Stock Market LIVE: Indices in red, Sensex down 300 points; Auto, FMCG lag
Markets mostly closed in red on Tuesday along with Wall Street where stocks fell in a volatile session. The market selloff comes amidst US-China tension and investors trying to assess the outlook for the global economy. Investors monitored US House Speaker Nancy Pelosi’s movements as she landed uneventfully in Taiwan in the widely-anticipated stop on the trip that has angered China.
Tokyo stocks closed higher on Wednesday
Tokyo stocks closed higher on Wednesday as investors snapped up shares with strong corporate earnings while watching the impact of US House Speaker Nancy Pelosi’s visit to Taiwan.
The benchmark Nikkei 225 index added 0.53%, or 147.17 points, to 27,741.90, while the broader Topix index rose 0.27%, or 5.28 points, to 1,930.77.
IT companies tap gig workers as high attrition rates bite
India’s information technology companies are expanding their talent pool by hiring freelancers, project-based workers, independent contractors, and part-time hires as they battle high attrition levels in an industry experiencing a covid-induced boom in demand.
India currently has more than 15 million freelance workers deployed on tech projects, according to a June 2022 Assocham report, which forecast the domestic gig economy to grow 17% to $455 billion by 2024. (Full Report)
Sri Lanka to restart bailout talks with IMF in August – president
Sri Lanka’s new President Ranil Wickremesinghe told parliament on Wednesday that talks with the International Monetary Fund (IMF) for a bailout package would restart in August, as the country wrestles with its worst economic crisis in decades.
“We are confident of successfully completing discussions,” Wickremesinghe said in a speech, in which he also called on lawmakers to come together to form an all-party government.
Wickremesinghe took office last month after his predecessor, Gotabaya Rajapaksa, fled the country and then quit following mass protests over his mishandling of the economy.
SpiceJet promoter Ajay Singh mulls stake sale, say sources
SpiceJet promoter Ajay Singh is mulling the possibility of a partial stake sale in the airline, according to sources. Singh currently reportedly holds a majority 60 per cent in the airline said the company continues to be in discussions with various investors to secure financing.
“The company continues to be in discussions with various investors to secure sustainable financing and will make appropriate disclosures in accordance with applicable regulations,” a SpiceJet spokesperson said.
Maruti Suzuki stock under pressure, down 2%
India’s July services growth slips to 4-month low as inflation stays high
Growth in India’s dominant services industry slowed sharply in July, squeezed by high inflationary pressures and weaker demand, leading to a further fall in business expectations, a private survey showed.
The S&P Global India Services Purchasing Managers’ Index sank to 55.5 in July from 59.2 in June, its lowest since March and below the Reuters poll expectation of 58.5.
But the index has been above the 50-mark that separates growth from contraction for a year and July’s reading was higher than the long-term average.
A few thoughts on Nifty (Technical and Derivatives)
Tirthankar Das, head of technical research, Ashika Group: On the oscillator front, there is still no signs of exhaustion, or any reversal signal are being unfolded. On the contrary, Weekly RSI clocked breakout from 6 months falling trend line indicating long-term positive bias. The psychological level of 17000 which further coincides with the 200dma would be the immediate short-term trend deciding level for the market. On the upside, the elevated target level for Nifty is around 17500 (being 80% retracement of two-month decline (18100-15183). Hence, though index is likely to open on a subdued note today, intraday support around the levels of 17150 is likely to provide cushion for the Index.
Sameet Chavan, chief analyst-technical and derivatives, Angel One Ltd: Technically, the bullish momentum remains unchanged with the daily gains in the broader market. We allude to our previous commentary of not being complacent and staying watchful as the index showcased some lackluster moves in yesterday’s session that might attract a round of profit booking. However, the undertone is set in favor of the bulls, and any minor correction could be seen as an opportunity to go long in the index. As far as levels are concerned, the 17450-17500 odd zone is expected to act as an immediate hurdle for the index. On the contrary, 17200 is expected to cushion any minor correction, while the unfilled gap around the 17000 mark holds the sacrosanct support zone for the index.
Going forward, we might expect significant traction outside the indices in the broader market space. Hence, it’s advisable to keep focusing on such potential movers, which are likely to provide better trading opportunities. Meanwhile, keeping a close tab on global and domestic macro developments is advisable.
Rain shortage may dampen India’s battle against inflation – here’s why
At a time when nations are struggling with skyrocketing food prices and rife inflation, India’s ability to produce rice is in danger. Due to a shortage of rainfall in some areas, particularly West Bengal and Uttar Pradesh, which account for a quarter of India’s output, the total area planted with rice has decreased by 13% thus far this season.
With Bangladesh, China, Nepal, and certain Middle Eastern countries among its top clients, India exports rice to more than 100 countries. In the upcoming weeks, the US is expected to produce a bountiful harvest of wheat, and Ukraine has sent its first grain shipment since Russia’s invasion. (Full Report)
Rakesh Jhunjhunwala portfolio auto stock falls for 2nd straight day. Should you buy, hold, accumulate?
