In this Weekly Market Newsletter:
- Market wrap-up & what to expect next week
- Market Outlook: Technical Nifty & Bank Nifty Outlook
- Quick Bites: Key headlines of the week
- Key Results
- IPO Corner
- Electric Vehicles & Sustainability Corner
Nifty corrected 0.81% during the week closing at 17,374.75 while the 30-share BSE Sensex declined 491.90 points, or 0.84%, to 58,152.92 for the week ended February 11.RBI unveiled its quarterly monetary policy during the weekend kept its key interest rates unchanged, which gave markets some breather.
On the sectoral front, Oil &Gas and realty witnessed maximum pressure while gains were seen in Nifty Metal, which ended the week up 3.33%. Tata Steel emerged as the top gainer in the index gaining 6.64% during the week followed by Coal India (up 3.80%), Hindalco (up 3.34%), IndusInd Bank (up 2.76%), and NTPC (up 2.20%). On the other hand, HDFC Life Insurance, Tata Consumer Products, Larsen & Toubro, SBI Life Insurance Company, Tata Consultancy Services, and HDFC each declined by over 3%.
What to expect from the markets? by Mr. Abhishek Jain, Arihant Capital’s Research Head
With global uncertainty on the cards with the Russia-Ukraine conflict, the tension in Europe, and the hottest inflation in four decades in the USA (signaling aggressive rate hikes), markets are going to stay volatile with a downward bias. However, we believe value stocks with stronger balance sheets will do better going forward.
Automobile stocks with a focus on the two-wheeler segment and financials can be added on a selective basis. Even some domestic pharma stocks can be added on weakness. Maintain adding Ujjivan financials, Indostar, and LIC housing on weakness. For long-term investors, Ujjivan Financials, which is the holding company of Ujjivan SFB, can be added for a price objective of ₹250. Whirlpool also looks interesting and can be added with a price objective of ₹2,600.
For risk-averse investors, or if you can’t find value stocks, sitting on cash can be the best strategy at the moment.
🔭 Market Outlook
If we look at the daily chart of the Nifty, it can be seen that the index is struggling to cross short-term moving averages. On the weekly front, it made a formation of a “Doji” candle. On the charts, the Nifty is showing some pressure at a higher level. It has to cross the 17,450 levels to see a bounce towards 17,600 and 17,750 levels, while on the downside support if it crosses below 17,200 then it can test the 17,050 and 16,800 levels.
Bank Nifty Outlook
On the daily chart of Bank Nifty, it is trading above the short-term moving averages while on the weekly chart “Doji” candle formation is visible. If both the data are combined and analyzed, then Bank Nifty may consolidate further and may show pressure from a higher level. This week Bank Nifty closed at 38,441 levels. In the coming trading session if it holds below 38,200 then weakness could take it to 37,800 and 37,500 whereas minor resistance on the upside is capped around 38,900-39,200 levels.
📺 Quick bites
Few Headlines That Should Be on Your Radar
- NTPC’s 4.88 MW power generation capacity is now commercially operational at its Fatehgarh Solar PV Project at Jaisalmer, Rajasthan.
- Domestic air passenger traffic fell around 43% month-on-month to 64 lakh in January 2022.
- RBI kept the rates unchanged, leaving repo rate at 4% and the reverse repo rate at 3.5% during this quarter’s monetary policy.
- Some buyers who submitted Expression of Interest (EOI) in buying a stake in BPCL as part of its privatization have reportedly withdrawn their offers.
- Equity mutual funds recorded an inflow of ₹14,888 crore in January – making it the 11th straight month of net inflow. This month’s inflow, however, was lower than the₹25,082 crore recorded in December. Debt funds recorded a substantial shift as they recorded a ₹5,087 crore inflow as compared to an outflow of around ₹49,038 crore in December.
- DB Realty has approved to raise funds via issue of 5 crore warrants convertible into equity shares.
- Total automobile sales in January 2022 have seen a year on year (YoY) decline of 23.2% yoy, said the Society of Indian Automobile Manufacturers (SIAM).
- L&T’s construction arm has bagged a ‘significant’ order to construct hi-tech IT parks at eight locations across Bangladesh.
- Airtel plans to hike its tariff this year. The company’s board has approved raising up to ₹7,500 crore in debt instruments.
- DCB Bank will invest up to ₹25 lakhs to acquire 5.95% in Kaabil Finance Private Limited, a Rajasthan based Non-Banking Financial Company (NBFC).
