On expected lines, RBI settled for a smaller 25 basis points repo rate hike. RBI increased the FY23 GDP growth estimate to 7% from 6.8% and expects the retail inflation to be at 5.6% in Q4. Most Adani Group firms rose in today’s session with Adani Enterprises jumping 23% and Adani Wilmar hitting the upper circuit.
Indices soar as Nifty gains 0.85% and Sensex 0.63% on the back of most Adani stocks maintaining their forward run
Indian shares held steady on Wednesday after the Reserve Bank of India delivered a smaller interest rate hike as widely expected, while many of the embattled Adani Group shares recouped losses for a second straight day.
The Nifty 50 index jumped 150 to close at 17,871. The S&P BSE Sensex rose 377 points to end above 60,600, at 60,633.
The central bank raised the key policy repo rate by 25 basis points, in line with economists’ expectations, and surprised markets by leaving the door open to more tightening, saying core inflation remained high.
Meanwhile, the majority of Adani Group stocks surged for a second straight day with the flagship Adani Enterprises jumping 23% and Adani Ports 9%. However, Adani Green and Adani Total shed in today’s session.
Other major gainers in today’s session were HDFC Life, SBI Life and Bajaj Finance. L&T, Hero MotoCorp, Eicher Motors and Bharti Airtel shed more than a per cent each.
Metal sector gained 3.5% and IT sector 1.5%. Pharma also ended with reasonable gains. All sectoral indices ended in the green on Wednesday.
Global indices mostly rose on Wednesday after Federal Reserve Chair Jerome Powell passed up an opportunity to tamp down investor optimism.
Tokyo’s remained an exception as the key Nikkei index ended lower as share prices were weighed down by a stronger yen and lacklustre earnings reports from some corporate giants. The benchmark Nikkei 225 index slipped 0.29%, while the broader Topix index added 0.03%.
China and Hong Kong stocks ended lower in thin trade on Wednesday as the ongoing U.S.-China balloon spat weighed on sentiment, while some investors waited for more proof of economic recovery.
China’s blue-chip CSI 300 Index dropped 0.44%, while the Shanghai Composite Index was down 0.49%. Hang Seng Index dipped 0.07% and Hang Seng China Enterprises Index declined 0.59%.
European shares hit a more-than-nine-month high as investors drew positive cues from Federal Reserve Chair Jerome Powell’s remarks overnight, while Linde’s and Akzo Nobel’s upbeat forecasts led material and chemical stocks higher. The pan-European STOXX 600 was up 0.6% in the morning session hitting its strongest level since April 2022.
UK’s blue-chip index hit a record high following sharp gains. The exporter-heavy FTSE 100 rose to an all-time high of 7,925.02, surpassing its previous peak of 7,906.58 hit just last week. The midcap FTSE 250 index also climbed.
India seeks investment by LIC, pension fund in green energy – sources
The Indian government is considering mandating the Life Insurance Corp of India (LIC) and sovereign pension fund to invest 1% of their assets under management in bonds issued by state-run power lending firms to finance green projects, two sources said.
The federal power ministry has written to the finance ministry asking that the LIC and Employees’ Provident Fund Organisation (EPFO) be mandated to invest in such bonds issued by Power Finance Corp (PFC), REC Ltd and Indian Renewable Energy Development Agency (IREDA), according to two government officials who declined to be identified.
LIC and EPFO have combined assets under management of 50 trillion rupees ($604.87 billion). A commitment of billions of dollars in bonds by two of the biggest funds in the country would be key to filling an estimated $3 trillion investment gap in meeting a 2070 goal for net zero emissions.
“The government is working on a proposal seeking investment of 1% of the market value of assets managed by LIC and EPFO in the bonds that would be raised to fund green projects,” one of the officials said. (Reuters)
Karnataka HC grants interim stay to Flipkart India on demand exceeding ₹1,100 crore
Karnataka High Court on Wednesday granted an interim stay on demand of over ₹1,100 crore against Flipkart India, according to a report by CNBC. The high court mentioned in its order that no coercive action shall be taken against the company till the next hearing on 24 February.
While arguing the case, Flipkart has submitted that the appellate authority passed the order in violation of principles of natural justice, and the findings were also not provided to the company. (Read More)
Adani Wilmar Q3 net profit rises 16.5%; shares rally
Adani Wilmar Ltd on Wednesday reported a 16.5% rise in its Q3 consolidated net profit at ₹246 crore as compared to ₹211 crore in the year-ago quarter. On Wednesday, shares of Adani Wilmar Ltd were up 4.99% at ₹418.80 apiece on the NSE in the late afternoon deals. The company’s revenue from operations rose 7% to ₹15,438.05 crore from ₹14,370.92 crore in the same quarter last year.
“This was achieved on the back of the large opportunity available in the packaged food industry, well supported by our portfolio of premium and popular brands, pan-India distribution, and manufacturing facilities across the length and breadth of the country,” the company said in a statement. (Read More)
Oil rises for third day as rate hike concerns ease
Oil rose for a third straight day on Wednesday as investor concern eased about U.S. interest rate hikes and an industry report pointed to a drop in U.S. crude inventories.
