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Stocks remained under pressure on Monday over twin risks: a spike in global inflation threatening economic recovery and the swift spread of the new covid-19 variant. Indian shares fell during the day as a surge in global Omicron cases threatened to roil economic recovery, while shares of Future Group companies jumped after the country's antitrust agency suspended its deal with Amazon.com.
Indian equities extended losses on Monday, following a market-wide sell-off, which saw benchmark indices fall over 2% each.
The Sensex fell 1189.73 points or 2.09% to end the session at 55,822.01, and the Nifty was down 371.00 points or 2.18% at 16,614.20.
On the Nifty, BPCL, Tata Steel, Tata Motors, Coal India and IndusInd Bank were among the worst hit, while Cipla, Hindustan Unilever and Dr Reddy's rose the most. All other sectoral indices ended in the red.
The market breadth was negative, with nearly three stocks declining for every one stock that rose on the BSE. The MidCap and SmallCap indices saw declines of nearly 4% each.
TVS Motor Company has today announced the integration of the location technology, what3words into its customer app, TVS Connect. Beginning today, TVS Connect users can share and navigate to any location using three words. The Chennai-based automaker has become the first Indian two-wheeler manufacturer to bring this addressing system to its customers. what3words is a way to identify precise locations. It has divided the world into a grid of 3-metre squares and given each square a unique combination of three random words: a what3words address.
Around 50,000 Micro Small and Middle Enterprises (MSMEs) downed their shutters in the district on Monday to draw the attention of the authorities to the skyrocketing prices of raw materials used in various industries.
Investor sentiment sagged Monday amid rising global omicron infections and turmoil for President Joe Biden’s economic agenda, spurring selloffs in stocks, equity futures and oil, while bolstering sovereign bonds.
Europe’s Stoxx 600 Index dropped more than 2%, while U.S. futures slid at least 1.5% and MSCI Inc.’s gauge of Asia-Pacific equities was set for its worst drop since March. Treasuries led global bonds gains and the dollar held a jump from Friday.
Fresh restrictions in parts of Europe to stem the rapid spread of omicron are rattling investors. Rising cases led the Netherlands to return to lockdown, while U.K. Health Secretary Sajid Javid refused to rule out stronger measures before Christmas. U.S. lockdowns likely won’t be necessary but hospitals may be strained, Biden’s top medical adviser Anthony Fauci said.
Separately, Goldman Sachs Group Inc. economists reduced their U.S. economic growth forecasts after Senator Joe Manchin blindsided the White House on Sunday by rejecting Biden’s roughly $2 trillion tax-and-spending package, leaving Democrats with few options for reviving it.
Investment Rationale:
· Digital transformation business is intact for Wipro: IT service provider’s engagement with its partner network has expanded beyond certifications into setup of co-innovation centers, building industry solutions, ISV partnerships and joint sourcing of deals. These partnerships play a significant role in implementation, rollouts & upgrades, validation and support services. Recent deal trend continues to be robust for Wipro and is reflective of traction in BFSI, Retail & CPG, Manufacturing and BFSI verticals. Wipro will continue to invest in Its digital product, Digital Talent and S&M which is imperative to drive growth. We believe that COVID outbreak will create huge opportunity across geographies for Wipro to post strong organic growth over different verticals.
· Strong sustainable margin gain: Wipro management has taken cost optimization efforts which help them to gain long term sustainable operating margins. There are some tailwinds like better service mix, reducing the marketing spend, lowering travel cost, employee restructuring and improving utilization. We believe gaining the efficiency over business will help them to get more profitability and higher return ratios.
· Healthy deal pipeline improves the visibility: Wipro deal pipeline remained industry leading in Q2 FY22 at $2.1 bn. Wipro won many large transformation deals despite uncertainty and across verticals like BFSI, Communication, manufacturing, Automobile. This healthy deal pipeline will help to improve revenue visibility for FY22E and FY23E
· Strong broad based growth in Q2 FY22: Wipro Ltd (Wipro) delivered an excellent performance on all fronts with revenue at ₹19,667 Cr, up 8.1% QoQ and 30% YoY in CC terms. While operating profit represnted a growth of 30.8% YoY at ₹3,492 Cr, operating margin de-grew by 180 bps and stood at 17.7% QoQ, aided by unfavourable currency mix and wage hikes. Net profit for the quarter reported a growth of 34% YoY as it stood at ₹2,931 Cr. The company’s management gives strong Q3FY22 guidance at 2%-4% revenue growth in CC terms and its commentary continues to be positive in the verticals such as BFSI, Hi-tech Media, Life Sciences, and Communications.
