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PremiumElsewhere, investors continue to monitor commentary from Fed officials for clues on the likely path of monetary tightening. Fed Governor Michelle Bowman suggested that a half percentage-point increase in interest rates could be on the table next month if incoming readings on inflation come in too high
Indian equities logged in a fifth straight day of losses, in line with global peers. Stocks tumbled and oil surged as tensions between Russia and Ukraine escalated after Moscow ordered troops into two breakaway regions in eastern Ukraine. European markets fell, Dow futures dropped nearly 500 points, Hong Kong shares log worst slump in five months and Japan's Nikkei share average tumbled more than 2%.
The United States and its European allies are poised to announce new sanctions against Russia after President Vladimir Putin formally recognised the two regions in eastern Ukraine, escalating a security crisis on the continent.
Back home, the Sensex fell 382.91 points to end the day at 57,300.68, while Nifty shed 114.50 points or 0.67% at close at 17,092.20.
On the Nifty, Tata Steel, TCS, BPCL, Tata Motors and SBI Life Insurance were worst hit while M&M, Bajaj Finserv, Eicher Motors, Hindalco Industries and ONGC rose.
All sectoral indices ended lower, with IT, metal, oil & gas, capital goods, FMCG, realty and PSU bank indices down 1-2%. Broader markets also ended in the red.
After two summers battered by successive waves of covid, makers of air-conditioners, fans, coolers and refrigerators are preparing for high demand this year, as omicron cases in the country continue to subside.
Companies operating in the sector expect sales to rise 20-30% from 2019 levels, even as they are wary of commodity inflation and price hikes. (Read here)
The IT ministry has come out with a draft policy that proposes a framework for government-to-government data sharing and moots that all data for every government department or its organisation shall be open and sharable by default, with certain riders.
The draft 'India Data Accessibility and Use Policy' -- circulated for public consultation -- will be applicable to all data and information created, generated and collected by the government directly or through ministries, departments and authorised agencies. The policy aims to "radically transform" India's ability to harness public sector data for large scale social transformation.
All data for every government ministry, department and organisation will be open and sharable by default, with certain exceptions, according to the draft policy that outlines an institutional framework entailing 'India Data Office', India Data Council, and Data Management Units as key components
ITI Mutual Fund has launched ITI Conservative Hybrid Fund, an open-ended hybrid scheme that will invest into an array of high-quality debt Instruments and also into leading Nifty50 index stocks.
As per the fund house, the scheme will have higher flexibility as it adjusts debt and equity allocation based on the prevailing market scenario, with active debt management and passive equity management aiming for consistent returns
The new fund offer (NFO) for ITI Conservative Hybrid Fund opened on 21 February and will close on 7 March. The scheme will be jointly managed by Vikrant Mehta and Pradeep Gokhale.
The minimum investment during the NFO period is ₹5,000 and in the multiples of Re 1, thereafter.
European shares hit a seven-month low in early trade on Tuesday, as the prospect of economic sanctions against Russia, which has ordered troops into breakaway parts of eastern Ukraine, rattled investors.
The pan-European STOXX 600 index fell 1.7%, entering its fourth straight session of losses. The benchmark is down nearly 10% from its all-time high in early January.
The German DAX, seen as more vulnerable than other regional indices due to the country's heavy reliance on Russian gas supplies and the lack of energy companies on the index, was hit the hardest, dropping 2.2%.
Gold hit a near nine-month high on Tuesday, as the situation in Eastern Europe intensified after Russia ordered troops into breakaway regions of eastern Ukraine, supporting demand for safe-haven bullion.
Spot gold was up 0.2% at $1,909.33 per ounce, after scaling its highest since June 1 at $1,913.89 per ounce earlier. U.S. gold futures GCv1 gained 0.7% to $1,913.80.
"With the situation deteriorating seemingly by the day in Eastern Europe, there is very little reason to be negative on gold at the moment," said Jeffrey Halley, a senior market analyst at OANDA.
European Union foreign ministers will adopt sanctions Tuesday against Russia over its recognition of Ukrainian separatist regions and further deployment of troops on its neighbour's territory, the bloc's foreign policy chief Josep Borrell said.
"Of course our response will be in the form of sanctions, whose extent the ministers will decide... I'm sure there will be a unanimous decision" required for the measures, Borrell told reporters in Paris, adding that he expected the move "this afternoon".
Indian food delivery company Swiggy, which is backed by SoftBank Group, has started preparations to raise at least $800 million in an IPO early next year, the Nikkei reported on Tuesday, citing people familiar with the matter.