Comments from U.S. Federal Reserve Chair Jerome Powell on Tuesday were seen as less hawkish than feared, boosting risk appetite and weighing on the dollar. A weaker dollar makes oil cheaper for other currency holders.
“It would appear traders had become a little more defensive on the expectation of a hawkish shift but Powell refrained from taking the leap,” said Craig Erlam, senior market analyst at brokerage OANDA.
Brent crude rose 99 cents, or 1.2%, to $84.68 a barrel by 0912 GMT. U.S. West Texas Intermediate (WTI) crude climbed 93 cents, or 1.2%, to $78.07.
With less aggressive U.S. rate hikes, the market is hoping the world’s biggest economy can dodge a sharp economic slowdown or even a recession that would hit oil demand, while China’s reopening after ending COVID curbs also bolsters fuel use. (Reuters)
Dividend paying stock: Media stock announces 75% interim dividend. Do you own?
Chennai-based Indian mass media company Sun TV Network has announced interim dividend of ₹3.75 per equity share to its shareholders for the financial year 2022-23. The board of directors of the mid-cap media stock with a market cap of around ₹18,086 crore declared interim dividend to the tune of 75 per cent to its shareholders in one of its recent exchange communications. the board of directors of the company declared the interim dividend in its meeting that took place on 3rd February 2023. The company board has already declared Sun TV Network dividend record date on 13th February 2023 and it will trade ex-dividend on 13th February as well. (read more)
India’s Shree Cements posts 44% fall in Q3 profit on high fuel costs
India’s Shree Cement Ltd reported a 43.7% fall in third-quarter profit on Wednesday, missing expectations, as persistently high input and fuel costs triggered by the Russia-Ukraine war weighed on the cement sector.
The Kolkata-based company posted a standalone profit of 2.77 billion Indian rupees ($33.5 million) for the quarter ended Dec. 31, compared with 4.92 billion rupees a year earlier.
Analysts, on average, had expected a profit of 3.22 billion rupees, according to Refinitiv IBES data.
Total expenses rose 26.8% to 38.46 billion rupees, amid a surge in global oil prices.
Even though prices of key fuel components such as petroleum coke and coal slightly cooled-off in the third quarter, prices remained elevated. Marginal cement price hikes, largely led by the eastern region of the country, failed to offset the surge.
Power and fuel costs, which account for a major part of the cement maker’s expenses, jumped 61.3% to 13.03 billion rupees. (Reuters)
Bajaj Finance gains more than 2% in today’s trading
London hits record peak as Europe stocks open higher
The London stock market jumped Wednesday to another all-time peak and eurozone equities also opened higher as investors continued to digest record annual profits from energy majors BP and Shell.
The British capital’s benchmark FTSE 100 index of top companies gained 0.7 percent from Tuesday’s close to a record 7,921.46 points.
In the eurozone, Frankfurt’s DAX index advanced 0.8 percent to 15,437.69 points and the Paris CAC 40 added 0.7 percent to 7,183.43. (AFP)
REC to invest ₹30 crore to support Boxing Federation of India
State-owned company Rural Electrification Corporation (REC) has committed ₹30 crore to the Boxing Federation of India (BFI) over the next three years to develop boxing as a sport in India.
As a part of the support agreement, BFI will be utilising the funds to conduct an international training camp in New Delhi in March ahead of the upcoming 2023 IBA Women’s World Boxing Championships. (Read More)
More views on RBI MPC announcement
Deepak Agrawal, CIO – Debt, Kotak Mahindra Asset Management Company: RBI hiked rates by 25 bps in line with expectation by 4: 2 vote in favor of hike. Core Inflation and Financial Stability concern led to “withdrawal of accommodation” stance being maintained as against market consensus. Based on RBI forward looking FY 24 inflation forecast of 5.30%, at 6.5% repo rate, the real rate is 1.25%. We believe this is the last rate hike in this cycle.
Shanti Lal Jain, MD & CEO of Indian Bank: Considering domestic inflation outlook, growth prospect of the economy and emerging global scenario, RBI has decided to hike the policy rates by 25 bps. The outcome is in line with the market expectations and gives confidence on the RBI’s efforts to keep the economy resilient, support growth during the present global uncertainties & to control the inflation.
Expansion of TReDS will further improve cash flows to the MSMEs. Enable UPI to inbound travellers to India will showcase the potential of UPI to the world and promote cashless economy. Discussion papers on Penal charges on loans will bring more uniformity in aligning of charges, reduction of customer grievances and will bring better credit discipline. Impetus for climate risk & sustainable finance will further strengthen the banking sector.
Niraj Kumar, chief investment officer, Future Generali India Life Insurance Company Ltd: RBI has remained steadfast in its objective of managing growth inflation dynamic in an environment where monetary policy is being dictated by the global considerations. Expectedly, RBI raised rates by 25 bps while continuing its stance of withdrawal of accommodation. RBI has so far raised rates by 250 bps in this cycle in a calibrated manner which was needed to pull back inflation closer to RBI tolerance band and manage FOREX volatility. RBI has remained ahead of the curve in the context of global monetary tightening which is evident from moderating inflation & FOREX stability despite high CAD. With real rates rising into positive territory, we believe that we are at the end of the current rate cycle. Despite steep interest rate hike and global growth headwinds, RBI expects real GDP growth to stay at 6.4% with inflation moderating to 5.3% which is reassuring from the macro-economic stability perspective.
