gold futures climbed 2% to $2,012.50.
On Sunday, UBS agreed to buy Credit Suisse for $3.23 billion and assume up to $5.4 billion in losses in a deal backed by a massive Swiss guarantee.
Oil prices fell on Monday to their lowest in 15 months on concerns risks in the global banking sector may cause a recession that would lead fuel demand to decline and ahead of a potential hike in U.S. interest rates this week.
Brent crude futures for May settlement fell $2.32, or 3.2%, to $70.65 a barrel. The contract earlier declined to as low as $70.56, its lowest since December 2021.
Last week, Brent fell nearly 12%, its biggest weekly fall since December.
U.S. West Texas Intermediate crude for April delivery was at $64.59 a barrel, down $2.15, or 3.2%. It earlier fell to $64.51, also its lowest since December 2021. The contract declined by 13% last week, its biggest weekly drop since last April.
Coal India Chairman Pramod Agrawal on Monday said there is a "strong case" for increasing coal prices, and the hike could be effected "very soon" as discussions are underway with stakeholders, the Press Trust of India reported.
Agrawal also said he is confident the mining behemoth will achieve its production target of 1 billion tonnes by 2025-26.
"There is a strong case for increasing coal prices, as that has not happened in the last five-odd years. This year, the wage negotiation has taken place as well, which will have an impact on CIL's financial condition, especially for a few subsidiaries where the manpower cost is very high.
Adani Enterprises has suspended work on a ₹34,900 crore petrochemical project at Mundra in Gujarat as it focuses on resources to consolidate operations and address investor concerns following a damning report by a US-based short seller. Adani Enterprises Ltd (AEL) had in 2021 incorporated a wholly-owned subsidiary, Mundra Petrochem Ltd, for setting up a greenfield coal-to-PVC plant at Adani Ports and Special Economic Zone (APSEZ) land in Kutch district of Gujarat.
Amid increased global uncertainty induced by the collapse of three US banks over a week, foreign portfolio investors (FPIs) have raised cumulative bearish positions on Nifty and Bank Nifty futures to a three -year high of 171,679 contracts.
The positions have been built ahead of the US central bank meeting on interest rates later this week and amid western banking regulators scurrying to create backstops to prevent contagion from the crisis-hit Silvergate Corp., Silicon Valley Bank, Signature Bank, and Swiss lender Credit Suisse. (Read here)
Banking stocks tumbled on Monday as initial relief over a historic state-backed rescue of troubled lender Credit Suisse by Swiss rival UBS Group gave way to new worries about the risks of high-yield debt issued by big banks.
In a package orchestrated by Swiss regulators on Sunday, UBS Group AG will pay 3 billion Swiss francs ($3.23 billion) for 167-year-old Credit Suisse Group AG and assume up to $5.4 billion in losses.
Major central banks, faced with the risk of a fast-moving loss of confidence in the financial system, also scrambled on Sunday to bolster the flow of cash around the world with a series of coordinated currency swaps to ensure banks have the dollars needed to operate.
Standard Chartered Plc and HSBC shares each fell more than 6% in Hong Kong on Monday to more than two-month lows, with HSBC facing the possibility of posting its largest one-day drop in six months. The MSCI index for financial stocks in Asia ex-Japan was down 1.3%.
Tokyo shares ended lower on Monday, weighed by concerns about the global banking sector as well as a stronger yen.
The benchmark Nikkei 225 index fell 1.42 percent, or 388.12 points, to 26,945.67, while the broader Topix index lost 1.54 percent, or 30.12 points, to 1,929.30.
India plans to extend restrictions on export of diesel and gasoline after the current fiscal year ends this month to ensure availability of refined fuels for domestic market, two government sources with direct knowledge of the matter told Reuters.
The extension of rules may discourage some Indian refiners, mainly private companies, from buying Russian fuels for re-exports to countries including those in Europe that have stopped purchases of refined products from Russia due to its invasion of Ukraine.
