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PremiumIndian indices end strongly with a gain 0.6% with Sensex ending above 63,000 and Nifty trading above 18,700 after CPI inflation eased to 4.25% in May, compared to 4.70% in the previous month. Although the inflation rate has remained within the upper tolerance band of 6% set by the central bank for the third consecutive month, it still exceeds the medium-term target of 4%.
Global investors are eagerly awaiting US inflation data and the interest rate decision by the Federal Reserve, both scheduled for this week. Analysts anticipate that the Fed will temporarily halt the interest rate hike during this round.
Indian shares advanced 0.6% on Tuesday with the broader midcap index hitting a fresh record on improved sentiment after data showed domestic retail inflation cooled in May.
The blue-chip Nifty 50 index was up 115 to close above 18,700, at 18,716, while the benchmark S&P BSE Sensex rose 418 points to end above 63,000, at 63,143. Fourteen of the 15 Nifty broad sectoral indexes logged gains in today's session.
With all indices ending in the green, FMCG, Media, Realty, Pharma and Consumer Durables gained more than a per cent. Metal and IT also registered reasonable gains. Auto remained flat in today's session and ended with minor losses.
The rally was led by Asian Paints, Titan ITC, Tata Steel and Reliance all of which registered more than a 1% jump. Kotak Bank shed more than a per cent and M&M and SBI dropped more than 0.5% each. MRF shares surpassed the 100,000 price in today's trading.
Asian stock markets were mostly higher Tuesday ahead of a U.S. inflation update and a Federal Reserve decision on another possible interest rate hike.
Tokyo shares ended higher Tuesday after Wall Street stocks advanced ahead of key economic data and central bank decisions. The benchmark Nikkei 225 index climbed 1.80%, while the broader Topix index added 1.16%.
China stocks closed up after the central bank lowered a short-term policy lending rate in an effort to restore market confidence, although economic worries and geopolitical risks limited gains.
China's blue-chip CSI300 Index added 0.5% at close, while the Shanghai Composite Index edged up 0.2%. In Hong Kong, the benchmark Hang Seng Index rose 0.6% and the China Enterprises Index climbed 0.5%.
European shares opened higher on Tuesday led by the gains in technology stocks, amid growing optimism that the U.S. Federal Reserve would skip raising interest rates in its policy meeting.
UK's main indexes edged up on Tuesday on a boost from mining stocks, with investors assessing an update on the domestic labour market ahead of key U.S. inflation data.
On Tuesday, Shriram Farm Solutions, a subsidiary of DCM Shriram Ltd, revealed that it has entered into a partnership with Nano-Yield, a US-based company, to utilize Nano-Yield's nano liquid technology in India.
According to the agreement, 'Shriram' will gain access to Nano-Yield's nano liquid technology through a technology transfer, supply, and purchase arrangement. This will enable Shriram to offer Nano-Yield's innovative nano liquid technology to its customer base in India.
"Our collaboration gives us the opportunity to bring the critical nano-technology to a vast array of agri-inputs, eventually helping in broad-basing nano-tech products for Indian farmers," Shriram Farm Solutions Executive Director and Business Head Sanjay Chhabra said in a statement.
Raghvendra Nath, MD, Ladderup Wealth Management Pvt. Ltd: India's consumer price index (CPI) has experienced a significant easing, reaching a 25-month low of 4.25% in May. This improvement can be attributed to the relatively slower increase in food prices and a favourable base effect. Notably, the CPI has remained below the Reserve Bank of India's upper tolerance limit of 6% for three consecutive months. Comparatively, the current CPI is lower than the recorded 4.7% in April 2023 and significantly lower than the 7.04% reported in May 2022. Additionally, the consumer food price index also saw a decline, falling from 3.84% in April to 2.91% in May. It appears that the Reserve Bank of India's decision to refrain from further rate hikes has proven beneficial, as the monthly inflation figures continue to decrease. Moreover, the latest inflation number aligns with the revised projection by the RBI, which now estimates inflation for Q1 2024 at 4.6%, down from the earlier projection of 5.1%.