Pharma index shines as it gains almost a per cent with most stocks in the index trading in green
Amid Adani Group developments, RBI chief says Indian banking system stronger, larger to be impacted by ‘case like this’
Reserve Bank Governor Shaktikanta Das on Wednesday said the strength, size and resilience of the Indian banking system now are much stronger and larger “to be affected by a case like this” in reference to the developments at Adani Group. Concerns have been raised in various quarters about Adani Group companies, including about the exposure of lenders to the conglomerate, in the wake of an adverse report by US-based short seller Hindenburg Research that also triggered a massive sell-off in the shares of the companies. To queries related to the Adani Group, Das said the Reserve Bank of India (RBI) has made its own assessment to come out with the statement on Friday, where it termed the banking sector as strong and resilient. “The strength, size and the resilience of the Indian banking system now are much stronger and larger to be affected by a case like this,” Das said without directly mentioning about the Adani Group.
He was responding to a query on whether the RBI will be giving any guidance to domestic banks about their exposure to the Adani Group companies in the context of rating agencies’ reports related to banks’ exposure to the Group. Briefing reporters after the monetary policy announcement, Das said that when banks do lend, they take their calls on the fundamentals of a company and the expected cash flows from projects. (PTI)
A Clear Target Emerges in Tech Layoffs: Middle Managers
As Meta Platforms Inc., Alphabet Inc. and other Silicon Valley behemoths look to lighten payrolls after years of feverish hiring, a clear target has emerged: the middle manager.
Meta will be cutting some layers of management, Chief Executive Officer Mark Zuckerberg said on the company’s earnings call Wednesday, naming 2023 its “Year of Efficiency.” The company let go of over 11,000 workers last year, 13% of its workforce, in its first major layoff. This is “just the beginning,” said Susan Li, the company’s chief financial officer. The stock staged the biggest single-day rebound in nearly a decade after reporting revenue that beat expectations.
Recent layoffs at Alphabet, meanwhile, revealed a startling stat: Google employs more than 30,000 managers, according to remarks Fiona Cicconi, Google’s chief people officer, made to staff. The company eliminated 12,000 jobs this month, or 6% of its workforce. (Read More)
Japan’s Nikkei falls amid weak tech earnings; Nintendo tumbles
Japan’s Nikkei share average fell on Wednesday amid heavy selling of big tech names including Nintendo and SoftBank Group following disappointing financial results, erasing any feel-good factor from a Wall Street rally overnight.
Startup investor SoftBank Group tumbled 5.1% after slumping to a quarterly loss, while video-game maker Nintendo plunged 7.5% after trimming its profit forecast.
Electronics maker Sharp Corp plummeted 12.6% to be far and away the Nikkei’s biggest decliner, following its own earnings miss.
The Nikkei lost 0.3% to close at 27,606.46, after starting the day with a small advance following strong gains for all of the big three U.S. stock indexes. However, the benchmark was well off the session low at 27,458.53. (Reuters)
Hero MotoCorp struggles in today’s session as it sheds almost 2%
Paytm merchant payments volume rise by 44% YoY in Jan, no. of loans up by 103%
Paytm’s merchants payment volume(GMV) rose by 44 per cent YoY to ₹1.2 lakh crore in January 2023, the company said on Wednesday. Its average monthly transacting users (MTU) grew by 29% YoY to 89 million last month.
Notably, the company is witnessing an upward trajectory of its growth in loans and monthly users in past few months. Last month, the company disbursed a total of 3.9 million loans through its platform, which is 103% higher than the amount of loans the company had disbursed in January 2022. (Read More)
Views on RBI MPC announcement
Aditi Nayar, Chief Economist and Head – Research & Outreach, ICRA Ltd: The MPC’s growth outlook for H2 FY2024 is higher than our projections, albeit similar to our assessment of the potential GDP growth. This may have fed into the Committee’s higher-than-expected inflation projection for that period, underpinning the continued cautiousness signaled by the unchanged stance. With the stance continuing to focus on withdrawal of accommodation, the window remains open for further rate hikes if inflation exceeds the MPC’s projections. We expect the MPC to remain vigilant and data dependent in FY2024.
S Ranaganathan, Head of Research at LKP Securities: As growth remains resilient, the Repo hike of 25bps by the RBI was on expected lines in order to anchor inflation. The hike seems appropriate at this point although food inflation is not easing but is expected to cool down in view of the good Rabi crop.
Tejas Khoday, co-founder and CEO of FYERS: With the first monetary policy of CY23, the RBI Governor, supported by the Monetary Policy Committee (MPC) decided to increase the policy repo rate by 25 bps to 6.5 per cent. A similar quantum of a rate hike in the SDF rate to 6.25% and the MSF rate to 6.75%. With only four out of six MPC members voting in favour of hiking the bank rates, there is a possibility of pausing rate hikes in the upcoming policy meets of FY24. The stance of withdrawal of accommodation remains to ensure that inflation remains within the target while supporting growth. CPI inflation did move below the MPC’s tolerance level in November 2022. But with core inflation continuing to remain higher than the tolerance level, a rate hike was on the expected lines. Projected GDP growth for FY23 is at 7 per cent, and FY24 is at 6.4 per cent. The inflation projection for FY24 is at 5.3 per cent.