Shares of Escorts plunged for second straight day as the company reported a muted performance for Q1FY23 as its standalone net profit declined to ₹147.5 crore in the first quarter ending June 2022 as compared to ₹185 crore in the year-ago quarter while EBITDA margins for the quarter came in at 10%, down 307 bps from the previous quarter. (Full Report)
Zomato drops in Mumbai as stake matching Uber’s put up for sale
Shares of India’s Zomato Ltd declined as an undisclosed shareholder offered to sell 612 million shares at a discount, a stake matching that held by Uber Technologies.
Zomato fell as much as 9.5% in Mumbai shortly after opening on Wednesday, before paring the drop to 1.6% at 54.65 rupees as of 9:55 a.m. local time.
The selling shareholder in the block trade offered the stock at between 48 rupees and 54 rupees a piece,
Reliance Securities’ Stock in Focus: JK Tyres
STOCK IN FOCUS
JK Tyres (CMP Rs.130)
In view of the strong products basket, regular price hikes, likely revival in replacement demand, healthy export potential and margin expansion in India as well as Mexico operations, we reiterate BUY rating on JKT with a 1-Year Target Price of Rs150, valuing the stock at 8.5x FY24E EPS.
BAJAJ-AUTO (PREVIOUS CLOSE: 3996) SELL
For today’s trade, short position can be initiated in the range of ₹4050-4070 for the target of Rs.3950 with a strict stop loss of ₹4110.
BIOCON (PREVIOUS CLOSE: 311) BUY
For today’s trade, long position can be initiated in the range of ₹305- 308 for the target of Rs.315 with a strict stop loss of ₹301.
HINDALCO (PREVIOUS CLOSE: 418) SELL
For today’s trade, short position can be initiated in the range of ₹422- 426 for the target of Rs.410 with a strict stop loss of ₹430.
Telangana bets big on oil palm to cut $19 billion vegetable oil imports
Pullarao Daravathu and thousands of fellow farmers from Telangana in India’s south are busy planting oil palms as their home state aims to add more area under the controversial crop within four years than the entire country has in decades.
Telangana is targeting 2 million additional acres under oil palm cultivation in the next four years, and is going to great lengths to achieve this goal – from building large dams and irrigation canals to importing millions of germinated sprouts. (Full Report)
Indian rupee flat at open as dollar climbs
The Indian rupee was little changed on Wednesday after opening slightly higher versus the dollar as a strengthening greenback countered gains from portfolio inflows to local markets.
The currency was trading at 78.7125 by 0335 GMT, which was at the same level as its close on Tuesday. It did however pop to a 78.68 at the open.
IT stocks rally. Index up 1%
Sensex and Nifty are showing restraint at open on Wednesday and are trading flat.
Bharti Airtel and Reliance gain at the start, while Kotak Bank is down.
Stocks to Watch: ONGC, Reliance, Bank of India, Adani Green Energy, ITC
Adani Power, Adani Wilmar, Godrej Consumer Products, Gujarat Gas, Vodafone India, and BASF India will be in focus as they declare their June quarter earnings today. (Full Report)
Sensex pre-opens flat. SGX Nifty and most Asian markets are trading in green on Wednesday
Oil Steadies as OPEC+ Decision on Production Takes Center Stage
Oil steadied before an OPEC+ meeting as traders wait to see whether the group will heed or snub a US call to boost crude supplies.
West Texas Intermediate was little changed near $95 a barrel after erasing an early drop of 1%. The Organization of Petroleum Exporting Countries and its allies convene virtually later Wednesday, and a Bloomberg survey of traders and analysts suggested the alliance led by Saudi Arabia was more likely to keep output steady in September than agree on an increase.
Zomato shareholder seeks up to $420m from block deal. Details here
An undisclosed shareholder of India’s Zomato Ltd. is seeking to raise as much as $420 million through a block sale, according to terms of the deal seen by Bloomberg News.
The Zomato shareholder is offering 612 million shares at between 48 rupees and 54 rupees each, the terms show. That represents a discount of between 2.8% and 13.6% to the stock’s closing price on Tuesday. At the bottom of the range, the holder would raise about $373 million. BofA Securities is the sole bookrunner. (Full Report)
China imposes economic curbs on Taiwan with sand, fruit bans
China halted some trade with Taiwan in retaliation to the high-profile visit of US House Speaker Nancy Pelosi to the island.
China’s General Administration of Customs said in a statement Wednesday that some fish and fruit imports were suspended due to excessive pesticide residue detected “multiple times” on products since last year, as well as some frozen fish packages that tested positive for coronavirus in June. The Ministry of Commerce said in a separate statement it banned natural sand exports based on provisions of related law, but gave no further details.
Beijing has often targeted Taiwan’s agricultural industry for punishment over political issues. Many of southern Taiwan’s fruit-producing regions are typically bastions of political support for President Tsai Ing-wen’s Democratic Progressive Party, which advocates for Taiwan’s formal independence.
Govt adopting targeted approach to tame inflation, says FM Sitharaman
Finance Minister Nirmala Sitharaman on Tuesday said the government has adopted a targeted approach, based on ground-level inputs, to tackle retail inflation which is ruling at around 7 per cent.