Engineering and construction behemoth Larsen & Toubro (L&T) on Tuesday said its hydrocarbon business L&T Energy Hydrocarbon (LTEH) has secured “significant" orders.
L&T classifies orders in the range of ₹1,000 crore to ₹2,500 crore as significant.
The contracts involve engineering, procurement, construction & installation for new offshore structures. (Read More)
Reliance Industries Limited, the largest Indian corporation in terms of revenue, profits, and market value, has once again emerged as the leader among Indian companies in the 2023 edition of 'The Global 2000' published by Forbes.
In the overall ranking of 2000 global corporations, Reliance Industries secured the 45th position, surpassing renowned names such as BMW Group from Germany, Nestle from Switzerland, Alibaba Group from China, Procter and Gamble from the United States, and Sony from Japan.
Notably, Reliance Industries has made significant progress in its ranking in this prestigious global corporate listing, moving up from 53rd place in 2022 to the 45th position in 2023.
Following Reliance Industries, other prominent Indian companies featured in the 2023 rankings include State Bank of India at 77th place, HDFC Bank at 128th place, and ICICI Bank at 163rd place.
According to sources familiar with the matter, Subhash Chandra and Punit Goenka, the promoters of Zee Group, have filed a petition with the Securities Appellate Tribunal (SAT) on Tuesday. They are challenging the order issued by the Indian markets regulator, which prohibits them from holding board positions in listed companies.
The sources further revealed that the bench has scheduled the case for further hearing on Thursday.
On Monday, the Securities and Exchange Board of India (SEBI) banned Chandra and Goenka for a period of one year. SEBI stated that they were actively involved in diverting company funds to related entities within the group.
Inox Wind board members have given their approval for the merger of Inox Wind Energy into the company. The scheduled date for the amalgamation has been set as July 1, 2023. Under the proposed merger plan, Inox Wind will issue 158 equity shares to the shareholders of Inox Wind Energy for every 10 equity shares they hold. Additionally, Inox Wind will also grant 158 share warrants, priced at ₹54 each, to the shareholders of Inox Wind Energy for every 10 share warrants they currently possess, which were issued at an issue price of ₹847 each.
The British pound demonstrated strength on Tuesday as recent data revealed significant wage growth in the UK labor market, accompanied by an unexpected decline in unemployment. These positive indicators have fueled expectations that the Bank of England will continue to raise interest rates throughout the year.
The Office of National Statistics (ONS) reported robust salary growth for the three months leading up to April, with wages, excluding bonuses, showing a remarkable increase of 7.2% compared to the previous year, further boosted by a rise in the minimum wage.
As a result, the pound initially experienced an increase of up to 0.52% before retracting to $1.257, resulting in a 0.47% gain for the day. Against the euro, sterling remained relatively stable at 85.98 pence.
India’s ad revenue is expected to grow by a subdued 12% to $17.3 billion in 2023, according to a report by advertising agency GroupM. However, the agency estimated this figure to rise to 13.6% next year.
The report titled ‘This Year Next Year 2023 Global Mid-Year’, said the macroeconomic environment has prompted some markets to trim expectations for 2023 compared with the December 2022 forecast. This list includes India, which is expected to see a 12% growth against the initial projection of 16.8%. (Read More)
HFCL Limited, an enterprise offering communication network solutions for telcos, railways, and defence sectors, announced its new order win worth ~ ₹80.92 crores from Delhi Metro Rail Corporation (DMRC) Limited. As part of this project, HFCL will be setting up Fibre Optics Transmission System (FOTS) for Delhi Metro Rail Project of Delhi Metro Rail Corporation (DMRC) Limited, said the statement.
The company added that the timeline to execute this order is 156 weeks from the date of notice to proceed (NTP). Thereafter, HFCL has to provide warranty support for 104 weeks. The company will be involved in the design, manufacture, supply, installation, testing and commissioning of Fibre Optics Transmission System (FOTS) for three priority Corridors of Phase-IV of Delhi Metro Rail Project.