- RBI has increased the limit for Foreign Portfolio Investors (FPIs) to invest in India’s debt market to ₹2.5 lakh crore from ₹1 lakh crore earlier.
- Glenmark to sell its nasal coronavirus treatment spray for ₹850.
- Linde India has signed a 15-year long-term agreement with ESL Steel for supply of 800 tonnes per day of oxygen and 900 tonnes per day of nitrogen.
- 😐 Airtel reported a 2.8% decline in its consolidated net profit to ₹830 crore for 3QFY22. The company had recorded a net profit of ₹854 crore in the same period a year ago. Consolidated revenue increased by 12.6% to ₹29,867 crore, from ₹26,518 crore in the December 2020 quarter.
- 😐 Hero MotoCorp net profit declined 36.73% to ₹686.13 crore while its revenues tanked 19.36% to ₹7,883.27 crores yoy.
- 😊 PowerGrid Corporation’s consolidated net profit falls 2.21% to ₹3,292.97 crore yoy. Revenue from operations increased 3% to₹10,446.88 crore yoy. The company announced a second interim dividend for the current fiscal at ₹5.5 per share.
- 😊 Mahindra & Mahindra reported standalone net profit at ₹1,353.07 crore, up 154.88% yoy. Revenue from operations for 3QFY22 stood₹15,238.82 crore, up 8.41% against ₹14,056.54 crore in the year-ago period.
- 😞 Recently listed, Nykaa reported a 59% yoy fall in its net profit to ₹28 crore for 3QFY22.
- 😊 Hindalco reported a net profit of ₹3,675 crore for 3QFY22, a rise of almost 96% yoy. Revenue from operations stood at ₹50,272 crore, up 44% yoy.
- 😊 Divi’s Laboratories reported a consolidated net profit at ₹902.24 crore for 3QFY22, up 91.71% yoy. Revenue from operations stood at ₹2,493.24 crore, up 46.53% yoy.
🚀 IPO Corner
- Kids Clinic India has filed its draft papers for an IPO to raise Rs 1,200 crore.
- Vedant Fashions Limited IPO was subscribed 2.57 times at the end of Day 3 of bidding.
- Adani Wilmar Ltd made a weak debut on Dalal street. The Company listed at Rs 221 on BSE, a discount of 3.90%, over its issue price of Rs 230 but recover later to settle with over 16% gain.
🔌EV and Sustainability Corner
Key sustainability news from India Inc includes renewable energy, net-zero commitments, electric vehicles.
- Telangana State Renewable Energy Development Corporation has signed a memorandum of understanding (MoU) to setup EV charging stations at the existing Indian Oil retail outlets.
- Mahindra announces electric cars, to challenge Tata Motors, launch in July 2022. The company is foraying into electric four wheeler segment for the first time. The company wants to launch cars in the affordable segment and also introduce a compact electric-SUV. The company is also converting its favourable SUV XUV300 into electric.
- PG Electroplast will acquire a 10.1% stake in Solarstream Renewable Services.
- ReNew Power has set up Gujarat’s first wind-solar hybrid project at the Chlor-Alkali unit of Grasim Industries Ltd in Vilayat, Bharuch.
- Delhi government to guide residential colonies on electric vehicle charging. The guidebooks have been prepared by Dialogue and Development Commission of Delhi (DDC) and World Resource Institute (WRI) India.To strengthen the network of electric vehicle (EV) charging stations, the Delhi government is targeting office building complexes, shopping malls, residential colonies and group housing societies in the city.
- Government agencies using 5,384 electric vehicles, says Nitin Gadkari. The maximum number of electric vehicles were used by local authorities (1,352), followed by government undertakings (1,273) and state governments (1,237).
- Bengaluru-based commercial electric vehicle maker Altigreen raises Rs 300 croresin Series-A funding led by Sixth Sense Ventures, Reliance New Energy, othersXponentia Capital, Accurant International, USA and Momentum Venture Capital, Singapore.The company raised funds for capacity expansion, new products launch and to develop a pan-India network.
- Twenty applicants, including Hyundai, Kia, Suzuki, Bajaj, and Ola Electric, have been approved under the “Champion OEM Incentive Scheme” of the Production Linked Incentive (PLI) Scheme.
- Kinetic Engineering to focus on EV segment; to make chassis, gearboxes for such 2, 3-wheelers.
That’s all for this week’s market wrap-up. We will be back with new market insights next week!