Raghvendra Nath, MD – Ladderup Wealth Management: RBI on expected lines hiked the policy rate by 25 bps to take repo rate to 6.5%. RBI will follow major global central banks while deciding on monetary tightening unless it results in a significant slowdown. Inflation has been in a downward trajectory over last couple of months and the same is also reflected in RBI forecast for FY24 at 5.4% which is at manageable levels. We feel that if the key economic indicators are in line with expectations, RBI may in the next six months make its stance neutral.
Microsoft Unveils Bing Search Engine Using OpenAI Technology
Microsoft Corp. showed off plans to use new tools from startup OpenAI to improve its little-used internet search and browsing services, seeking to gain ground against market leader Google by being first to offer conversational responses powered by artificial intelligence.
The company unveiled a new version of its Bing search engine and Edge browser that incorporate technology from OpenAI, maker of the viral chatbot ChatGPT, a revamp designed to make it easier for users to create content and find answers on the web.
“This technology is going to reshape pretty much every software category,” Microsoft Chief Executive Officer Satya Nadella said at an event Tuesday at the company’s Redmond, Washington, headquarters. It’s “high time” innovation was restored to internet search, he said. (Bloomberg)
Most Adani Group firms rise; Adani Enterprises jumps 13 pc
Shares of most of the Adani group firms gained in late morning trade on Wednesday, with flagship company Adani Enterprises rising 13 per cent.
As many as eight Adani Group firms were trading in the positive territory while two were in the red.
On the BSE, the scrip of Adani Enterprises zoomed 13.07 per cent to ₹2,038 apiece and its market capitalisation rose to ₹2.32 lakh crore.
Adani Ports and Special Economic Zone jumped 7.24 per cent to ₹593.35 per share, with market valuation at ₹1.28 lakh crore.
Adani Transmission increased 5 per cent to ₹1,314.25, Adani Power went up 4.99 per cent to ₹182 and Adani Wilmar surged 4.99 per cent to ₹419.35. These shares reached their upper price band.
NDTV went up 3.94 per cent to ₹225.50, Ambuja Cements rose 1.15 per cent to ₹388.10 and ACC gained 0.43 per cent to ₹2,004.
Out of the ten listed companies of the Adani Group, two were in the red — Adani Total Gas slumped 5 per cent to touch the lower price band of ₹1,394.15, and Adani Green Energy fell 1.59 per cent to ₹829.80. (PTI)
Noon Update: Indices gain after RBI hikes interest on expected lines; Sensex adds 450 pts and Nifty 150 pts
Adani stocks continue to rise as Adani Enterprises gains 12% and Adani Ports 7%. Metal and IT indices lead the rally
Gold rates today trade flat despite dip in dollar index. Buy, sell or wait?
Despite the dip in US dollar rates and dollar index post-US Fed chief Jerome Powell signalled a less hawkish stance on an interest rate hike, gold prices trade flat in early morning deals on Wednesday. The yellow metal future contract on MCX for April 2023 witnessed profit booking after hitting an intraday high of ₹57,259 per 10 gm in intraday trade. Yesterday dollar index witnessed profit-booking post-US Fed chief Jerome Powell dropped signals about less hawkish stance on interest rate hikes. After Jerome Powell’s speech, the US dollar erased its early gains in the late Tuesday session. In fact, the dollar index has opened today in red zone by losing around 0.09 per cent on Wednesday.
According to commodity market experts, gold prices have immediate support placed at ₹56,800 and ₹56,400 levels in the domestic market whereas it has support placed at $1,860 and $1,835 per ounce levels in the international market. They said that on the upper side, the gold price is facing hurdles at ₹57,700 and ₹58,100 levels whereas in global spot market, it is facing hurdle at $1,890 and $1,920 per ounce levels. However, they maintained that overall bias is positive and any dip in precious metal should be seen as buying opportunity. (Read More)
INDIA BONDS-Bond yields rise as RBI hikes rate, keeps stance unchanged
Indian government bond yields edged higher on Wednesday after the Reserve Bank of India (RBI) hiked the repo rate as expected, but maintained its policy stance, which dampened sentiment.
The benchmark 10-year yield was at 7.3435% as of 11:30 a.m. IST. It was at 7.3124% before the policy decision, after closing at 7.3102% on Tuesday.
The policy is tilting towards the hawkish side, as we cannot be sure that the 6.50% is the terminal repo rate, a trader with a state-run bank said. “Market will wait for the press conference before taking any major direction.”
The RBI hiked its key repo rate by 25 basis points (bps) on Wednesday as expected but surprised markets by leaving the door open to more tightening, saying core inflation remained high.