Mahin Gupta, Founder of Liminal, a wallet infrastructure & custody solutions platform, comments on SEC action on crypto firms: The recent lawsuits filed by the SEC against Binance and Coinbase indicate a significant shift in regulatory approach towards the digital asset industry. Previously, the SEC had faced criticism for its perceived slow response in regulating the industry, which allowed certain malicious actors to operate without proper oversight, as exemplified by the FTX incident.
This marks the beginning of a series of actions aimed at establishing tighter control over the industry. While these measures may ultimately contribute to legitimizing the web3 industry in the long run, it is important to acknowledge that such strong actions could potentially stifle innovation. Therefore, web3 firms need to proactively prepare themselves for heightened regulatory scrutiny.
Web3 enterprises must prioritize compliance with all relevant laws and regulations. Additionally, they should establish robust internal controls to safeguard investor interests. Transparency regarding their operations is crucial, as is constructive engagement with regulators. By fostering collaboration between the digital asset industry and regulators, a balance can be struck between promoting innovation and ensuring investor protection. This collaborative approach will ultimately foster the long-term growth and success of the web3 industry.
Vikas Ecotech Ltd., a small-cap company, has attracted investment from AG Dynamic Funds Limited, a foreign institutional investor based in Mauritius. This stake acquisition aligns with Vikas Ecotech's ongoing capital raising efforts, wherein the company has issued new shares to AG Dynamic Funds Limited, as well as two other foreign institutional investors. The two additional FIIs involved in this investment are Vikasa Global Fund PCC- Eubilia Capital Partners Fund I and Calypso Global Investment Fund. (Read More)
The Society of Indian Automobile Manufacturers (SIAM) has published its latest report on the performance of the Indian auto industry for May 2023. Based on the data, the total production of passenger vehicles, three-wheelers, two-wheelers, and quadricycles reached 21,24,235 units during the mentioned month.
According to SIAM's findings, the sales of passenger vehicles in the country amounted to 3,34,247 units in May, showing a growth rate of 13.5% compared to May 2022. Similarly, the sales of three-wheelers recorded a significant increase of 70.4% year-on-year, with a total of 48,732 units sold in May 2023.
In the two-wheeler segment, sales reached 14,71,550 units in May 2023, reflecting a growth rate of 17.4% compared to the same month last year.
JPMorgan has commenced coverage on Mankind Pharma, assigning it an "Overweight" rating and a target price of ₹1,700 per share. This target price suggests a potential increase of more than 10% compared to today's high price.
According to the brokerage firm, Mankind Pharma is recognized as one of the rapidly expanding pharmaceutical companies in the domestic market, and it holds a prominent position in terms of value. (Read More)
According to a report by Reuters citing CNBC Awaaz, it is anticipated that Rakesh Gangwal, co-founder of IndiGo, along with his family, may sell a stake ranging from 5% to 8% in InterGlobe Aviation. This stake is estimated to be worth up to 75 billion rupees ($909.58 million). The report further mentioned that the Gangwal family is likely to sell their stakes through block deals once the lock-in period for shares expires on July 15. (Read More)
Praveen Sahay - Research Analyst, Prabhudas Lilladher Pvt Ltd: Room Air Conditioner (RAC) Channel Check update (June-2023)
We connected with 13 dealers of RAC across India to gauge the summer season’s demand/pricing scenario. As per our interaction, demand for Room Air Conditioners were moderate and North India stands most affected due to unseasonal rains. Below key takeaways:-
Competitive Price to continue
Due to intense competition, brands have not yet taken any price hike.
Soft Demand in summer season
Volumes picked up by April end, however May-June were again impacted due to unseasonal rains (mostly in North India). West India saw pick up in May-23 with severe summer, while dealers were still at lower sales volume compared to previous year’s summer season. Demand may further stand impacted with the upcoming rainy season.
RAC Inventory at normal level
Our channel checks suggest that inventory is at normal level, an average of around 45 days at dealer’s level.
