PremiumAsian stock markets tumbled by unusually wide margins Thursday after the Federal Reserve indicated it plans to start raising interest rates soon to cool inflation. Tokyo's market benchmark fell more than 3%. Hong Kong and Seoul lost more than 2%. Wall Street's benchmark S&P 500 index lost 0.1% on Wednesday after a Fed statement said the U.S. central bank “expects it will soon be appropriate" to raise rates. Indian indexes suffered deep losses over the past week, erasing all the gains clocked this year, after prospects of tighter monetary policy and tensions between the West and Russia over Ukraine triggered a sell-off.
The benchmark Sensex ended at 57,276.94 points, which is 581 points or 1 per cent lower from its previous day's close. Earlier the Sensex opened in the red at 57,317.38 points and tumbled to a low of 56,674.51 points in the morning trade. The Sensex gyrated between a high of 57,508.61 and a low of 56,439.36.
The broader Nifty 50 of the National Stock Exchange tumbled 0.97 per cent or 167.80 points to 17,110.15 points against its previous session's close. The Nifty opened in the red at 17,062.00 points and slumped to a low of 16,927.85 points in the morning trade.
There was across the board selling pressure. Only nine of the 30 scrips that are part of the Sensex were in the positive. Axis Bank rose 2.81 per cent to ₹773.10. SBI rose 2.75% to ₹529 and Mauruti rose 2.52% to ₹8817.25. Other gainers included Kotak Bank, Sun Pharma, and IndusInd Bank.
HCL Tech was the bigggest loser. It was 4.17 per cent down at ₹1077.90. Tech Mahindra lost 3.65 percent to reach ₹1445.65. Wipro, TCS, Titanm, and Infosys were among other big losers on the day.
On the Nifty, 15 stocks advanced while 35 declined. Among broad market indices, banks and auto gained while IT, metal, pharma and most other stocks dragged.
State-run power giant NTPC's arm, NTPC Renewable Energy Ltd (NREL), has invited bids for the selection of developers for inter-state transmission system (ISTS)-connected energy storage facility of 3,000 MW capacity at any location in India to meet the round-the-clock requirement of renewable energy.
One97 Communications Limited, which owns the brand Paytm, India’s leading digital payments and financial services platform, today announced that its wholly-owned subsidiary Paytm Money has introduced India’s first intelligent messenger, revolutionizing the way users invest and track markets.
The fall in the Indian markets is in line with global markets. The markets were eagerly awaiting the outcome of the US Federal Reserve meeting on Monetary Policy which was held on 25th and 26thJanuary, 2022. The Federal Reserve has indicated that they will begin hiking interest rates in the near future and that there will be multiple rate hikes this year. Along with that the Fed has also stated that they will end the asset purchase program in March and will also look to reduce the size of the Fed Balance Sheet from sometime later this year. The combination of these measures is what has spooked markets globally as it would mean moving from a scenario of easy and excess liquidity to a scenario of liquidity tightening. As stated earlier, we expect 2022 to be a much more challenging year from a returns perspective as compared to 2021. We suggest investors stick to their asset allocation and invest in high quality companies and also pay close attention to valuations.
Mahindra Electric Mobility Ltd, part of the Mahindra Group, has today launched of its new electric 3-wheeler, the e Alfa Cargo. The e Alfa Cargo is priced at ₹ 1.44 lakh (ex-showroom Delhi). An e Alfa Cargo owner can save up to ₹ 60 000.00 per year in fuel costs when compared with a diesel cargo 3-wheeler, says Mahindra.
Bank Nifty has seen a decrease in Open Interest of -46.01% with a decrease in the price of -0.68% indicating Long Unwinding. The sizable unwinding in the OI is due to January Expiry scheduled today.
Nifty has seen a decrease in Open Interest of -40.13% with a decrease in the price of -2.92% indicating Long Unwinding. The sizable unwinding in the OI is due to January Expiry scheduled today.
Option data indicates a probable trading range of Bank Nifty for the day between 38,500 to 37,000 & that for NIfty at 17,000 to 17,500.
BANK NIFTY Strategy: Call Spread
View: Moderately Bullish.
Rationale: - Traders could initiate this spread strategy to make modest returns with limited risk and reward. The spread suggested consists of buying one lot of 37,800 strike CALL Option and simultaneously selling one lot of 38,300 strike CALL Option.
