PremiumUS and European equity futures fell Wednesday while Asian stocks eked out small gains amid downbeat investor sentiment following mixed corporate earnings.
Indian indices slumped on Wednesday, led by losses in banks and financials.
Global shares were mixed Wednesday after Wall Street indexes finished little changed as investors awaited earnings results from major global companies.
Back home, Sensex fell 773.69 points to the end the day at 60,205.06, and the Nifty was down 226.30 points at 17,892.
On the Nifty, Adani Ports, SBI, IndusInd Bank, HDFC Bank and Cipla were among the worst hit, Hindalco Industries, Maruti Suzuki, Bajaj Auto, HUL and Tata Steel rose the most.
The BSE midcap index fell 1.5% and smallcap index shed 0.8%.
Happiest Minds Technologies announced signing of definitive agreements to acquire 100% of SMI - a Madurai headquartered, profitable, IT services company through a combination of upfront and deferred equity consideration totaling ₹111 crore.
With 400+ offshore-based employees, SMI has an annual run rate in revenues of circa $9 million.
Well-known US activist investor Hindenburg Research has alleged that Adani Group was "engaged in a brazen stock manipulation and accounting fraud", a charge the conglomerate described as malicious, unsubstantiated, one-sided, and having done with malafide intention to ruin its share-sale.
Hindenburg, a US-based investment research firm that specialises in activist short-selling, said its two-year investigation reveals that "the ₹17.8 trillion (USD 218 billion) Indian conglomerate Adani Group has engaged in a brazen stock manipulation and accounting fraud scheme over the course of decades."
The report comes ahead of a ₹20,000 crore follow-on share sale of Adani Group's flagship Adani Enterprises. Group representatives said a statement in response would be issued later.
The follow-on public offer (FPO) is slated to open on January 27 and close on January 31.
Adani Group said it was shocked to see the report that came out without any attempt to contact it to get the factual matrix.
"The report is a malicious combination of selective misinformation and stale, baseless and discredited allegations that have been tested and rejected by India's highest courts," the ports-to-energy conglomerate said in a statement.
Microsoft Corp said on Wednesday it was investigating an issue impacting multiple services including Teams and Outlook, with outage reports saying the platforms were down for thousands of users globally.
Microsoft did not disclose the number of users affected by the disruption, but data from outage tracking website Downdetector showed more than 3,900 incidents in India and over 900 in Japan. Outage reports also spiked in Australia, Britain and the United Arab Emirates.
The Downdetector site tracks outages by collating status reports from sources including user-submitted errors on its platform.
Tycoon Sajjan Jindal-controlled JSW Steel Ltd. plans to take advantage of lower rupee borrowing costs to refinance its offshore borrowings, as it pushes to increase capacity with a $6 billion capital expenditure plan.
The rupee loan market is looking “attractive" for India’s largest steel company by market value, said Seshagiri Rao, joint managing director and group chief financial officer. The firm’s proportion of rupee debt will grow to half its 700 billion rupees ($8.6 billion) of borrowings over the next year, from about 45% at the end of December, he said.
JSW Steel’s plans underline a trend for Asian companies to favor local issuance due to unfavorable exchange rates and a rapid rise in US borrowing costs. Overseas debt sales in dollars, euros and yen by entities in Asia outside Japan plummeted more than 50% last year, Bloomberg-compiled data show. (Read here)
For TVS Motors, 2W off-take turned tepid in the quarter. Management talked of a gradual recovery in rural markets and, finance penetration having improved, augurs well for a recovery. Semi-conductor shortages have begun normalising and we expect demand for premium motor-cycles and scooters to improve. iQube volumes have substantially improved since its introduction and would further improve as the company plans to penetrate into tier-3 and 4 markets.
Valuation: We expect a 20% revenue CAGR over FY23-25, and 26% earnings growth, leading to an EPS of Rs44.9. We maintain our Buy rating with a revised TP of Rs1,350 (26x FY25e), incl. Rs54 a share for TVS Credit Services.
Middle Eastern investors including International Holding Co PJSC and Abu Dhabi Investment Authority are bidding to buy stock in the $2.5 billion follow-on share sale floated by Indian billionaire Gautam Adani’s flagship, according to people familiar with the matter.
Mubadala Investment Co PJSC, BNP Paribas SA have also bid, the people said, asking not to be identified as the details aren’t public. The so-called anchor book for Adani Enterprises Ltd. was oversubscribed by 1.8-2 times, the people added.
Hindenburg Research said on Wednesday it held short positions in India's Adani Group, accusing the conglomerate of improper extensive use of entities set up in offshore tax havens and expressing concern about high debt levels.
The report, which comes days ahead of a $2.5 billion share offering by flagship firm Adani Enterprises, sent shares in Adani group firms sliding.
Hindenburg, a well known U.S. short-seller, said key listed companies in the group controlled by billionaire Gautam Adani had "substantial debt" which has put the entire group on a "precarious financial footing".
It also said that seven Adani listed companies have an 85% downside on a fundamental basis due to what it called "sky-high valuations".
Indian stocks hit an over-one-week low in volatile trading on Wednesday, ahead of the monthly expiry of derivatives and the federal budget.