Raw material headwinds persist; await better entry points
Nestle India (NEST) reported Revenues for Q4CY21 in-line with our estimates;EBITDA & PAT were however a miss. Clear signs of pressure have been noted on Gross Margins owing to inflationary RM. Reported Revenue grew 8.4% yoy at Rs. 3,706Cr ~1.6% below our estimate of Rs. 3,767Cr. Q4 volume growth was at ~5% & and ~3.4% price/ mix-led growth. Domestic sales reported 9.2% growth driven by ~7%/3% volume/price/mix led growth as per our estimates. Exports which formed ~4% of revenues reported a 6.6% de-growth yoy mainly due to lower coffee exports and change in product mix. EBITDA of Rs. 851Cr (our estimate Rs. 942Cr) was up 12.4% yoy. However, EBITDA Margin at 23% was lower qoq due to higher operating expenses. Increase in fuel prices (packaging costs and transport costs), wheat, coffee and edible oil remained a concern. Gross Margins stood at 56.6% & contracted by 226bps owing to RM headwinds.
Management indicated RM headwinds are persisting across agri and non-agri products. PAT came in at Rs. 387Cr (our estimate of Rs. 623Cr), down 20% YoY & 38% QoQ due to extraordinary expense of ₹236cr related to an amendment in Pension Plan of the Company (one-off case). As per management commentary, key products like Toddler range, Nescafe Classic, Milkmaid, KITKAT, MILKYBAR and MUNCH posted strong double-digit growth, while Maggi Noodles and Masala-ae-magic maintained strong momentum despite high base. Sauces posted muted growth (decline in home consumption, high base and increase in competitive activity).
OOH channels which was impacted by COVID Wave 2 & 3, was mitigated through building and scaling up opportunities, coupled with channel led initiatives (Focus on delivery / Cloud kitchen) to bounce back faster. Sanand factory (ninth plant for Nestle) is now fully operational with 62% of workforce comprising of women. E-com continues to gain traction & Organised trade is witnessing resurgence & good revenue growth. However, in light of emerging RM headwinds (packaging material, wheat, edible oil, coffee) and modest Q4 performance, we Maintain HOLD with unchanged TP of Rs. 18,600 as at CMP the risk[1]reward is unfavourable even as the long term growth trajectory appears fair (20+ projects in pipeline)
API Holdings, the parent of e-pharmacy firm PharmEasy, on Monday said it has received approval from the Securities and Exchange Board of India (Sebi) to raise ₹6,250 crore through an initial public offering (IPO).
The SEBI approval comes amid rumors that PharmEasy may delay its IPO in the wake of market volatility that have been brutal to the shares of new age companies that got listed last year.
API Holdings had filed its draft red herring prospectus (DRHP) with Sebi in November last year on the back of a slew of IPOs and listings of new-age companies such as Zomato, PolicyBazaar and Paytm.
Crypto asset funds saw net inflows totaling $109 million last week (12-18 February) despite recent price weakness and perceived negative impact from the looming conflict in Eastern Europe, according to a report by digital asset manager CoinShares.
Following the run of outflows during January, the latest data marks the fifth straight week of inflows.
The crypto market has been impacted by the Russia-Ukraine crisis. Bitcoin is down over 16% on a fortnight basis, while ethereum is down more than 20%. Russia's aggression towards Ukraine has prompted the US and Europe to vow sanctions, further casting a shadow over global markets.
As per the digital asset manager, while inflows were seen in both Europe and the Americas, it was predominantly the latter with net inflows totaling $101 million.
The United States and its European allies are poised to announce harsh new sanctions against Russia on Tuesday after President Vladimir Putin formally recognised two breakaway regions in eastern Ukraine, escalating a security crisis on the continent.
Putin's announcement on Monday drew international condemnation and immediate U.S. sanctions, with President Joe Biden signing an executive order to halt U.S. business activity in the breakaway regions and ban imports of all goods from those areas controlled by Russian-backed separatists.
Britain, France and Germany also agreed to respond with sanctions, with Britain and the United States saying they would announce further measures on Tuesday.
"The United States will impose sanctions on Russia for this clear violation of international law and Ukraine sovereignty and territorial integrity," Linda Thomas-Greenfield, U.S. ambassador to the United Nations, told reporters after an emergency meeting of the Security Council late on Monday.
Aditya Birla Fashion and Retail Limited (ABFRL) on Tuesday announced its collaboration with consulting firm Accenture for a digital transformation programme that will help the fashion retailer drive growth and improve operational efficiency.
As part of its digital transformation strategy, ABFRL has chosen Accenture to design, develop, and deploy an enterprise resource planning (ERP) system.
"The new ERP system will support ABFRL which owns brands such as Louis Philippe, Van Heusen, Allen Solly and Peter England across stores in India to efficiently manage multiple fulfilment channels and consolidate disparate technology systems. It will be designed to enhance customer service by combining ABFRL’s manufacturing and retail functions into a digital core using SAP S/4HANA for fashion and vertical business," it said in a statement.