*Strategy for Week 03rd February 2022 Expiry
One of the Big Bull-owned banks, Canara Bank has reported strong Q3 numbers. The PSU bank has reported 115 per cent year-on-year (YoY) jump in its net profit from ₹6.96 billion to ₹15.02 billion. This sharp rise in net profit of Canara Bank could become possible as the banks provisioning in this period has come down from ₹42.10 billion to ₹22.45 billion in Q3FY22.
Beat On EBITDA; Growth Outlook Remains Strong
Maruti Suzuki India Ltd’s (MSIL) performance came in ahead of our expectations on the margin front, driven by operating leverage benefits, lower sales promotion, and price hikes.
Improvement in the average realization by 14% YoY helped MSIL report flat revenue growth despite a decline in volume by 13.2%. MSIL’s Q3FY22 revenue stood at ₹23,246 Cr (Our estimate – ₹23,428 Cr). Reported EBITDA came in at ₹1,559 Cr (our estimate – ₹1,350 Cr), a 30% YoY decline ( ₹2,226 Cr in Q3FY21). The company reported an EBITDA margin of 6.7%, a 278bps YoY contraction (our estimate – 5.8%). The beat on margins was on account of operating leverage benefits, favourable product mix, lower promotion & advertisement expenses, and price hikes. MSIL reported PAT of ₹1,011 Cr (Our estimate – ₹957 Cr), a de-growth of 48% YoY. With low inventory and a large order book, we expect MSIL to come back strongly in terms of profitability along with volume recovery. Going forward, we expect the company’s margins to be supported by strong demand, softening commodity inflation, and improving chip shortage. We expect a recovery in both market share and margins in FY23, led by a favourable product lifecycle, operating leverage, and mix as well as price action/cost-cutting.
We maintain our BUY rating on the stock and revise our TP upwards to ₹9,800/share (from ₹8,500 earlier) and value the stock at 27x its FY24E EPS. TP implies an upside of 14% from the CMP.
Telecom major Bharti Airtel on Thursday informed that its subsidiary Airtel Africa has been made a part of the FTSE 100 Index with effect from Monday, 31 January, 2022.
Software company Mastek had a slow Q3 with revenue up just 2.2% on a sequential basis (3.7% in cc terms), and 22% year-on-year (YoY) but improvements were seen in deal flow from UK healthcare and in the broader order backlog, which was up 32% YoY, as per brokerage house Anand Rathi.
A consortium of lenders led by State Bank of India (SBI) has agreed to provide loans to Tata Group for the smooth operations of loss-making Air India.
Tata Group, which won the bid to acquire the national carrier along with Air India Express and 50 per cent stake in AISATS in October last year, is expected to formally takeover the airline on Thursday.
Ace investor Ashish Kacholia's name has appeared in Bharat Bijlee shareholding pattern for October to December 2021 quarter. |For information to those retail investors who scan Ashish Kacholia portfolio stocks for value picks, Bharat Bijlee is one of the multibagger stocks in India. The stock has delivered around 130 per cent return to its shareholders in last one year. As per the shareholding pattern of the company for Q3FY22, Ashish Kacholia has bought 1.55 per cent stake in the motors and generators company.
Oil fell from a seven-year high after the U.S. Federal Reserve signaled that it would soon start raising interest rates to quell inflation, denting investors’ appetite for risk assets including commodities.
Federal Bank’s (FB) 9MFY22 / Q3FY22 earnings reflect management ability to bring in much needed stability and sustainability in the bank’s financial performance despite covid-related challenges – for the third straight quarter. FB’s credit cost, incremental stressed asset formation, growth and profitability remained well within the guided range. Incremental stressed asset formation (net NPA + std. restructured book + net SR) remained flat QoQ at 2.61% vs 2.62% in Q2FY22. Gross slippage ratio was at ~1.2% (annualised) taking 9MFY22 cumulative slippages to Rs14bn vs the full-year guidance of Rs18bn-20bn. We see this as evidence of FB’s strong asset franchise and business resiliency. Loan growth, up 5% QoQ, is on track to end FY22 within the guided range of doubledigit growth. Improved credit deployment (C/D ratio expanded 4% during 9MFY22), higher growth in retail products and contained slippages led to steady improvement in NIMs (3.27%) during past 3 quarters.
Given improving visibility on FB sustaining >1% RoA in FY23E/FY24E, we maintain BUY on the stock. We are not yet factoring-in value unlocking from any of its subsidiaries.