India, the world's third-largest oil consumer, imposed a windfall tax on refined fuel exports last year and mandated that companies sell the equivalent of 50% of their gasoline exports and 30% of their diesel exports domestically in the current fiscal year to 31 March.
Oil prices fell on Monday for a second session on concerns that risks in the global banking sector may cause a recession that would lead fuel demand to decline and ahead of a potential interest rate hike by the U.S. Federal Reserve this week.
Brent crude futures for May settlement slid 68 cents, or 0.9%, to $72.29 a barrel, after a near 12% loss last week, its biggest weekly fall since December.
Key triggers for future price performance:
• The new organisation structure, which is aimed at increasing customer stickiness, is expected to enhance market share gains
• Increase in outsourcing in Europe, vendor consolidation and deal pipeline leading to rupee revenue CAGR of 11.0% over FY22-25E
• We expect margins to improve from FY23 onwards due to utilisation improvement and moderation of sub-contractor costs. We build in margin expansion of 110 bps over FY23-25E
• Double-digit return ratios, strong cash generation and healthy payout
We value TCS at | 3,780 i.e. 26x P/E on FY25E EPS.
Glenmark Pharmaceuticals on Monday said it has received approval from the US health regulator to market a generic product used to treat schizophrenia and in some cases to control severe nausea.
The company has received nod from the US Food & Drug Administration (USFDA) for Prochlorperazine Maleate Tablets USP, 5 mg and 10 mg, the Mumbai-based drug maker said in a statement.
The company's product is the generic version of GlaxoSmithKline's Compazine tablets, it added.
STOCK IN FOCUS
Finolex Industries (CMP 163)
Considering the leading position in the Agri-pipe segment and backward integration for the PVC Resin business, sustained cash flow and high dividend pay-out of 35% (average over FY16-FY22), we have BUY rating on the stock, with a Target Price of Rs200.
Intraday Picks
COALINDIA (PREVIOUS CLOSE: RS222) SELL
For today’s trade, short position can be initiated in the range of Rs224- 226 for the target of Rs216 with a strict stop loss of Rs229.
BRITANNIA (PREVIOUS CLOSE: 4,363) BUY
For today’s trade, long position can be initiated in the range of Rs4,340- 4,320 for the target of Rs4,440 with a strict stop loss of Rs4,290.
HDFC (PREVIOUS CLOSE: 2,564) BUY
For today’s trade, long position can be initiated in the range of Rs2,530- 2,520 for the target of Rs2,605 with a strict stop loss of Rs2,495.
The rupee rose 11 paise to 82.48 against the US dollar in early trade on Monday, amid a fall in crude oil prices and tracking firm Asian currencies.
Traders said, a strong dollar and negative sentiments across the global as well as domestic equity markets capped gains in the rupee.
At the interbank foreign exchange, the domestic unit opened stronger at 82.48 against the US dollar and then slipped to 82.52. It gained further to 82.48, registering a gain of 11 paise.
On Friday, the Indian unit had settled at 82.59 against the US dollar.
Rail Vikas Nigam has emerged as the lowest bidder for a project awarded by Haryana Rail Infrastructure Development Corp.
The composite contract package in connection with new BG Railway Line of HORC project including, design & construction of twin tunnel using NATM and cut & cover method from km 24.880 to km 29.580 and design & installation of ballast less track (excluding supply of rails) from km 24.856 to km 29.680.
Turmoil in the banking sector, hotter-than expected inflation data, and renewed hopes for a dovish Federal Reserve has Bitcoin reaching levels not seen in about nine months.
The largest digital asset topped $28,000 for the first time since June 2022, trading for as much as $28,258. Since the start of the year, Bitcoin’s price has risen almost 70%. Other digital assets rallied as well — with Ethereum up about 17% since the start of last week and so-called altcoins like Solana and Cardano advancing, too.