Shares of CE Info Systems or MapmyIndia is going to hit primary market tomorrow as tentative MapmyIndia IPO listing date is 21st December 2021. The public issue worth ₹1,039.61 crore was subscribed 154.71 times in 3-day bidding from 9th December 2021 to 13th December 2021. However, ahead of MapmyIndia IPO share listing date, grey market is giving strong signals. According to market observers, CE Info Systems shares are available at a premium of ₹700 in the grey market today. They said that such a high GMP (grey market premium) after strong subscription status indicates strong debut of MapmyIndia shares at Dalal Street.
Stock prices change every day by market forces. But have you ever wondered about what drives the stock market—that is, what factors affect a stock's price? Why at one point in time do we see the bullish phase and at another bearish one? To put it simply, if more people want to buy a stock than sell it, then the price moves up. Conversely, if more people wanted to sell a stock than buy it, the price would fall.
Nithin Kamath, the chief executive officer of India’s largest online brokerage Zerodha explains what really moves markets?
Japanese shares closed sharply lower on Monday after a rate cut in China's lending benchmark failed to lift investor sentiment while the spread of the Omicron coronavirus variant continues to stoke worries over an economic slowdown worldwide.
Private lender Axis Bank on Monday announced its proposal to raise up to ₹5,000 crore by issuing bonds. In its regulatory filing the bank notified that it proposes to raise funds by issuing senior unsecured taxable redeemable non- convertible debentures worth ₹10 lakh each for cash at par with base issue size of ₹2,000 crore and green-shoe option to retain over-subscription of ₹3,000 crore, aggregating up to ₹5,000 crore.
Shares of Future Group companies on Monday zoomed up to 20% after the Competition Commission suspended its more than two-year-old approval for Amazon's deal with Future Coupons and imposed a ₹202-crore penalty on the e-commerce major.
Cryptocurrencies were peerless conduits of greed and fear in 2021, alternately minting and wiping out fortunes as they swung wildly while adding some $1.5 trillion in overall market value along the way.
Shriram Properties Limited IPO opens at ₹95, which is a discount of 19.5% to its issue price of ₹118. Currently, the company is trading at price to book value of 1.83 times, which is attractive compared to other listing residential developers. We suggest investors to hold the stock if they have received the allotment and investor who has not received the allotment can buy at the current price.
Following weak global cues and rising Omicron crisis, Indian stock market today extended the bear run on Dalal Street. The NSE Nifty crashed 381 points and hit 16,604 levels whereas BSE Sensex nosedived 1250 points and hit 55,761 levels in early morning deals. In this selloff heat, Big Bull Rakesh Jhunjhunwala has lost around ₹230 crore in his two favourite Tata stocks within 10 minutes of market opening. Those two Tata stocks are — Titan Company and Tata Motors.
Investor confidence in Cipla’s earnings strengthened significantly after it announced the approval for Lanreotide depot injection in the US. The stock gained more than 2% in morning trade on Monday.
The product approval that was not earlier anticipated brings an element of positive surprise for investors, said analysts. Also looking at the size of the product, one can expect significant earnings upgrades.
The lows of Friday was a ray of hope but the index has opened with a gap down this morning which cements the validity of a downtrend. The upside for the index is capped for the time being and every rally up can be used to short this market for a target of 16400.
In the wake of raging global Omicron infections threatening to derail economic recovery, shares plummeted to their lowest in nearly four months making investors poorer by ₹11,23,010.78 crore in two days as domestic equity market continued to take severe beating amid a global selloff.
Retail sales grew 9% in November compared to pre-covid (November 2019), but dropped sequentially, according to a pan-India Retail Business Survey by the Retailers Association of India (RAI).
The government has refuted speculations around the delay in the initial public offer (IPO) of Life Insurance Corporation (LIC) and said that it is on course for the IPO in the last quarter of this fiscal. Once listed, LIC is likely to become one of the biggest domestic companies by market capitalisation with an estimated valuation of ₹8-10 lakh crore.