Other highlights
The most selling product in RAC segment is 1.5 ton 3-star AC’s of Voltas and Daikin. In the high end range, Mitsubishi and O-General AC’s are preferred.
Vivek Kumar from JM Financials recommendations on Hero MotoCorp: Company Update BUY INR 3,200
We attended Hero Motocorp’s (HMCL’s) analyst meet and leadership interaction to understand future business strategy. The company is making concerted efforts to accelerate profitable growth going ahead. Recent product interventions (Xtec and Xoom) have been received well. Product pipeline remains robust with multiple new launches expected going ahead across 125cc segment, premium motorcycles, scooters and EVs. HMCL is also upgrading customer experience by digitalizing buying journey and plans to open 500+ ‘Hero 2.0’ stores and 100+ exclusive premium stores going ahead. Near-term focus will also be on scaling-up EVs through network and product expansion. Richer product mix, accelerated growth in spares revenue, higher localisation, operating leverage and softening RM are the key levers for profitable growth going forward. Maintain BUY with an unchanged Mar’24 TP of INR 3,200 (15x FY25e EPS). Recovery in rural demand will be a key monitorable.
Gaurav Bissa, VP, InCred Equities recommendations on MRF stock: MRF has witnessed a strong upside in the last few months with continued outperformance against broader market indices. The stock is currently forming bullish flag pattern on the weekly charts which is a continuation pattern in nature. It had earlier given a breakout retest from a triangle pattern 95000 levels followed by some consolidation. A close above 1lac will confirm bullish flag breakout which can push it towards 115000 levels. The stock is showing equally interesting setup on point and figure charts.
The stock has seen follow-through of bullish ABC pattern breakout on 0.25x3 daily time frame. The cluster target comes to around 115000 on point and figure charts which coincides with the bullish flag and triangle pattern targets.
The Punjab & Sind Bank's share price rose as the board on Monday approved the raising of capital up to ₹750 crore through bonds in one or more tranches, as per a regulatory filing. The bank said the fund raising of ₹750 crore will be through Base-III compliant additional Tier-I bonds in one or more tranches within a period of one year. Punjab & Sind Bank posted double-digit growth of 32.03% YoY in net profit to ₹456.99 crore in Q4FY23. On the contrary, the bank's net interest income (NII) dipped by 1.97% YoY and sharply by 15.05% QoQ to ₹683.78 crore in the quarter.
Sebi on Monday barred Zee Entertainment Enterprises Ltd promoters Subhash Chandra and son Punit Goenka from holding key roles, including board positions and top executive positions, in any publicly traded company. The directions come after the markets regulator found them prima facie guilty of siphoning funds from the listed entity for their personal benefit. The interim order has come at a time when the company is seeking regulatory approvals for a merger with Sony Pictures Networks India.
Oil prices remained close to their lowest level in nearly three months due to ongoing concerns about the demand outlook in China and the United States.
West Texas Intermediate (WTI) futures stabilized above $67 per barrel, following a decline of more than 7% in the previous three sessions. Meanwhile, the global benchmark Brent crude hovered around its lowest closing price since December 2021.
The sluggish Chinese trade data, coupled with international air travel from Northeast Asia remaining significantly below pre-pandemic levels, underscored the slow recovery in the world's largest crude oil importer. In an effort to stimulate growth, China's central bank unexpectedly reduced its short-term policy interest rate on Tuesday.
Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services: The market rally which began in April remains strong with healthy corrections. The market construct is favourable for continuation of the rally. The global support for the rally comes from the consolidation in the US market where S&P 500 is at a 52-week high with low volatility, indicating lack of fear in the market. The domestic support to the market comes from strong economic cues. The May CPI inflation at 4.25% and IIP at 4.2% are better than expected. The decline in inflation is a big positive from the market perspective since it opens up possibilities of a rate cut by end 2023. The 4% drop in crude price even after the OPEC production cut is good news for India.
Taking cues from the better-than-expected economic news, DIIs have emerged big buyers during the last two days. This will impart resilience to the market.