Some of the world's largest central banks came together on Sunday to stop a banking crisis from spreading as Swiss authorities persuaded UBS Group AG to buy rival Credit Suisse Group AG in a historic deal.
UBS will pay 3 billion Swiss francs ($3.23 billion) for 167-year-old Credit Suisse and assume up to $5.4 billion in losses in a deal backed by a massive Swiss guarantee and expected to close by the end of 2023.
Soon after the announcement late on Sunday, the U.S. Federal Reserve, European Central Bank and other major central banks came out with statements to reassure markets that have been walloped by a banking crisis that started with the collapse of two regional U.S. banks earlier this month.
Maharashtra is poised to become the new owner of the iconic Air India building at Nariman Point, Mumbai, following the state government’s fresh offer of ₹1,600 crore to acquire the property.
State-owned AI Assets Holdings Ltd, a company formed to manage Air India’s debt and assets after the airline’s acquisition by the Tata group in January 2022, rejected a previous proposal from the state government for office space in the Air India building.
“The fresh offer by the Maharashtra government has been accepted, and the process is on within the government to clear the sale. The final approval will come from the ministerial group (headed by Union home and cooperation Minister Amit Shah)," an official said on a condition of anonymity.
The Shapoorji Pallonji Group, one of India’s oldest business conglomerates, is undertaking a major restructuring by creating two holding companies to house its diverse businesses, ranging from real estate and construction to oil and gas, to be overseen by children of brothers Shapoor and Cyrus Mistry, according to two people aware of the development.
As part of the reorganization, Shapoorji Pallonji Co. Pvt. Ltd will cease to operate as the holding and operating entity for group companies. The mantle of the holding company will go to S.P. Finance Pvt. Ltd and S.C. Finance Pvt. Ltd, each of which will own a sizable 47.69% stake in Shapoorji Pallonji Co. Pvt. Ltd, the people said, requesting anonymity. (Read here)
Nifty futures on the Singapore Exchange were down 84.50 points at 17,077.50, indicating a tepid start for Indian indices on Monday.
On Friday, the Sensex rose 355.06 points to close at 57,989.90, while the Nifty climbed up 114.40 points to end the day at 17,100.
Shares of Reliance Industries, HDFC, Tata Motors, Adani Enterprises, among others, will be in focus today.
Credit Suisse Group AG told staff that promised bonuses and pay increases will still be paid as the bank seeks to keep “business as usual" after a tumultuous week that ended in a takeover by its fiercest Swiss rival.
There will be no changes to payroll arrangements and bonuses will still be paid on March 24, Credit Suisse said in an internal memo to staff. In many countries, bonuses have already been paid, and the bank doesn’t not expect any changes for remaining jurisdictions, according to the memo. A spokeswoman confirmed the contents of the memo. (Read here)
Asian stocks steadied and U.S futures rose on Monday in relief at a weekend rescue deal for Credit Suisse and a concerted effort from central banks to shore up the mood, though trade was tense and volatile as contagion fears stalked financial shares.
S&P 500 futures rose 0.7% in bumpy trade and bonds fell as investors reckoned less immediate fears of financial instability reduced the likelihood of rate cuts later this year.
Beaten-down bank shares bounced 1% in Tokyo, while the broader Nikkei fell 0.2%. Financials in Australia fell 0.8% and the ASX 200 fell 0.5%.
Over the weekend, UBS said it will buy Credit Suisse for 3 billion francs ($3.2 billion) and assume up to $5.4 billion in losses, in a shotgun merger engineered by Swiss authorities. Central banks including the Fed, the European Central Bank and Bank of Japan pledged to deepen support for liquidity, by increasing the frequency of seven-day dollar-swap operations from weekly to daily.
Wall Street closed lower on Friday, marking the end of a tumultuous week dominated by an unfolding crisis in the banking sector and the gathering storm clouds of possible recession. All three indexes ended the session deep in negative territory, with financial stocks down the most among the major sectors of the S&P 500.
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