Shriram Properties shares made a weak debut at BSE and NSE today. The realty stock opened at ₹90 per share levels on NSE, which is 23.7 per cent lower from its issue price of ₹113 to ₹118 per equity share. However, the realty stock has shown some recovery post-listing as Shriram Properties share price at NSE is currently trading at 105.70 apiece levels.
The State Bank of India (SBI) has hiked the interest rate on fixed deposits of more than ₹2 crore, effective December 15, 2021. The increased interest rates will apply to new deposits as well as those that are about to mature. SBI has kept the interest rates on FDs under ₹2 crore unchanged. Details here
India's market regulator on Monday asked commodity exchanges not to launch futures contracts of soybean, crude palm oil, wheat, rice, chickpea, green gram, rapeseed and mustard for one year.
Fuel rates have remained steady as petrol and diesel prices have stayed unchanged on Monday across various cities in the country including the national capital Delhi, metro cities Mumbai, Kolkata and Chennai.
Gold prices in India dipped today, extending losses to the second day though the drop was moderate. On MCX, gold futures were down 0.04% to ₹48575 per 10 gram while silver fell 0.45% to ₹61,856 per kg.
In global markets, gold edged higher to regain $1,800 per ounce levels as concerns over the rapidly spreading Omicron coronavirus variant boosted the metal's safe-haven appeal. Asian share markets were lower today as many countries in Europe imposed fresh restrictions.
Shares of Shriram Properties are going to list on NSE and BSE today. While allottees are busy calculating about the listing gain they can expect from the real estate company on its listing date, grey market is signaling marginal listing gain from the public issue. According to market observers, shares of Shriram Properties are available at a premium of ₹15 in grey market on Saturday, which is around 10 per cent higher from upper price band of ₹118 per equity share.
Oil extended declines as the rapid spread of the omicron variant of the virus increased concerns about the outlook for energy demand.
Futures in London fell below $72 a barrel after slipping 2.2% last week. Covid-19 infections are rising from the U.S. to Europe as authorities struggle to tame the spread of omicron. That’s led to some nations placing restrictions on air travel and there are fears that further lockdowns may be implemented, curbing the movement of people and sapping demand for crude and oil products.
Finalisation of Medplus Health share allocation is expected today as tentative Medplus IPO allotment date is 20th December 2021. Those who have applied for the public issue worth ₹1,398.30 crore are advised to check Medplus IPO allotment status online at BSE website or at the website of official registrar of the public offer. The official registrar of the public offer is KFintech Private Limited.
Gold held the first weekly gain since mid-November as investors weighed concerns over the spread of the omicron virus variant against tightening monetary policy.
Lockdowns in the U.S. will likely not be necessary even as Covid-19 cases increase, although many hospitals may be strained, especially in regions with lower levels of vaccination, according to President Joe Biden’s top medical adviser, Anthony Fauci. In other parts of the world, the Netherlands returned to lockdown, while U.K. Health Secretary Sajid Javid refused to rule out stronger measures before Christmas.
Ethnic wear retailer Fabindia will file draft documents for its initial public offering before the end of December to raise up to ₹4,000 crore, two people aware of the development said. The company’s shareholders approved the IPO proposal at an extraordinary general meeting on Saturday.
Shares of Future, Airtel, ITC, Tata Motors, among others, will be in focus today.
U.S. equity futures, most Asian stocks and crude oil fell Monday amid concerns about more curbs to tackle the omicron virus variant and a setback for President Joe Biden’s economic agenda.
MSCI Inc.’s gauge of Asia-Pacific equities was on track to drop for its sixth session in seven. Bond yields dipped, gold edged higher and the dollar held a jump from Friday amid a mood of caution.
Traders were assessing the latest comments from U.S. Senator Joe Manchin, who left Democrats with few options for reviving Biden’s agenda after rejecting the roughly $2 trillion tax-and-spending package.
Fresh lockdowns in parts of Europe to stem the rapid spread of omicron are also unsettling investors and weighing on risk sentiment.
In China, the central bank lowered the one-year loan prime rate for the first time in 20 months while keeping the five-year rate steady. Chinese shares fluctuated. Calls for easing had grown amid a property sector crackdown that’s weighing on economic expansion.
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