Mohit Ralhan, Chief Executive Officer TIW Capital's Perspective on CPI IIP announcement: At 4.25%, inflation continued to remain on a downward trajectory, reaching a 25-month low, driven by the decline in consumer food price inflation from 3.8% in April to 2.9% in May. A decline in oils & fats, vegetables, meat & fish prices more than offset any increase from cereals and spices. Fuel inflation also declined from 5.5% to 4.6% YoY. However, the core component still remains somewhat sticky. The good news on inflation was further accentuated by an increase in IIP to 4.2% in April, a significant improvement over the 1.1% level in March. Growth was led by a revival in the manufacturing and mining sectors. RBI is still likely to retain the pause on the interest rate at least till the time worries over the spatial and temporal distribution of monsoon. Overall, the domestic economy is looking increasingly under control and on the correct trajectory"
Sameet Chavan, Head Research, Technical and Derivatives, Angel One Ltd: The Indian equity market has started the week on a mild note, defying the developments in the global bourses over the weekend. The benchmark index refrained from any decisive move and stayed in a slender range of 75 odd points throughout the session. Amidst the lackluster start of the week, the Nifty50 witnessed a muted closure with a mere gain of 0.21 per cent and settled a tad above 18600 level.
The indecisiveness is quite evident as the index made a small ‘Doji’ candlestick on the daily chart. Technically, there have been no significant changes as the market had a subdued closing. As far as levels are concerned, a decisive closure above the 18700-18750 zone would only affirm the strength in the benchmark. Whereas on the downside, 18500-18450 is likely to act as a sacrosanct support zone and till it is sustained, we do not see a sign of caution in the near period.
Meanwhile, we remain sanguine with broader-market participation, which is likely to contribute to the buoyant undertone in the market. Simultaneously, one needs to keep a close tab on the mentioned levels and have a pragmatic approach to the indices. Also, individual pockets are comparatively performing well, and traders need to focus on the stock-specific approach to gauge trading opportunities.
According to a report, State Bank of India (SBI), the largest bank in the country, is planning to commence its rupee bond issuances for the financial year 2023-2024 by the end of June or early in the following month.
Sources cited by the Economic Times state that SBI will initiate these issuances with the sale of additional tier-1 bonds.
The bond sale is anticipated to be for an amount of up to ₹10,000 crore, which includes a base size of ₹3,000 crore and a green shoe option of ₹7,000 crore, as mentioned in the report. (Read More)
According to an anonymous source cited by Reuters, Intel, the US technology giant, is currently engaged in discussions with SoftBank Group Corp's Arm to become a key investor in Arm's upcoming initial public offering (IPO). Arm is planning to raise an estimated $8 billion to $10 billion through its IPO, which is scheduled for listing on Nasdaq later this year.
Reports from the media indicate that SoftBank intends to list its Arm division on Wall Street at some point this year, subject to market conditions. The company has already chosen four investment banks—Goldman Sachs, JPMorgan Chase, Barclays, and Mizuho Financial Group—to handle Arm's IPO. (Read More)
Inox Wind board members have given their approval for the merger of Inox Wind Energy into the company, according to reports. The scheduled date for the amalgamation has been set as July 1, 2023. Under the proposed merger plan, Inox Wind will issue 158 equity shares to the shareholders of Inox Wind Energy for every 10 equity shares they hold. Additionally, Inox Wind will also grant 158 share warrants, priced at ₹54 each, to the shareholders of Inox Wind Energy for every 10 share warrants they currently possess, which were issued at an issue price of ₹847 each.
Sebi has barred Zee Entertainment's promoters from holding key roles in any publicly traded company after finding them guilty of siphoning funds. HDFC will raise INR10,000 crore ($1.33bn) by issuing non-convertible debentures on a private placement basis, while Jaguar Land Rover targets annual investments of £3bn ($4.1bn) and revenue of over £30bn by FY26. Inox Wind has approved the merger of Inox Wind Energy into the company, and Punjab & Sind Bank will raise up to INR750 crore through bonds. (Read More)
The Directorate General of Civil Aviation announced that it has streamlined the procedure for Indian airlines to expand their international routes, making it easier for them to add foreign destinations.