The minister was replying to a short-duration debate on price rise in the Rajya Sabha.
Sitharaman stressed that the fundamentals of the Indian economy are strong.
Indian economy compared to the situation prevailing in peer-group nations and even developed countries is definitely “much better”, she said.
However, the minister also acknowledged that global factors are impacting the economy, and said “these are realities”.
Adani says 5G foray is first step toward integrated digital infra
Adani Data Networks, the digital connectivity solutions arm of the Adani Group, has acquired the right to use 400MHz of spectrum in the 26GHz band to enter the industrial 5G space.
The group said the 5G spectrum is expected to help create a unified digital platform that will accelerate the pace and scale of digitization of the group’s core infrastructure, primarily its industry and B2C business portfolio.
Akasa Air is set to start flights on the Chennai-Mumbai route from 15 September
The new carrier is scheduled to launch commercial flight operations on 7 August by running its first service on the Mumbai-Ahmedabad route. Further, the airline will start services on the Bengaluru-Kochi route and Bengaluru-Mumbai route from August 13 and August 19, respectively.
Govt eases imported coal blending norms for power producers
The government has relaxed norms for blending of imported coal by power generation companies and allowed states and independent power producers to import the fuel as per requirements.
The government has left on states and Independent Power Producers (IPPs) as well as the coal ministry to decide the percentage of imported coal for blending purpose.
The move came after power ministry reviewed the coal stock in the country.
SpiceJet: DGCA receives de-registration request for Boeing 737-800 aircraft
SpiceJet’s lessor, Alterna Aircraft Ltd, located in Ireland, has urged the Directorate General of Civil Aviation (DGCA) to de-register its aircraft. In its Monday appeal to India’s aviation regulator, Alterna did not state why one of its Boeing 737-800 planes should be deregistered.
Recently, SpiceJet has been in the news due to a number of events involving technical difficulties on its flights. Additionally, the Indian aviation authority was asked to deregister three of SpiceJet’s aircraft by one of its lessors with a base in Dubai.
Rupee jumps 53 paise to breach 78 level, closes at 1-month high on FII inflows
The rupee rallied 53 paise — its best single-day gain in over 11 months — to close at an over one-month high of 78.53 against the US dollar on Tuesday.
Persistent foreign fund inflows into capital markets, softening crude oil prices and a weak US dollar in the global markets boosted the local currency.
The rupee, which plummeted to a lifetime low of 80.06 last month, made a spirited recovery in the past four sessions as FIIs returned to capital markets and crude oil prices fell below USD 100 per barrel mark.
India’s exports fall marginally to $35.24 billion in July
India’s merchandise exports declined marginally to $35.24 billion in July 2022 as compared to USD 35.51 billion recorded in the same month last year, as per the government data released on Tuesday.
This has been achieved despite measures to control inflation (iron ore and pellets, iron and steel, petroleum products, etc.) and the continued disruptions of supply chains due to COVID and the Russia-Ukraine conflict, the Ministry of Commerce and Industry said in a statement.
India’s merchandise export in April-July 2022-23 was USD 156.41 billion with an increase of 19.35 per cent over USD 131.06 billion in April-July 2021-22.
India doing ‘much better’ than its peers: Nirmala Sitharaman
Finance minister Nirmala Sitharaman on Tuesday said that the Indian economy is in a much better condition to compared to other economies in its peer group and many developed countries.
In her reply during a discussion on price rise in the Rajya Sabha, Sitharaman said that the macro economic fundamentals of the country are strong. She also cited the loans sought by Bangladesh, Sri Lanka, Pakistan from International Monetary Fund (IMF) to highlight the better economic condition of India. (Full Report)
Centre raises windfall tax on domestic crude, cuts duty on diesel exports
The union government has raised the windfall tax on sale of locally produced crude oil to ₹17,750 per tonne. For the past two weeks, the sale of crude oil produced in India attracted an additional duty of ₹17,000 per tonne.
Centre has also revised the cess on export of diesel downwards to ₹5 per litre from ₹11 per litre, while the cess on export of aviation turbine fuel (ATF) has been scrapped. For the past two weeks since the last revision, ATF exports attracted an additional duty of ₹4 per litre.
Tokyo shares open higher with eyes on US-China tension
Tokyo stocks opened higher Wednesday, as investors snapped up shares with strong corporate earnings while monitoring the impact of US House Speaker Nancy Pelosi’s visit to Taiwan.
The benchmark Nikkei 225 index added 0.34 percent, or 94.72 points, to 27,689.45 in early trade, while the broader Topix index rose 0.17 percent, or 3.26 points, to 1,928.75.
The dollar stood at 133.46 yen, compared with 133.10 yen on Tuesday in New York.
Wall Street dips, dollar gains on economic, geopolitical concerns
U.S. stocks ended a choppy session lower on Tuesday, while the dollar rallied as risk appetite was dampened by economic uncertainties and escalating U.S.-China tensions.
All three major U.S. stock indexes closed red, with the blue-chip Dow faring worst. Economically sensitive transports underperformed the broader market.
Meanwhile, the safe-haven greenback had a better day than most asset classes, jumping 0.8% against a basket of world currencies.
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