The central bank said its policy stance remained focused on the withdrawal of accommodation. Most analysts had expected Wednesday’s hike to be the final increase in the RBI’s current tightening cycle, which has seen it raise rates by 250 bps since May last year. Four of the six members voted in favour of the decision. (Reuters)
Metal index shines in today’s sessions as it jumps 2% with most stocks in green
TCS bags $700-million deal from UK insurance services provider
With a new arrangement with an insurance services provider, Tata Consultancy Services (TCS) has secured its largest UK transaction in three years. The digital transformation of Phoenix Group Holdings’ product offering would cost more than £600 million ($723 million), according to a February 8 statement from TCS.
The Phoenix Group already uses some services from TCS, which claims that the partnership’s extension will make the UK business more competitive.
As part of the agreement, Asia’s largest outsourcer will incorporate ReAssure’s historical operations onto its primary financial services platform. Phoenix owns ReAssure. The three million insurance under ReAssure will be serviced and administered by a TCS division in the UK. (Read More)
HDFC Life shines as it jumps more than 3% in today’s trading; among top gainers
UPI facility to inbound travellers for merchant payments at airports: RBI
The Reserve Bank of India has proposed to extend the UPI facility to inbound travellers for merchant payments; initially to travellers from G20 countries.
UPI has become hugely popular for retail digital payments in India. It is now proposed to permit all inbound travellers to India to use UPI for their merchant payments (P2M) while they are in the country. To begin with, this facility will be extended to travellers from G-20 countries arriving at select international airports.
“It’s now proposed to permit all inbound travellers to use UPI payments for their merchant payments while they are in the country. To begin with, this facility will be extended to travellers from G20 countries arriving at select international airports,” said RBI Governor Shaktikanta Das. (Read More)
UK, EU seek access to India’s public procurement market
Large Indian companies bidding for government tenders will soon be facing foreign competition as India prepares to open up its $500 billion public procurement market as part of free trade agreement negotiations.
Public procurement of contracts worth over ₹200 crore were opened up in the FTA signed with the UAE last year, in a major policy shift by the ruling National Democratic Alliance. And now, every country India is negotiating with, including the European Union, UK and Australia, is gunning for access to the public procurement market. (Read More)
Realty index sheds almost a per cent as most stocks are trading lower in today’s session
Indian rupee remained least volatile among its Asian peers in 2022 and so far this year: RBI Guv
FY23 gross domestic product (GDP) growth estimate increased to 7% from 6.8%
Retail inflation expected to average 5.6% in Q4, core inflation remains sticky: RBI Governor
Dwarikesh Sugar’s long-term credit rating upgraded by ICRA to AA- from A+
ICRA on February 06, 2023 upgraded the long-term rating of Dwarikesh Sugar Industries Limited applicable to bank loans facilities of Rs. 800 crore from [ICRA] A+ to [ICRA] AA-. The outlook on the long-term rating has also been revised to ‘Stable’ from ‘Positive’. Further, ICRA has re-affirmed the rating of Commercial paper facility of Rs. 300 crore of the Company at [ICRA] A1+.
The communication from ICRA reads as follows:
‘Based on a review of the latest developments, the rating committee of ICRA, after due consideration, has upgraded the long-term rating to [ICRA] AA- (pronounced ICRA double A minus) (“Rating”) from [ICRA] A+ (pronounced ICRA A plus). The Rating Committee of ICRA, after due consideration has also reaffirmed the short-term rating at [ICRA] A1+ (pronounced ICRA A one plus).’
RBI’s MPC to remain focused on the withdrawal of the accommodative policy: Das
RBI hikes repo rate
RBI has hiked the repo rate for the sixth time in a row, by 25 bps to 6.50% with immediate effect. Since May last year, the Reserve Bank has increased the short-term lending rate by 225 basis points to contain inflation.
Paytm shares rally for third straight trading day. What’s driving the stock?
Shares of One 97 Communications Ltd (Paytm) surged more than 6% to ₹624 apiece on the BSE in Wednesday’s opening deals after the company shared its business update for the month of January 2023 during which its merchant payment volumes (GMV) stood at ₹1.2 lakh crore, growth of 44% year-on-year (YoY). It disbursed ₹3,928 crore worth of loans for the month of January 2023.
The stock rose for the third straight day after the fintech company posted its first-ever quarterly operating profit as a listed firm and the company’s losses also narrowed during the third quarter of the current fiscal (Q3FY23). Further, major global brokerages have raised target price on the stock after Paytm’s healthy Q3 numbers. (Read More)
Geojit Financial Services on today’s market: The unabated FII selling – ₹7774 crores in the last 3 sessions- is the biggest drag on the market now
Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services: The MPC is likely to raise policy rates by 25 bp today. This is known to the market and is unlikely to have any meaningful impact on the market. The important trends impacting markets globally are the developments in the US economy and rate action by the Fed. Fed chief Powell’s remarks yesterday were taken positively by the market. His comment that the “ disinflationary process will take a bit of time” is taken as confirmation of the disinflationary process underway. Also the fact that the disinflationary process is happening even while the economy is creating a record number of jobs is regarded as positive. The unabated FII selling – ₹7774 crores in the last 3 sessions- is the biggest drag on the market now. In this context traders will also use rallies to sell.
What investors should do now is to buy high-quality stocks in growth segments like banking, IT, capital goods, telecom and cement and bottom-up investing across sectors. Patient investing now will fetch impressive returns in the medium to long term.
