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Amid geopolitical tensions, rising covid-19 cases, disrupted supply chains, and high inflation, India outshined the world’s major economies with a GDP growth rate of 8.7%, leaving China(8.1%), UK(7.4%), France(7%) and USA(5.7%) behind.
Indian consumers breathe a sigh of relief amid high inflation numbers, as staples like rice and atta showed a much-needed price drop. This comes as an effect of the wheat export ban and the arrival of the summer rice crop. So far this week, crude oil prices have corrected by nearly 5%, which could augur well for the markets in the near term. Inflation, earlier seen as transitory, is now appearing to be stickier and global central banks have tightened their rates. This tightening liquidity has made FIIs pull out ₹1.6 lakh crores from the Indian equity markets. FPI selloff touches ₹44,000 crores in May month alone. The net effect was a major correction in the indices. What comes as a surprise is the demand for shopping and eating out
surged more than in pre-covid days. All eyes are now on the outcome of the RBI’s monetary policy next week.
After a whirlwind of global and economic cues, the major benchmark indices: Nifty and Sensex ended the week on a positive note. Nifty closed Friday at 16,584 showcasing bleak gains of 1.42%, while Sensex was up by a meagre 1.62% ending the week at 55,769.
On the sectoral front, most of the sectoral indices ended on a positive note for the week ending 4th June. Nifty Realty, IT, SmallCap 100, Media, PSU Bank and Nifty Metal showed gains of 4.9%, 4.41%, 4.38%, 3.59% 2.43%, and 2.25% respectively. While Nifty Bank and Nifty Pharma lost 0.95% and 1.98%.
What to Expect from the Markets
–Mr. Abhishek Jain, Research Head, Arihant Capital
Indian markets closed with positive momentum for the third week in a row. IT & realty were the top sectoral gainers in the week, while the Pharma index lost 2%.
The market is expected to take the IMD forecast of a normal monsoon in a positive stride. This week RBI is meeting on Wednesday and is expected to announce a 25-35 bps hike in interest rates. Let this week, we would remain on the sidelines and would add post-event. The Agri theme remains our top pick followed by rural finance play.
–Mr. Ratnesh Goyal, Senior Research Analyst, Arihant Capital
On the daily chart of Nifty, it has taken a support of bullish upward gap area but is struggling to cross 50 days SMA. On the weekly front, it has formed a “Doji” candle formation. We believe the market may consolidate on a higher level and we may see stock specific activity. If it crosses the 16,650 level, it may see a bounce towards the 16,750 and 16,900 levels. On the downside support, if it crosses below 16,450 then it can test 16,200 and 15,950 levels.
On the daily chart of Bank Nifty, it has touched the resistance level of the upward gap area and on the weekly chart, the index is near the short-term moving averages. We believe we may see a short-covering from a higher level. This week Bank Nifty futures closed at 35,373 levels. In the coming trading session if it holds below 35,100 then weakness could take it to 34,700 and 34,300 whereas minor resistance on the upside is capped around 35,900-36,300 levels.
From the Technical Desk
-Ms. Kavita Jain, Head Learning and Senior Research Analyst, Arihant Capital
- Delhivery reported 107% growth in revenues at ₹2,072 crores. Its FY22 revenues stood at ₹7,241 crores in FY22. Express parcel volumes grew by 101%, far outstripping the industry volume growth of ~40%.
- LIC India’s net premium income increased by 18% to ₹1.4 lakh crore. Meanwhile, its net profit declined by 17.41% to ₹2,409 crores. The consolidated net profit of ₹2,371 crores for Q4 was down by 18% from Q4’ 21.
- Sun Pharma Q4 Results: The firm posts a surprise loss of ₹2,277 crores against a net profit of ₹894 crores in the corresponding previous year.
- Mahindra and Mahindra’s Q4 profits zoom 4X. For complete analysis click here.
- Monkeypox infections spread undetected, and cases have risen to over 550 according to WHO.
- Global factory growth has been stunted by war and China’s Covid curbs. S&P’s global Purchase Manager’s Index reports its lowest since Nov 2020.
- Global semiconductor shortage is likely to last through 2023.
- Inflation in the Eurozone hit its all-time high of 8.1%.
- Crude oil prices rose further as the EU decided to cut 90% of oil imports from Russia by the end of 2022.
- GST collection soared by 44% against April to ₹1.4 lakh crore in May.
- GDP growth was at 8.7% for FY 22, while the fiscal deficit stood at 6.7%.
- Q4 GDP comes in at 4.1%, pulled down by the Omicron wave of the pandemic and high commodity and crude prices. Experts anticipate double-digit growth in the June quarter due to a low base.
- Core sector growth in April at a robust 8.4%.
- Tomato prices crossed ₹100 per kg. Recent govt steps to cut inflation by 0.4%
- RBI hikes show up in loan rates, but deposit rates are likely to remain sticky till tepid credit demand and surplus liquidity persist.
- The automobile industry posted its May numbers this week, check out its performance here:
Banking and Finance
- SBI to focus on digital agenda by partnering with fintech firms and NBFCs to drive growth.
- Private sector banks (like HDFC, PNB and ICICI Bank) have increased their lending rates. This will make home, car and other loans costlier.
Energy and Infrastructure
- Tata Projects will build the new international airport in Noida.
- Despite India’s rising power demand, the share of renewable energy rose from 10.2% in April to 14.1% in May.
- PNC Infra secures order worth ₹1,575 crores for a Hybrid Annuity Mode project of NHAI.
- Coal India produced 108.2 million tons of coal over April and May, a 28.8% increase since the same period last year.
- Gail seeks 1 MMT term LNG as demand soars.
- Due to strong demand, the average annual sales of power companies have grown 21% in the last three years despite margin pressures.
