Stock Market Live: Sensex, Nifty Off Highs; Banks, It, Metals Jump, Realty Hit
The market reaction is likely to evolve as investors digest the US Fed’s commentary. A global wave of monetary tightening and commodity-fueled price pressures could yet hurt economic growth. Russia is also continuing its war in Ukraine and China’s Covid lockdowns are snarling global supply chains.
Tata Power subsidiary Tata Power Solar secures India’s largest solar EPC order of 1GW worth ₹5500 crore from SJVN: BSE release
LIC’s Record IPO Set to Be Fully Sold as Valuation Drives Demand: Bloomberg
A 210 billion rupee ($2.7 billion) record share sale by state-run Life Insurance Corp. is poised to be fully taken up by investors four days before the offering closes as a low valuation and deep retail discounts drive demand.
By Thursday, the second day of the offering, investors had already put in orders for 79% of the shares for sales in India’s biggest IPO. Around 35% of the total issue is reserved for retail investors and 72% of that tranche was sold 11:55 a.m. in Mumbai, stock exchange data showed.
Demand from LIC insurance policyholders was for almost two-and-a-half times the amount of shares earmarked for them, while employees submitted orders for one-and-a-half times the number of shares available.
L&T bags contract for bullet train project
L&T on Thursday said its construction arm has won a large contract for the bullet train project.
L&T Construction has bagged the project from National High-Speed Rail Corporation Ltd (NHSRCL).
“The railways business of L&T Construction has secured a·contract from NHSRCL to construct 116 route km of High-Speed ballastless track works for Mumbai-Ahmedabad High-Speed Rail (MAHSR) project, popularly referred to as the bullet train project,” the company said in a statement.
As per the company, a contract valued at ₹2,500-5,000 crore is a large order.
Japanese Shinkansen track technology will be adopted in this project.
India, France commit to tackling climate change stronger than ever: joint statement
Axis Securities on Bank Nifty
Bank Nifty has seen increase in Open Interest of 16.20% with decrease in price of -3.17% indicating Short Build Up.
Nifty has seen increase in Open Interest of 26.31% with a decrease in price of -3.23% indicating Short build up.
BANK NIFTY Strategy : – PUT Spread
View: Moderately BEARISH.
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 35,300 strike PUT option and simultaneously selling one lot of 34,800 strike PUT Option.
European stocks rally at open on easing Fed concerns
European stocks rose sharply at the open Thursday after strong gains elsewhere as the Federal Reserve downplayed concerns over aggressive interest rate hikes to tackle soaring inflation.
London’s benchmark FTSE 100 index jumped 1.6% to 7,611.14 points.
In the eurozone, Frankfurt’s DAX index soared 2.3% to 14,291.69 points and the Paris CAC rallied 2.4% to 6,547.67.
Asian stock markets and Wall Street surged overnight after the Fed played down chances of a huge US rate hike in the near future.
Oil climbs higher on supply jitters as EU lays out Russian oil ban
Oil prices extended gains on Thursday on supply concerns as the European Union proposal laid out plans for new sanctions against Russia, including an embargo on crude in six months, offsetting concerns over weaker Chinese demand.
Brent crude futures had climbed 85 cents, or 0.8%, to $110.99 a barrel, while U.S. West Texas Intermediate crude futures rose 65 cents, or 0.6%, to $108.46 a barrel.
Both benchmarks jumped more than $1 a barrel earlier in the volatile session after gaining more than $5 a barrel on Wednesday.
Expect repo hikes in June, August; 75 bps rate hike in FY23 looks imminent: Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI Bank of India
With the current hike of 40 bps in repo rate to 4.40% it seems the rate cycle has made a U-turn (from the steep cuts seen in early 2020) and RBI would continue to increase the rates going forward and may reach the pre-pandemic level of 5.15% by end March 2023. Further, the CRR hike by 50 bps will exert further upward pressure on interest rates while sucking system liquidity by additional ₹87,000 crore. We believe this simultaneous policy announcement of adjusting both the rate and quantum of liquidity is a clever ploy and reinforces the credibility and reputation of central bank. The CRR hike could also open up space for OMO purchases by RBI.
System liquidity remains in surplus, with net durable liquidity at ₹7.2 lakh crore as on 2 May.
Hero MotoCorp sees a bumpy ride in Q4
Automakers are facing the double whammy of rising input costs and subdued demand. In response higher commodity costs, automakers have been resorting to price hikes, but this has weighed on demand. Hero MotoCorp Ltd in its March quarter (Q4FY22) earnings call said it raised prices by ₹1,000 per unit in April which is over and above the significant price hike taken in FY22.