Bharti Airtel drags in today’s session after it’s quarterly earnings report couldn’t beat the street estimates
Bharti Airtel’s consolidated net profit missed estimates even as it rose 91% to ₹1,588.2crore for the quarter ended December 2022 from ₹829.6 crore the same quarter last year, but down by 26% from September quarter’s profits of ₹2,145 crore, on the account of exceptional charge of ₹501 crore of license fee of one of the group’s subsidiaries. Revenues also missed estimates, rising by more than 20% on-year to ₹35,804 crore with more 4G customer additions coupled with sustainable growth in postpaid and enterprise segments, and by 3.6% on-quarter from ₹34,526 crore in the September quarter.
Adani Turmoil Prompts Nomura, SMFG to Disclose Fund Exposures
Nomura Asset Management published a note Friday as “reference material” explaining the situation surrounding the Adani group. Volatility in shares and bonds of Adani companies could remain high over the short term because the market is paying close attention to the group’s strategy, fund raising plans, and credit ratings in addition to further reports from Hindenburg, it said.
“We have opted to move quickly to announce facts partly because inquiries to our call center and other channels have notably increased” since late January, said Kuniaki Matsuo, a spokesman at Sumitomo Mitsui DS Asset Management Co. Recent news over the Adani group’s alleged wrongdoings “have the potential to pour water over enthusiasm toward India so we are closely monitoring how broad the impact could become,” he said.
The Sumitomo Mitsui DS Asset fund most exposed to the Adani group is an India bond investment trust where 3.05% is in the conglomerate’s securities, Matsuo said. Among Nomura Asset Management’s disclosure are two Indian bond funds that had a 5% effective ownership ratio in Adani assets as of Feb. 3.
Clients of Mizuho’s Asset Management One Co. have also shown interest in the Adani saga so the company found it important to disclose additional information, said spokesperson Kwiae Lee. More than 50 publicly offered investment trusts managed by the company hold some Adani assets, according to a release. (Bloomberg)
India, IEA to work together to enhance global energy security, stability, sustainability
The government of India and the International Energy Agency (IEA) will work together to strengthen cooperation in the field of data and research and enhance global energy security, stability, and sustainability.
The Petroleum Planning and Analysis Cell (PPAC), under the ministry of petroleum and natural gas (MoPNG), has signed a statement of intent (SoI) with IEA. This partnership will lead to an extensive exchange of knowledge.
The SoI was signed on Wednesday by P Manoj Kumar, Director-General, PPAC, and Fatih Birol, Executive Director, IEA, during the ongoing India Energy Week at the Bangalore International Exhibition Centre. The SoI was signed in the presence of Minister of Petroleum and Natural Gas, and Housing and Urban Affairs Hardeep Singh Puri.
In an exclusive interaction with ANI, Manoj Kumar said, “It is very important day for us, we have signed a statement of intent with the IEA. PPAC has a huge database. It is very unique in critical data as well as the timeliness in petroleum and natural gas. We are going ahead with the petroleum and natural gas and the renewable energy sector. So we need to collaborate with many such international agencies so that we can synergise our effort to have a better reason.” (ANI)
IT index surges at the start on Wednesday as all stocks gain at open
Muthoot Finance’s ₹500 crore-NCD issue to open on Wednesday
The country’s largest standalone gold finance company Muthoot Finance on Tuesday announced a ₹500 crore-debt fund raising through public issuance of secured redeemable non-convertible debentures.
The NCD (Non-Convertible Debenture) issue will be open from February 8 till March 3.
To attract more retail customers, the return is 8.25-8.60 per cent, which is 35-50 basis points more than its last issue, which was the 29th from its stable.
The base issue is ₹100 crore with an option to retain oversubscription up to ₹400 crore aggregating up to ₹500 crore, the company said.
The company’s Managing Director George Alexander Muthoot said the proceeds will be utilised primarily for the on-lending activities. (PTI)
Indices start flat but quickly move to green on Wednesday as Adani stocks gain; Sensex up 200 pts and Nifty 70 pts
Bharti Airtel shares: Should you buy the telecom stock as Q3 net profit rises 92%?
Telecom operator Bharti Airtel Ltd reported an about 92% year-on-year (YoY) rise in consolidated net profit at ₹1,588 crore for the three months ended December 2022, helped by competitive growth across businesses. Its total revenue rose nearly 20% to ₹35,804 crore.
“Premiumisation-led upgrades and stellar execution led Airtel to maintain its industry-leading YoY revenue/EBITDA growth of 20%/26%. Revenue/EBITDA came in line with our estimates, but PAT undershot expectations due to oneoff provisions,” brokerage Ambit Capital said. (Read More)
Sensex preopens flat; all eyes on RBI repo rate announcement with Airtel and Adani stocks in focus
PC Jeweller gets loan recall notices from four banks
PC Jeweller Ltd on Tuesday said four banks namely IDBI Bank, Indian Bank, Bank of India and Karur Vysya Bank, have issued loan recall notices to the company.
In a regulatory filing, PC Jeweller said SBI has initiated recovery proceedings against the company and the matter is now pending before the Debt Recovery Appellate Tribunal (DRAT).