Volatility in markets because of geopolitical issues linked to Russia and Ukraine should not last long. Chances of a major flare-up look small while sanctions on Russia are expected not to be as strong as the ones against Iran, as no one wants crude prices to stay at elevated levels on the back of already high inflation. Markets below 17000 offer a good risk-reward tradeoff. One should use this correction to gradually increase equity exposure by investing in quality companies.
India’s central bank plans to sell dollars to banks and take out rupee liquidity via a forex swap, a move that will help the monetary authority manage liquidity in the banking system ahead of the country’s biggest share sale.
The Reserve Bank of India will enter into sell-buy swaps worth $5 billion with banks on March 8 to elongate the maturity profile of its forward dollar book, it said in a statement late Monday after the close of markets. The step comes ahead of the Life Insurance Corp. of India initial share sale due in March, which is expected to bring in major foreign inflows.
The move pushed the dollar/rupee one-year forward premium higher by 28 basis points to 4.37%. The rupee fell 0.4% against the dollar along with most other emerging Asian currencies, weighed down by surging crude prices on Ukraine tensions.
Corporate performance (ex-financials) for October-December 2021 (Q3FY22) came in encouraging with topline growing 13% QoQ. On the operating profit front, sequential growth was at 12% amid ~20 bps decline in operating margins to 17.6% on the back of higher RM costs (up 220 bps QoQ) partially mitigated by operating leverage benefits (employee costs and other expenses down ~100 bps each). On the PAT front, earnings were up 7.3% QoQ, constrained by lower other income and higher effective tax rate (27.5% in Q3FY22 vs. 23.2% in Q2FY22). On a YoY basis, topline, bottomline growth at the index level was healthy at ~30%+ tracking commodity prices led outperformance in the metals and oil & gas space as well as healthy high double digit growth witnessed in the IT & FMCG domain. With governmental thrust on infrastructure (capex outlay for FY23E up 35% YoY), private capex cycle revival and healthy job creation, the management commentary was optimistic of a strong rebound in FY23E
At the Nifty level (including financials), broader trend continued i.e. lower double digit QoQ growth in sales & high single digit growth in PAT. PAT was a tad higher (at 8.8% QoQ) than ex-financials data shared above (7.3% QoQ) due to better performance by corporate banks
On the sectoral front, in the BFSI space, asset quality improved sequentially as lower slippages and better recoveries helped overall performance. GNPA ratio for banks in our coverage declined in the range of 30-150 bps with overall decline of 45 bps QoQ to ~5%. Restructured book also declined by an average of 25 bps QoQ, thus indicating overall reduction in stress. IT companies continued their growth momentum in Q3 where the company reported strong growth in revenues in CC terms. Tier I companies reported average constant currency growth of 20.2% on a YoY basis. For Tier II companies, the growth was even stronger at an average of 26.6% on a YoY basis
Going forward, revisiting our index earnings estimates, we expect Nifty EPS to grow at 21.5% CAGR in FY21-24E. Hence, we value Nifty at 20,000 i.e. 23x P/E on FY23E-24E average EPS of | 870/share. Corresponding Sensex target is at 66,600, offering healthy double-digit upside.
India's fuel demand is likely to grow 5.5% in the next fiscal year beginning April 1, initial government estimates show, reflecting a pick-up in industrial activity and mobility in Asia's third largest economy after months of stagnation.
India's fuel consumption in 2022-23, a proxy for oil demand, could rise to 214.5 million tonnes from the revised estimates of 203.3 million tonnes for the current fiscal year ending March 2022, according to government forecasts.
The estimates were released on the website of the Petroleum Planning and Analysis Cell (PPAC), a unit of the federal oil ministry.
Local demand for gasoline, used mainly in passenger vehicles, is expected to rise by 7.8% to 33.3 million tonnes, while gasoil consumption was slated grow by about 4% to 79.3 million tonnes, the data showed.
BharatPe co-founder and managing director Ashneer Grover has filed an arbitration plea with the Singapore International Arbitration Centre (SIAC) claiming the company’s investigation against him is illegal, a person directly aware of the matter said.
Mint has also reviewed excerpts of his arbitration plea.
“Ashneer’s point is, the Alvarez & Marsal report and preliminary investigation is invalid because it was in violation of shareholder agreement and articles of association. His argument is that the company has no authority to conduct such an investigation," the person cited above said, requesting anonymity. (Read here)
Bitcoin dropped to a more than two-week low, tumbling along with equities as escalating tensions between Russia and Ukraine weighed on risk appetite.