Nifty's volatility index climbed as much as 8.5% to 14.815 after hovering around the 14 mark for over a month.
Stocks of Adani group companies fell between 2% and 7% after short-seller Hindenburg Research said it holds short positions in those firms through U.S.-traded bonds and non-Indian-traded derivative instruments.
India has invited Pakistan's foreign minister to a meeting of the Shanghai Co-operation Organisation (SCO) that it is hosting in May, according to media reports on Wednesday, signalling a possible thaw in relations between the nuclear-armed rivals.
The invitation came days after Pakistani Prime Minister Shahbaz Sharif called for talks with India over all outstanding issues, including the disputed Kashmir region.
The rupee rose by 20 paise to 81.50 against the US currency in morning trade on Wednesday following a weak dollar in the global markets.
Early losses in domestic stock markets and a rebound in oil prices, however, restricted the rupee's gains.
At the interbank foreign exchange, the rupee opened higher at 81.62 and rose further to a high of 81.49 in morning trade.
The rupee was trading at 81.50 to a dollar at 0950 hrs. The local currency had closed lower at 81.70 on Tuesday.
On Tuesday, Nifty had opened gap up tracking global cues and made an intraday high of 18201. It failed to sustain the mark and pared all its gains closing near the previous day’s close. The index continues to trade above the median of the Bollinger band (BB) trading near 18047 with attempts to take out prior highs but has failed to close above the prior closing. The index also has its point of control line at 18038 levels which indicates positive accumulation. The index is anticipated to attract bullish momentum on closing above 18260 and provided it sustains above the BB median
The markets are likely to see gap down opening; SGX Nifty is down 22 points compared to previous spot Nifty closing. Asian Markets are trading in green; Nikkei is up 0.1% while Hang Seng is closed for Chinese new year.
The earnings season is in full swing and markets are closely following the management commentary. So far, the 3QFY23 results suggest increased revenue growth with some pressure on the margin front. The US December macroeconomic data were dismal, pointing to a slowdown for the world's largest economy. Meanwhile, the RBI has mentioned that while some economies adapted and coped with the difficult situation in 2022, the biggest risk in 2023 will be the US monetary policy and the trajectory of the US dollar. In the run-up to the Union Budget 2023, sector and stock-specific movements are expected to hit the markets in the coming weeks.
TVS Motor Co. aims to double its electric two-wheeler sales by March and launch a range of new products, from 5kWh to 25kWh, to expand its iQube line within the next 12-18 months, a senior executive said.
“We are significantly growing our EV (electric vehicle) volumes. We are doubling our electric scooter sales every quarter and will continue this momentum in the fourth quarter, too. We will cross more than 100,000 units in sales by the end of this fiscal," K.N. Radhakrishnan, director and chief executive, told analysts in a post-earnings conference call on Tuesday.
Crude oil prices rebounded on Wednesday as demand recovery hopes in top importer China following its exit from COVID-19 pandemic curbs provided support after prices dropped in the previous session on concerns about global economic growth.
Brent crude futures gained 59 cents to $86.72 per barrel, after falling 2.3% in the previous session. U.S. West Texas Intermediate (WTI) crude futures rose 46 cents to $80.59 per barrel, having dropped 1.8% on Tuesday.
Digital insurance provider Acko General Insurance is close to raising $100 million to $150 million (around ₹820-1,200 crore) from new and existing investors, two people aware of the development said.
After lengthy discussions on valuation, existing investors Canada Pension Plan Investment Board (CPPIB), General Atlantic (GA) and Multiples Private Equity agreed to bring in more capital in a likely Series E round, the people cited above said seeking anonymity. (Full story here)
Shares of Bharti Airtel, TVS Motor, Tata Motors, Jet Airways, among others, will be in focus today.
Tata Motors, Bajaj Auto, Dr Reddy's Laboratories, Cipla, Amara Raja Batteries, Ceat, DLF, Embassy Office Parks REIT, Equitas Holdings, Indraprastha Gas, Tata Elxsi, TeamLease Services, Torrent Pharma are among the companies scheduled to announce their quarterly earnings today
Nifty futures on the Singapore Exchange was down 43 points, or 0.24%, at 18,091.00, hinting at a weak start for Indian indices.
On Tuesday, benchmark Sensex trimmed gains to close marginally higher while Nifty settled flat in choppy trade on Tuesday as gains in auto shares were offset by selling pressure in banking and energy shares.
Asian stocks struggled to find traction on Wednesday while US and European equity futures slumped as a downbeat revenue forecast from Microsoft Corp. added to risk aversion in global markets.
Contracts for the Nasdaq 100 dropped about 0.7%, following a slight decline in the underlying index on Tuesday. Futures for the S&P 500 also fell, as did those for the Euro Stoxx 50. Japan’s Topix index fluctuated and Australian shares erased early gains as inflation data soured sentiment.
South Korea’s Kospi index surged 1.5% in a catchup move after Lunar New Year holidays. Hong Kong and mainland China markets remain closed.
Overnight on the Wall Street, the Dow Jones Industrial Average finished up 0.3% but the broad-based S&P 500 slipped 0.1% and the tech-rich Nasdaq Composite Index dropped 0.3%.
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