Amid Indian benchmark indices facing huge selloff pressure for more than a week, a good number of quality stocks have either hit or trading near to its 52-week high. Aurobindo Pharma, HDFC AMC, Castrol India, LIC Housing Finance and SBI Cards and Payments Services are some of them. These high-quality stocks have dropped to its 52-week low, which might be a luring option for those positional investors to buy quality stocks at discounted price.
India's Imagine Marketing, which own the BoAt brand of Earphones and Smartwatches, has filed for initial public offering (IPO) of up to 20 billion rupees ( ₹2,000 crore), its draft prospectus showed. Imagine marketing's IPO to consist fresh issue of shares worth up to 9 billion rupees, offer for sale of shares worth up to 11 billion rupees.
India plans to raise spending on infrastructure in its annual budget next week to set the economy on a firmer footing, but fiscal constraints leave little chance of concessions for households hurting from the pandemic, officials said.
Asia's third largest economy is estimated to expand 9.2% in the fiscal year that ends in March, following a contraction of 7.3% in the previous fiscal year.
Future Enterprises on Thursday said it has agreed to sell a 25% stake in its general insurance joint venture, Future Generali India Insurance Co Ltd, to its partner in the entity Generali Participations Netherlands N. V. for a cash consideration of ₹1252.96 crore, plus an additional consideration that is linked to the date of the closing of the transaction.
India's benchmark 10-year bond yield hit a 25-month high on Thursday and the rupee dropped to its lowest level in a month after the U.S. Federal Reserve signalled it is ready to start tightening monetary policy to rein in inflation soon.
In its latest policy update, the Fed said it is likely to hike interest rates in March and reaffirmed plans to end its bond purchases in March.
India's benchmark 10-year bond yield rose to 6.71%, up 5 basis points from its previous close and its highest level since Dec. 19, 2019.
The rupee declined 41 paise to 75.19 against the US dollar in opening trade on Thursday, tracking the strength of the American currency after hawkish US Fed policy stance.
Forex traders said muted domestic equities, sustained foreign fund outflows and firm crude oil prices also weighed on the local unit.
At the interbank foreign exchange, the rupee opened weak at 75.18 against the US dollar, then fell further to 75.19, registering a decline of 41 paise from the last close.
In less than one month time after ushering in New Year 2022, a good number of small-cap stocks have delivered multibagger returns to its shareholders. This has happened despite weakness in the Indian stock market for more than a weak. Zodiac Energy shares are one of them. This energy stock has risen from ₹60.05 closing price on NSE on 31st December 2021) to ₹143.90 today on NSE, logging around 140 per cent rise in 2022.
Bitcoin prices declined to trade below the $36,000 level after the Federal Reserve held the interest rate at near zero with sights of increasing the rates to beat inflation. The world's largest cryptocurrency was trading over 5% lower at 35,940. Bitcoin is still comfortably above the $33,000 level it breached on Monday, which was more than 50% off its November peak.
Check cryptocurrency prices today
Oil fell from a seven-year high after the U.S. Federal Reserve signaled that it would soon start raising interest rates to quell inflation, denting investors’ appetite for risk assets including commodities.
West Texas Intermediate declined after rallying to the highest level since October 2014 on Wednesday, when global benchmark Brent topped $90. That surge came as inventories at the key U.S. storage hub at Cushing fell again last week to hit the lowest level for this time of year in a decade.
Crude traders are also tracking events in Ukraine on concern that Russia may launch an invasion after massing thousands of troops on the border, potentially disrupting energy supplies. Amid the high-stakes standoff, the U.S. has handed Russia its written response to Moscow’s security demands.
Oil has rallied in the opening weeks of 2022 on the continued recovery in energy consumption from the ravages of the coronavirus pandemic.
Cipla’s Q3FY22 result was in line with our estimates led by a strong performance in India and the US. EBITDA margin declined 130bps YoY to 22.5%. We expect EBITDA margin to stabilize at 22-23% vs earlier levels of 17-19%. Consolidated revenues grew 6% to Rs54.8bn. Adjusted PAT declined 2.6% to Rs7.3bn. The company has shown a strong performance over past 5-6 quarters in India business led by COVID-19 portfolio as well as benefits of one India strategy undertaken in FY20 which we believe would help in sustaining above industry growth. US business is expected to scale up on account of complex launches.