The case filed by SBI was listed before DRAT on Tuesday and the court has fixed the next date of hearing on February 28, it said.
“In this connection, we also submit that the four other banks of the Consortium, namely IDBI Bank, 1ndian Bank, Bank of India as well as Karur Vysya Bank have also issued their loan recall notices to the company,” P C Jeweller said. (PTI)
Stocks to Watch: Airtel, Adani Ports, Hero MotoCorp, ONGC, Vodafone Idea, Bayer CropScience, Adani Green, Astral Pipes, Adani Total, and JK Lakshmi Cement
Adani Power, Adani Wilmar, Equitas SFB, HCL Infosystems, Samvardhana Motherson International, and Piramal Pharma will be among the stocks in focus as they declare their December quarter earnings today. (Read More)
Rupee eyes RBI policy decision, weighs Powell’s comments
The Indian rupee is likely to open little changed to the U.S. dollar on Wednesday, with traders weighing comments from Federal Reserve Chair Jerome Powell and awaiting the Reserve Bank of India’s policy decision.
The non-deliverable forwards indicate an opening of 82.68-82.74 for the rupee, compared with 82.70 in the previous session.
The RBI is widely expected to raise rates by 25 basis points at around 10 a.m. IST. Many economists expect the central bank to signal a pause to the current rate hike cycle, while a few expect a change in stance from the withdrawal of accommodation to neutral.
We doubt RBI will have a major impact on the rupee, a trader at a Mumbai based bank said. If there is a change in stance, it will be negative at the margin for the rupee, more so in the context of what is happening to U.S. yields right now, he added.
Powell said on Tuesday that the robust jobs data released on Friday affirms that the central bank has some way to go on raising rates. The Fed chief doubled down on statements last week that disinflation had begun, saying he expects significant declines in inflation this year. (Reuters)
Adani’s London connection under scrutiny as UK watchdog launches probe: Report
Elara Capital, a London-based company reported to have connections to Adani Group, and the Indian conglomerate itself are being watched by the Financial Conduct Authority (FCA) in the UK.
Although the allegations mostly centre on group firms outside of the UK, the FCA is looking into potential UK connections around Elara, according to sources familiar with the situation who spoke to Financial News.
As former UK prime minister Boris Johnson’s brother Jo leaves his board at the company, the FCA is looking into Elara. On February 1, Jo Johnson announced his resignation as the Adani stock tumbled. (Read More)
Taiwan may join Foxconn in India to fuel chip skills
Foxconn and the Taiwanese government are exploring a partnership that would allow the world’s largest contract manufacturer of electronics to rapidly upgrade the skills of Indians to meet the needs of the semiconductor industry.
The plan is to use Taiwan Education Centres (TEC) across India to train local technology professionals with Foxconn’s proprietary technical material and Mandarin language provided by the TECs, according to people with knowledge of the matter. This mix of technical and linguistic skills would help bridge divides between Indian and Taiwanese companies and talent. (Read More)
Zoom to cut 15% of its workforce; CEO Eric Yuan to take massive 98% pay cut
In the latest addition to tech layoffs, the video-conferencing service Zoom is cutting about 1,300 jobs, or approximately 15 per cent of its workforce.
CEO Eric Yuan said in a blog posted on Tuesday said that the company ramped up staffing during the COVID-19 pandemic when businesses became increasingly reliant on its service as people worked from home.
Yuan said Zoom grew three times in size within 24 months to manage demand. (Read More)
Buy or sell: Vaishali Parekh recommends 3 stocks to buy today
Vaishali Parekh of Prabhudas Lilladher has recommended three intraday stocks for today and here we list out full details in regard to those shares:
1] IRB Infra: Buy at ₹279, target ₹292, stop loss ₹275;
2] Jindal Steel: Buy at ₹570, target ₹592, stop loss ₹560; and
3] Cochin Shipyard: Buy at ₹485, target ₹500, stop loss ₹477. (Read More)
PayU’s LazyPay, IndiaBulls Home Loans, Kissht among websites blocked by govt
Fintech firms LazyPay, IndiaBulls Home Loans and Kissht are among the list of blocked websites issued by the Ministry of Electronics and IT, according to sources.
The government has blocked 232 apps operated by overseas entities, including Chinese, for being involved in betting, gambling and unauthorised loan service.
As per the list, the Ministry of Electronics and IT (Meity) issued to block lazypay.in which is a subsidiary of Dutch investment firm Prosus.
The list includes www.indiabullshomeloans.com operated by housing finance company Indiabulls Housing Finance Ltd and Kissht.com which is operated by RBI registered NBFC firm ONEMi Technology Solutions Private Limited.
Meity issued blocking orders on Saturday based on an emergency request issued by a nodal officer of the home ministry.
“These 138 betting and gambling websites and 94 loan apps were engaging in illegal money laundering and were posing threat to financial security of our nation,” an official source had said.
The other website in the block list include buddyloan.com, cashtm.in, kreditbee.en.aptoide.com, faircent.com, true-balance.en.uptodown.com etc. (PTI)
Ambuja Cements stock under F&O ban on NSE today; Adani Ports out
Only one stock has been put under the ban for trade on Wednesday, February 8, 2023 under the futures and options (F&O) segment by the National Stock Exchange (NSE). The counter has been put on ban under the F&O segment as it has crossed 95% of the market-wide position limit (MWPL), as per the NSE.