The largest cryptocurrency dropped as low as $36,831 on Tuesday morning in Asia after Russian President Vladimir Putin said he’s recognizing two self-proclaimed separatist republics in eastern Ukraine.
Bitcoin dipped below $40,000 level over the weekend and kept weakening as the Ukraine crisis deepened, undermining the argument that cryptocurrencies are a haven in times of geopolitical turmoil. At the same time, gold has reached its highest level since June.
Indiabulls Real Estate Ltd. on Monday clarified that the Enforcement Directorate (ED) has sought some information from Indiabulls Housing Finance Limited regarding certain of their clients, it is not related to Indiabulls Real Estate Limited. ED has not asked for any information from Indiabulls Real Estate Limited.
As of now the merger between Indiabulls Real Estate Limited and Embassy is pending and Embassy is currently in process of merging its own companies after that merger with Indiabulls Real Estate Limited will be done. The company has also clarified that the day to day operations of Indiabulls Real Estate Limited is managed professionally by its management team and Board of Directors.
Mr Sameer Gehlaut (earlier promoter of Indiabulls Real Estate) has resigned from the office of non-executive director and Chairman of the Company effective from 31st December 2021 and he collectively holds 0.26% of the company.
This is a piece of positive news for Indiabulls Real Estate Limited, the stock has corrected yesterday due to Enforcement Directorate (ED) news, today stock was up by 4%. We have a neutral view on Indiabulls Real Estate Limited.
"As expected the Nifty has fallen over 300 points post the breaking of the 17200 support level. Traders can book profits on their short positions here as we are at the lower end of the current range which is 16800. If we break that, a new opportunity to go short emerges. On the upside, the resistance is at 17200-17250."
The United States is coordinating with allies and will announce new sanctions against Russia on Tuesday after Moscow recognized two breakaway regions of Ukraine as independent and sent "peacekeeping" forces there, U.S. officials said on Monday.
"Tomorrow, the United States will impose sanctions on Russia for this clear violation of international law and Ukraine sovereignty and territorial integrity," U.S. Ambassador to the United Nations, Linda Thomas-Greenfield, told reporters after a U.N. Security Council meeting on Monday evening.
"We can, will, and must stand united in our calls for Russia to withdraw its forces, return to the diplomatic table and work toward peace."
Russian President Vladimir Putin on Monday recognized two breakaway regions of Ukraine as independent and told Russia's defense ministry to deploy troops into the two regions to "keep the peace," heightening tension with the West over Ukraine.
Russian President Vladimir Putin ordered the deployment of troops to two breakaway regions in eastern Ukraine after recognising them as independent on Monday, accelerating a crisis the West fears could unleash a major war.
A Reuters witness saw tanks and other military hardware moving through the separatist-controlled city of Donetsk after Putin formally recognised the breakaway regions and ordered the deployment of Russian forces to "keep the peace".
About five tanks were seen in a column on the edge of Donetsk and two more in another part of town, a Reuters reporter said. No insignia were visible on the vehicles.
Putin's announcement drew international condemnation and immediate U.S. sanctions to halt U.S. business activity in the breakaway regions and ban import of all goods from those areas.
The measures were separate from sanctions the United States and its allies had prepared if Russia launched a full-scale invasion of Ukraine, White House spokesperson Jen Psaki said.
The deployment of what Russia called a peacekeeping operation in eastern Ukraine is "nonsense" and Moscow's recognition of the breakaway regions as independent is part of its pretext for war, the United States told the U.N. Security Council on Monday.
The consequences of Russia's actions "will be dire - across Ukraine, across Europe, and across the globe," U.S. Ambassador to the United Nations, Linda Thomas-Greenfield, told the emergency meeting of the 15-member council.
Tensions between Moscow and Western capitals are high following weeks of United States accusations that Russia has deployed up to 150,000 troops near Ukraine's borders for an invasion. Russia has denied it wants to invade Ukraine and accuses the West of hysteria.
Japan's Nikkei share average tumbled more than 2% on Tuesday, extending losses to a fourth session, as sentiment soured further following an escalation in tensions around Ukraine.
The Nikkei slid 2.17% to 26,327.90 by the midday break. The broader Topix slumped 1.76% to 1,877.01, also heading for a fourth straight session of losses.
MSCI ASIA ex-Japan index also extended fall and was down over 2%.
Russian envoy to the United Nations Vasily Nebenzya has said Moscow remains "open to diplomacy" but stressed the need to defend separatist areas from what he dubbed Ukrainian aggession.
"We remain open to diplomacy for a diplomatic solution," he said during an emergency UN Security Council meeting. "However, allowing a new bloodbath in the Donbass is something we do not intend to do."
The emergency session followed Vladimir Putin's order for Russian troops to deploy to the breakaway regions, a move roundly decried during the meeting by the United States and allies.
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