Upgrade to BUY with a revised target price of ₹1,058/share.
Temporary staffing company Teamlease Services Ltd reported robust December quarter earnings. Reacting to it, the stock rose around 7.5% on the National Stock Exchange in opening deals on Thursday.
Among the key highlights were the highest ever net addition of more than 15,000 associates in its key general staffing vertical, the company said in its investor presentation. Consolidated revenue rose 37% year-on-year (y-o-y) to ₹1,767 crore, while sequential revenue growth of 16% was ahead of consensus estimate of 8%. This was backed by strong growth in general staffing and HR services verticals.
4 stocks to buy or sell today — 27th January
AGS Transact Technologies IPO allotment is likely to get finalised today. In 3-day bidding, the public issue worth ₹680 crore was subscribed 7.79 times whereas its retail portion was subscribed 3.08 times. According to market observers, AGS Transact Technologies IPO GMP (grey market premium) today is ₹5. So, bidders are anxiously waiting for the announcement of share allocation. However, for information to the bidders, once the share allotment is announced, they need not to move from pillar tom post. They can check their application status online by logging in at BSE website or at the website of official registrar of the IPO. The official registrar of AGS Transact Technologies IPO is Link Intime India Private Ltd.
Edible oil major Adani Wilmar's (AWL) public issue, comprising fresh equity shares, will open for subscription today and conclude on January 31. The price band of the three day share sale is fixed at ₹218-230 per share. On Tuesday, Adani Wilmar Ltd had raised ₹940 crore from anchor investors ahead of its initial public offering (IPO).
Should you subscribe as issue opens today? GMP, key details here
Bitcoin price rose the most in three months before paring gains in volatile trading after the Federal Reserve signaled that it will begin raising interest rates soon.
The largest cryptocurrency by market value climbed as much as 6.4% to $38,927, before seeing the gain cut by about half. The increase was the most since Oct. 15. Other risk assets fluctuated in value after the conclusion of the central bank’s policy meeting.
Here is the list of the top 10 stocks that are likely to be in focus on Thursday.
Bonds tumbled across Asia on Thursday after Federal Reserve Chairman Jerome Powell’s latest hawkish pivot, with Australian and New Zealand benchmark yields spiking to fresh highs.
With growing expectations that the Fed’s stance will spur more rapid tightening from central banks across the world, New Zealand’s 10-year yield touched the highest since November 2018 while its Australian counterpart surged toward the peak of the country’s October bond market meltdown. Yields also moved higher in China, Japan and South Korea.
The sense that bonds globally face further sell-offs after last year’s worst rout since 2005 was reinforced by data showing a 31-year-high for New Zealand inflation. The region’s stocks also turned lower, a measure of global cross-asset volatility hit a one-year high and two-year Treasury yields extended their overnight jump during the Asian morning.
The rupee on Tuesday depreciated by 18 paise to close at a nearly one-month low of 74.78 against the US dollar due to month-end dollar demand from oil importers, forex outflows and a stronger dollar in overseas markets. Investors' weak appetite for riskier assets also weighed on the rupee. Moreover, market participants are now eyeing the US Fed's meeting outcome for further cues. At the interbank foreign exchange market, the local currency opened at 74.60 against the greenback and witnessed an intra-day high of 74.57 and a low of 74.80 during the session. The rupee finally settled at 74.78, down by 18 paise over its previous close of 74.60. This is the second straight session of loss for the local unit and the lowest closing level since December 27, 2021.
India's currency, debt and equity markets were closed on Wednesday on account of Republic Day. The markets will resume trading today.
The NSE Nifty 50 index closed 0.75% higher at 17,277.95 on Tuesday, while the S&P BSE Sensex was up 0.64% at 57,858.15.
Asian stocks were mixed and Treasuries trimmed a drop Thursday as investors evaluated Federal Reserve Chair Jerome Powell’s signal of a March interest-rate liftoff and the possibility of hikes at each policy meeting.
Equities fluctuated in Japan and slipped in Australia and South Korea, where Samsung Electronics Co. missed profit estimates. U.S. contracts edged higher after the fallout from the Fed wiped out a Wall Street rally on Wednesday.
The benchmark 10-year Treasury yield was at about 1.85% and the gap between five- and 30-year yields was around the narrowest since early 2019. Global bonds succumbed to losses, with the New Zealand 10-year yield hitting the highest since 2018. The dollar flirted with a one-month high.
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