Cement maker Ambuja Cements has been added to the list by the stock exchange for today, whereas, ports operator Adani Ports, which was part of the ban in the last few sessions, is out from the list on Wednesday. The NSE updates the list of securities in F&O ban for trade every day. (Read More)
Govt gets 33.44 pc stake in Vodafone Idea post equity allocation
Debt-ridden telecom operator Vodafone Idea on Tuesday approved the allotment of equity shares worth ₹16,133 crore to the government, which post-allocation has become the largest shareholder with a 33.44 per cent stake in the company.
The shares have been allocated to the government in lieu of conversion of interest dues arising from deferment of adjusted gross revenue and spectrum auction payments, the company said in a regulatory filing.
“…it is hereby informed that the board of directors of the company has, at its meeting held today approved the allotment of 16,133,198,899 equity shares of face value of ₹10 each at an issue price of ₹10 per equity share aggregating to ₹161,331,848,990 to the Department of Investment and Public Asset Management, Government of India,” the filing said.
The government cleared conversion of ₹16,133 crore interest dues of debt-ridden Vodafone Idea into equity after receiving a firm commitment from Aditya Birla Group to run the company and bring necessary investment. (PTI)
Bharti Airtel Q3 net profit surges 92 pc to ₹1,588 crore
Telecom operator Bharti Airtel on Tuesday reported a 91.5 per cent year-on-year rise in consolidated net profit at ₹1,588 crore for the three months ended December 2022, helped by competitive growth across businesses.
Total revenue rose nearly 20 per cent to ₹35,804 crore in the third quarter of the current financial year “backed by strong and consistent performance delivery across the portfolio”, the company said in a statement.
Its consolidated net income (after exceptional items) stood at ₹1,588 crore for the just ended quarter, translating into an increase of 91.5 per cent year-on-year.
The consolidated net income (before exceptional items) was at ₹1,994 crore, up 147 per cent compared to the year-ago period.
Bharti Airtel Managing Director Gopal Vittal said the company delivered another quarter of consistent and competitive growth across businesses.
Adani Group mulls independent review after Hindenburg’s criticism
Adani Group is considering an independent assessment into the issues of related party transactions, and others made by US shirt seller Hindenburg, according to the filings.
Adani Group-led by Gautam Adani has been facing the heat after US short-seller Hindenburg Research accused the Adani Group of ‘brazen stock manipulation and accounting fraud scheme over the course of decades.’
“We draw attention to Note 20 to the unaudited consolidated financial results, relating to allegations made by a short seller report on matters involving some of the Adani Group entities, including the Group. The management of the Group is evaluating an independent assessment to look into the issues and compliance with applicable laws and regulations, transaction specific issues, etc,” showed Adani Green’s regulatory filing. (Read More)
RBI likely to hike repo rate by 25 bps today to tame India’s inflation
In its first monetary policy review after the Union Budget 2023, the Reserve Bank of India (RBI) is likely to hike the repo rate by 25 basis points (bps) on Wednesday. The three-day meeting of the Monetary Policy Committee (MPC) started on Monday. RBI Governor Shaktikanta Das is scheduled to announce the MPC decisions today.
More than three-quarters of economists, 40 of 52, expected the RBI to raise its key repo rate by 25 bps to 6.50%, according to a January 13-27 Reuters poll. The remaining 12 predict no change at the February 8 meeting.
With retail inflation showing signs of moderation and remaining below the Reserve Bank of India’s 6 per cent upper tolerance level, and projected slowdown in GDP growth in the next fiscal starting April, experts are of the opinion that the central bank may only opt for a 25 basis points hike in the key interest rate. (Read More)
Wall Street rallies on Tuesday after swerving on Fed chair’s comments
Wall Street rallied Tuesday after the Federal Reserve signaled last week’s stunningly strong jobs report won’t by itself change where interest rates are heading, as some investors had feared.
The S&P 500 climbed 1.3% following a shaky day where stocks pinballed between losses and gains as Fed Chair Jerome Powell gave his first public comments since raising rates last week. The Dow Jones Industrial Average rose 265 points, or 0.8%, while the Nasdaq composite jumped 1.9%.
High inflation and how high the Fed will take interest rates to combat it have been at the center of Wall Street’s wild movements for the last year. Powell said on Tuesday that progress is being made on inflation, though a long battle remains.
That echoed similar comments he made last week, after the Fed approved its smallest increase to interest rates since March. But that was before a jolting jobs report on Friday showed U.S. employers added a third of a million more jobs than expected last month.
The shocking show of strength raised concerns about upward pressure on inflation and worries the Fed may end up keeping rates higher for longer, as it’s been warning. Higher rates can drive down inflation but also hurt the economy and investment prices.
But Powell said Tuesday at the Economic Club of Washington, D.C., that the market’s big moves since the jobs report have gotten it closer to in sync with the Fed’s thinking. Not only did stocks fall, Wall Street raised its forecast for how high the Fed will take rates by the summer. (AP)
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