"...the current 33-point checklist has been rationalised and reduced to a 10-point checklist related to their preparedness for the intended operations, removing other generic and redundant provisions in the existing checklist," the civil aviation regulator said. (Read More)
The Securities and Exchange Board of India (SEBI), the market regulator, has imposed a ban on Subhash Chandra, the chairman of Essel Group, and Punit Goenka, the Chief Executive Officer (CEO) of Zee Entertainment Enterprises (ZEEL), prohibiting them from holding any director or key managerial personnel positions in any listed company or its subsidiaries until further notice. SEBI's decision comes as a result of its investigation, which revealed that Subhash Chandra and Punit Goenka had misappropriated funds from their listed company, ZEEL, for their personal gains.
Although the promoters are likely to challenge the interim order, this development has come at a critical time for the company, as it is currently seeking regulatory approvals for a merger with Sony Pictures Networks India. Legal experts consider this order as a significant setback for the company. (Read More)
These stocks will be trading ex-dividend in today's session with Diamines & Chemicals having declared a final dividend of ₹3 and Jindal Saw also with a final dividend of ₹3. LKP Finance will trade ex-dividend with a declared final dividend of ₹1 and LKP Securities with a declared final dividend of ₹0.1.
Vaishali Parekh has recommended three intraday stocks for today. Here we list out full details in regard to those day trading stocks:
1] BSE: Buy at ₹570, target ₹597, stop loss ₹557;
2] Castrol India: Buy at ₹116, target ₹122, stop loss ₹114; and
3] M&M Financial Services: Buy at ₹290, target ₹305, stop loss ₹284. (Read More)
According to data released on Monday by the Ministry of Statistics and Programme Implementation (MoSPI), inflation, as measured by the Consumer Price Index (CPI), eased to 4.25% in May, compared to 4.70% in the previous month. Although the inflation rate has remained within the upper tolerance band of 6% set by the central bank for the third consecutive month, it still exceeds the medium-term target of 4%. (Read More)
Foreign institutional investors (FIIs) continued their selling trend for the second consecutive trading session, while domestic institutional investors (DIIs) maintained their buying streak. On Monday, FIIs sold Indian stocks worth approximately ₹627 crore, whereas DIIs witnessed an increased inflow of around ₹1,794 crore. The Sensex and Nifty 50 indices showed cautious movements as traders closely monitored significant economic data.
As per NSE data, cumulatively, FIIs buying value stood at ₹6,321.86 crore and selling value at ₹6,321.86 crore on June 12th -- registering an outflow of ₹626.62 crore in Indian equities.
On the contrary, DIIs purchased ₹6,663.64 crore worth of equities, while they offloaded ₹4,869.79 crore -- recording an inflow of ₹1,793.85 crore today. (Read More)
The S&P 500 and the Nasdaq rallied on Monday to their highest closing levels since April 2022, while Oracle hit a record high ahead of quarterly results as investors awaited inflation data and the Federal Reserve's interest rate decision this week.
Lifted by gains in market heavyweights Amazon, Apple and Tesla, the S&P 500 has now recovered 21% from its October 2022 lows. Some investors say Wall Street is the midst of a bull market.
"The further out the October lows get in the rearview mirror, the more confident investors become. Have investors become more complacent? They probably have, and that's actually a good sign," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.,
Tesla rose 2.2% and has now climbed for 12 straight trading sessions, a record for the electric car maker.
Apple and Microsoft each rose about 1.5%, with year-to-date gains in the two technology companies' shares reaching 41% and 38%, respectively.
The S&P 500 climbed 0.93% to end the session at 4,338.93 points.
The Nasdaq gained 1.53% to 13,461.92 points, while Dow Jones Industrial Average rose 0.56% to 34,066.33 points. (Reuters)
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