Note that in FY22, even as net realization rose by 11.2% year-on-year (y-o-y), it could only partially offset the y-o-y volume decline of 14.6% in FY22 with standalone revenue from operations falling by 5% y-o-y to ₹29,246 crore. (Read here)
LIC IPO: Day 2 subscription update
Axis Securities maintains BUY on Tata Steel
The stock is currently trading at an attractive valuation of 4.4x 12MF EV/EBITDA, below its 10Y average of 6.3x. We reiterate our BUY rating and value the company using SoTP by assigning a 1-year forward EV/EBITDA based on its geographical segments. We ascribe 6.0x, 5.0x and 3.5x multiple to India standalone, other operations (excl standalone) and Europe on FY24E EBITDA to arrive at a 1-year forward TP of ₹1,700/share (unchanged from our previous TP), implying an upside potential of 35% from the CMP.
Global LNG imports up 4.5% on post-COVID demand surge in 2021: Reuters
Global imports of liquefied natural gas (LNG) grew 4.5% in 2021 from the previous year, supported by a surge in post-COVID industrial demand, especially in China, according to the Paris-based International Group of LNG Importers (GIIGNL).
Global LNG import volumes reached 372.3 million tonnes, a rise of 16.2 million tonnes from 2020, the GIIGNL said in an annual report.
The industry grew only by 0.4% during 2020 due to the COVID-19 pandemic, but the recovery in 2021 still lagged pre-pandemic growth of 13% growth in 2019 and 8.3% in 2018, according to GIIGNL’s previous annual reports.
Auto retail sales grow 37% YoY in April on low COVID-hit base effect: PTI
Automobile retail sales in India rose 37% in April on a low base of COVID-hit year-ago period, automobile dealers’ body FADA said on Thursday.
Total sales across categories rose to 16,27,975 units in April from 11,87,771 units a year ago.
On a year-on-year basis, all vehicle categories including passenger vehicles and two-wheelers were up as compared with April last year.
Passenger vehicles registrations stood at 2,64,342 units last month, up 25% on year.
India Turns to Expensive Foreign Gas to Ease Its Power Crisis: Bloomberg
Sweltering heat and ongoing blackouts are forcing India’s liquefied natural gas importers to top up with expensive shipments.
Torrent Power Ltd. and GAIL India Ltd. bought LNG for May delivery in the last week, with the fuel set to be used to help power plants boost generation, according to traders with knowledge of the matter. The utilities paid about triple the normal spot rate for this time of year, as Russia’s invasion of Ukraine exacerbates a global supply crunch.
The purchases are unusual for India’s cost-sensitive power generators, which tend to avoid buying LNG at such high rates. They illustrate how a domestic coal shortage is forcing the South Asian nation to look for alternative fuels no matter the price, further elevating international demand.
GAIL is seeking at least one more shipment for late-May, the traders said, adding that several other Indian firms are inquiring about cargoes in the bilateral market.
ICICI Bank hikes external benchmark lending rate by 40 bps to 8.10%: reports
Equities should brace for higher and faster rate hikes
Global equity markets heaved a sigh of relief after the US Federal Reserve raised key interest rates by 50 basis points (bps), lower than the feared 75bps increase. One basis point is one hundredeth of a percentage point.
Post the meeting, Federal Reserve Chair Jerome Powell said US central bank officials were not actively considering a 75bps rate hike at coming monetary policy meetings. In reaction, the US equity market saw a relief rally on Wednesday. On Thursday, the Asian markets were largely higher.
Nonetheless, with inflation wrecking a havoc and global central banks determined to tame it, equity markets have to get used to more and quicker rate hikes.
According to James Knightley, chief international economist at ING, the possibility of a 75bps hike at the June meeting is still open. (Read here)
S&P Global India Services Purchasing Managers’ Index rose to 57.9 in April from 53.6 in March
Activity in India’s dominant services sector grew at its fastest pace in five months in April on strong demand, prompting firms to add jobs for the first time since November, a private survey showed, but sky-rocketing inflation remained a major concern.
The S&P Global India Services Purchasing Managers’ Index rose to 57.9 in April from 53.6 in March, its highest since November and surpassing the 54.0 estimate in a Reuters poll.
While the index remained above the 50-mark separating growth from contraction for a ninth straight month, it was the best start to a fiscal year for the sector since 2011/12.
Bank of Baroda hikes repo-linked lending rate by 40 bps to 6.90%: reports
Indian shares climb higher led by auto, IT, banks, metal stocks
Indian equities were higher on Thursday, tracking Asian peers that rose as the Federal Reserve’s less hawkish tone boosted investor sentiment.
Benchmark indexes had closed over 2% lower on Wednesday, having posted their biggest intraday percentage loss since 7 March earlier in the session, after India’s central bank hiked benchmark rate in a surprise move.
At 10am, Sensex was up 502.10 points at 56171.13, and Nifty rose 156.20 points to 16833.80. About 1,996 shares advanced, 822 declined, and 86 were unchanged.