- GR Infraprojects rose by 4.3% intraday after its subsidiary received an order worth ₹1,577 crores from the National Highways Authority of India.
- NTPC has started commercial operations at one of its power units with a 660 MW capacity located in Bihar.
- Coal India will import fuel for the first time since 2015, to be ready to import 12 million tons of coal over the next 13 months for power plants.
- NIIF may acquire Ashoka Buildcon for ₹1,000 crores.
IT and Telecommunications
- HCL launches X to power digital engagement with customers.
- Mittal family taps I-banks to ready a $2 billion credit line for Singtel stake.
- MNCs under I-T lens over Esops allotted to staff in India.
- Government allots ₹3,683 crores project to Jio, Airtel for 4G services in uncovered villages.
- Jindal Stainless Ltd supplied 155 metric tonnes of steel to Indian Railways for its stainless-steel foot-over-bridge project in Srikakulam, Andhra Pradesh.
- Nagarjuna Construction Company Ltd. received 3 orders worth ₹6,388 crores in the month of May 2022.
- NMDC recorded iron ore production of 3.20 million tons in May 2022 compared to 2.79 million tons in May 2021.
- Ultratech Cement announced a ₹12,886 crores investment for a 22.6 MTPA capacity increase as competition heats up. This move sent all cement stocks in shock.
- JSW Steel to invest ₹20,000 crores to expand its production by 10 million tons to 36 million tons per annum (mtpa).
- Nestle India retains Zenith for its ₹700 crore media account.
- Cinema halls rake in over ₹4,000 crores in 4 months, and eye a blockbuster 2022.
- Mukesh Ambani and Apollo close in on Walgreens’ Boots buyout.
- Britain’s GSK to buy Affinivax for up to $3.3 billion due to vaccines push.
- Reliance Brands Ltd. (RBL) has entered a JV with Plastic Legno SPA for its India toy manufacturing business.
- DGCA imposes a fine on Vistara for violating takeoff and landing clearance given to first officers without conducting any training.
- Pepsico will invest ₹186 crores in the expansion of the Mathura food manufacturing facility.
- Mukesh Ambani has surpassed Gautam Adani to regain the spot of Asia’s and India’s richest man after Reliance shares traded near record-high levels on Friday.
- Ethos shares make a weak debut on bourses; Shares list at a 6% discount on NSE over its issue price of ₹878. The stock opened at ₹825, and achieved a day high of ₹839 to close at ₹803.
- eMudhra makes a firm debut, and lists at nearly 6% premium over the issue price of ₹256. It opened the day at ₹270, and achieved a day-high of ₹279 to end the opening day at ₹257.
- Aether Industries makes a bumper listing, shares zoom 21% in debut trade over the issue price of ₹642. The stock closed at a day high of ₹774 after opening at ₹704.
- The board of Balaji mines’ material subsidiary, Balaji Speciality Chemicals (BSCL), approved raising funds through an IPO.
- Tata Motor’s EV arm Tata Motors Passenger Electric Mobility acquired Ford’s manufacturing facility in Gujarat.
- Hero Motocorp has postponed the launch of its EV 2W for the second time. The delay was on account of supply constraints amid geopolitical uncertainties.
- SBI and others sell over ₹8,000 crores worth of Suzlon Energy (-7%) loans to REC and IREDA.
- India’s top e-recycler Attero to spend $1 billion to expand as EVs take off.
- Global PE players to finance the EV dreams of electric 2 wheeler makers – Hero Electric, Ather Energy, Pure EV, Simple Energy, TVS Motor, Oben and Ivoomi -with $2 billion funding.
- EV maker Omega Seiki Mobility joins hands with Grip Invest and plans to lease 5,000 electric vehicles by 2023
- Kia India will start local production of EVs in 2025: Tae-Jin Park, India MD
- Jio-bp, MG Motor and Castrol partner to boost electric mobility by setting up a robust EV charging & service infrastructure in the country.
- PE fund Abdul Latif Jameel International (ALJI) to boost the EV foray of Greaves Cotton with a $150 million investment (Rs 1,160 crore) for a 35.8% stake in Greaves Electric Mobility (GEM).
- Svitch MotoCorp to invest ₹100 crores in electric bike project.
- Indian EV makers to soon follow BIS standards for batteries amid fires.
- China leading the world in electric vehicles, and renewable energy says Elon Musk.
- WardWizard lines up ₹650 crores investment to set up Li-ion plant and related infrastructure.
- BGauss Auto to invest ₹40 crores to double electric two-wheeler manufacturing capacity to 2 lakh units per year.
- One in two cars sold will have an electric powertrain by 2030, says a new report.
- MoEVing signs pact with Sona Comstar to develop tech, and design components for comm e-mobility applications.
- Battery service provider Bounce Infinity has joined together with BPCL to deliver electric vehicle batteries.
- West Bengal to introduce 1,200 electric buses in Kolkata.
- Bigger battery metal costs could keep electric cars expensive.
- Convergence Energy Services Ltd (CESL), a subsidiary of public sector joint venture Energy Efficiency Services Ltd (EESL), plans to tender 50,000 electric buses on behalf of states in the next five years.
- National Metallurgical Lab signs a recycling agreement with Puna’s Recy Energy to transfer a breakthrough technology for recycling scrap/waste/used lithium-Ion batteries.
- Welpsun Enterprises has received orders of ₹4,636 crores from BMC for the Dharavi Wastewater Treatment facility.
- Cipla announced the commercial operation of additional capacity of a captive renewable energy power plant in Maharashtra and Karnataka.
- Hero Electric extends its partnership with Zypp Electric to deploy 150,000 e-scooters in the next three years.
That’s all for now folks! See you next week!