Nifty view: Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel One
Nifty breached the support zone around 16800 on Wednesday and plunged downwards in a decisive manner. In a normal scenario, we would have interpreted this as a ‘Pennant’ breakdown and expected much lower levels; but on this occasion, we refrain from this approach. The rationale behind this is the overall oversold positioning of the market and the move has come after a surprising event. In addition, the global event US Fed meeting is slated and it would be important to see how the market reacts to it as well. Since such developments can be deceptive at times, we would rather hold our horses for a day or two and would assess the overall situation before arriving at any directional view.
For the coming session, 16800 – 16900 have now become immediate hurdles; whereas it would be interesting to see how Nifty behaves around 16600 – 16500.
Yes Securities maintains BUY on Hero MotoCorp
Yet to make inroads into growth segments
With expectation of strong demand recovery in 2Ws (4Q retails for HCML surpassing wholesale), should result in op leverage benefits for the company against near term RM headwinds. This coupled with company’s cost cutting efforts through LEAP savings should result in ~260bp margins expansion over FY22’s B24E. We upgrade our EPS estimate by 1.9%/0.4% for FY23/24 to factor in higher spares and accessories sales. We maintain BUY with revised TP of Rs2,833 (Rs2,825 earlier. Any success on HMCL’s EV strategy can be a key re-rating trigger.
Top gainers/losers on Sensex in opening deals
Nifty opens above 16,800
Sensex opens nearly 500 points higher
Nifty jumps over 1% in pre-open
Sensex jumps over 600 points in pre-open
Market view: Mitul Shah, Head Of Research at Reliance Securities
The markets are likely to see gap up opening, SGX nifty is up 170 points compared to Yesterday’s spot Nifty closing. Nikkei is closed due to holiday while Hang Seng is up 0.3%.
Cognizant reports 11.5% rise in Q1 net profit, posts highest quarterly revenue
Nasdaq-listed Cognizant Technology Solutions Corp’s March quarter net profit rose 11.5% year-on-year to $563 million, on the back of an 11% increase in revenue in constant currency to $4.8 billion – its highest-ever quarterly revenue and fourth consecutive quarter of revenue growth. The company follows a January to December accounting year.
In comparison, for the March quarter, Tata Consultancy Services Ltd’s (TCS) dollar revenue grew 14.3% in constant currency from a year earlier to $6.7 billion, while that of Infosys Ltd grew 20.6% to $4.3 billion. (Read here)
Pfizer makes big R&D push in India
Pfizer Inc. on Wednesday opened a global research centre in Chennai, which will develop and support drugs for the drugmaker’s manufacturing centres worldwide. The facility, located at the Indian Institute of Technology (IIT) Madras Research Park, is Pfizer’s first such centre in Asia and will employ more than 250 scientists and technicians from different specialities. (Read here)
Policy holders, retail investors make a dash for LIC IPO on Day One
India’s biggest initial public offering received a robust response, with retail investors placing bids for nearly two-thirds of the life insurer’s shares on offer on the first day of the share sale despite a stocks selloff.
On Wednesday, Life Insurance Corp. (LIC) of India policyholders, who are eligible for a discount on the sale price, employees and other retail investors subscribed to 67% of the shares on sale. (Read here)
Stocks to Watch
Shares of SBI, Kotak Mahindra Bank, Dabur, Marico, Adani Power, among others, will be in focus today.
Adani Power, Adani Transmission, Dabur India, Marico, Exide Industries, TVS Motor Company, Voltas, Computer Age Management Services, CEAT, Firstsource Solutions, Intellect Design Arena, Procter & Gamble Health, PNB Gilts, are among the companies scheduled to release earnings today
Gold gains 1% as dollar dips after Powell flags inflation risks
Gold prices climbed on Thursday, as the Federal Reserve expectedly raised interest rates by 50 basis points to tackle inflation, which the U.S. central bank highlighted as a risk to the economy while also ruling out larger hikes for the year.
Spot gold was up 0.9% at $1,898.06 per ounce, after rising 1% earlier in the session. U.S. gold futures rose 1.4% to $1,894.20.
The Federal Reserve on Wednesday raised its benchmark overnight interest rate by half a percentage point, the biggest jump in 22 years, and Fed Chair Jerome Powell made an appeal to Americans struggling with high inflation to be patient while officials take the hard measures to bring it under control.
Oil edges up on EU’s proposed Russian oil ban, but weak China data weighs
Oil prices edged higher on Thursday, extending gains from the previous session, as a European Union proposal for new sanctions against Russia, including an embargo on crude in six months, offset concerns over Chinese demand.
Brent crude futures had climbed 35 cents, or 0.3%, to $110.49 a barrel in Asian deals, while U.S. West Texas Intermediate crude futures rose 25 cents, or 0.2%, to $108.06 a barrel.
Both benchmarks jumped more than $1 a barrel earlier in the volatile session after gaining more than $5 a barrel on Wednesday.
The sanctions proposal, which was announced by European Commission President Ursula von der Leyen and needs unanimous backing by the 27 EU countries to take effect, includes phasing out supplies of Russian crude in six months and refined…