Maha-Sena rebels, Blinkit in Zomato’s cart, D-street Bulls are back! | Weekly Market Wrap-up | 26 June
No time to catch up stock market with the events during the week? Here’s your answer: Arihant Capital’s weekly newsletter summarizes all key events you should know before Monday hits us again.
In this article
Prophecies. Politics. Drama. No, we are not talking about Kings Landing, but of Aamchi Mumbai. In case you were not updated with Indian politics this week, you may be wondering why Kangana Raut is suddenly trending again. The actress seemed to have almost prophesied the downfall of the chief minister, Uddhav Thackeray. In a very Game-of-thrones-like turn of events, the Maharashtra government was met with a strong rebellion coming from within. Just as Westeros saw the rise of the faith militants, we see the emergence of the “Shiv Sena Bala Saheb”, now this is too much of a literal coincidence! The question remains, who will sit on the “kursi” in Maharashtra’s game of thrones?
Just missing some popcorn? Order it now from BlinkIt, or may we call it Zomato now? The instant delivery app, Blinkit is all set to be acquired by the food delivery giant for a whooping ₹4,447 crores ($569 million) in an all-stock deal. With this acquisition, Zomato seeks to exploit a fast-growing market for quick grocery delivery.
And finally, after weeks of seeing red, the markets were finally flirting with bullish territory. But even the bullish sentiment couldn’t brush over 3%. Sensex ended the week at 52,728 a 2.66% rise from the previous week, Nifty followed close with a 2.65% positive, ending the week at 15,699.
Among the sectoral indices, Nifty Metal and Oil and Gas played spoilsport to a week otherwise coloured in green.The rally was led mainly by Nifty Auto and Nifty Consumer Durables.
What to Expect from the Markets
What to Expect from the Markets–Mr Abhishek Jain, Head Research, Arihant Capital
Indian markets closed with positive momentum and logged the best week in over a month for the week ended May 20 backed by auto, information technology, banking, and FMCG stocks. We continue to remain our positive stance on the markets. Globally, we believe markets would be eyeing US GDP data and UK retail sales numbers to gauge the market momentum.
📈Market Outlook
–Mr. Ratnesh Goyal, Senior Research Analyst, Arihant Capital
Nifty
The daily chart of the Nifty shows us an upward gap area, while on the weekly chart, the index is still trading below the downward gap area. We believe the market may consolidate further and investors still need to take a cautious approach. If Nifty crosses the 15,750 level it may see a bounce towards the 15,900 and 16,050 levels. On the downside support, if it trades below 15,500 then it can test 15,400 and 15,350 levels.
Bank Nifty
Bank Nifty, where it is still trading below the upward sloping line on the daily chart, while on the weekly chart, it is trading below the downward gap area. We conclude that Bank Nifty may consolidate further, but it will show some strength when compared to Nifty. In the coming trading sessions, if the index trades below 33,450 then weakness could take it to 33,100 and 32,500 whereas minor resistance on the upside is capped around 34,400-34,800 levels.
💰Stock Picks
From the Fundamental Desk
–Mr Abhishek Jain, Head Research, Arihant Capital
Thomas cook looks interesting at current levels. We believe Thomas cook can be added in tranches for the price objective of ₹90 in the next 6 months.
From the Technical Desk
-Ms. Kavita Jain, Head Learning and Senior Research Analyst, Arihant Capital
Options Hub
-Ms. Kavita Jain, Head Learning and Senior Research Analyst, Arihant Capital
Option Strategy
🔎Quick Bites
Global
- UK inflation hit a 40-year high of 9.1% in May. The UK also sees its biggest rail strike in over 30 years.
- The Sri Lankan economy has completely collapsed, leaving it unable to pay for food and fuel imports after months of shortages.
- China hosts BRICS meetings amid rising economic concerns.
- Russian beverage companies are having a gala time knocking off western brands free from trademark restrictions. (Coca-Cola = CoolCola, Fanta = Fancy).
- US economy may narrowly avoid a recession. IMF slashes its growth forecast.
- India takes route with International North-South Transport Corridor (INSTC), the shortest trade route that links India to Iran, Central Asia, Russia, and Europe (finally) took off.
- US has become India’s largest trading partner, exceeding China with bilateral trade reaching USD 119.42 billion.
Economy
- Wholesale inflation in May accelerates to 15.88%. RBI says inflation may remain high (over 6%) till December.
- Droupadi Murmu files nomination papers for presidential election.
- Foreign investors pull out ₹31,430 crores in June so far.
- Maharashtra Power Struggle: Shiv Sena MLAs rebel against Uddhav Thackeray, may form a separate party Shiv Sena Balasaheb
- India is planning to renew its labour laws: As per the new labour code, companies can increase the working hours but would have to give an additional weekly off.
- The rupee hit a record low of ₹78.40 against the US dollar.
- The Reserve Bank of India (RBI) issued a statement banning credit line schemes of non-bank players. Fintech players like Ola Money Postpaid, Jupiter, and Slice have halted their credit line services until further notification.
- A total of 190 deals were signed in India Inc. with a total value of $19 billion. The month witnessed a jump of 58% in deal volumes let by start-up, e-commerce and IT.
Automobile
- Bajaj Auto to consider the proposal for share buyback on June 27.
- Hero Moto is going to hike prices by up to ₹3,000 from July 1.
- Suzuki-Toyota venture to launch a mid-sized SUV in India.
- Italian motorcycle brand Moto Morini announced that it is re-entering the Indian markets.
- Hindustan Motors to sell the ‘Contessa’ brand to SG Corporate Mobility for an undisclosed amount.
Banking and Finance
- Credit, Debit cards in RBI scanner: Card tokenisation applicable till September 30. RBI has given a 3-month extension for banks and NBFCs to implement select provisions related to activating credit cards and their limits.
- RBI has banned fintech companies from loading credit lines on prepaid payment instruments. fintech companies such as Jupiter, Slice, and Lazypay are likely to be affected. Several banks like HDFC, SBI and more offer the BNPL schemes. Banks that provide BNPL facilities are not affected; players like ICICI Pay later, HDFC Flexipay, SBI YONO, HDFC Payzapp and ICICI Pockets are safe for now.
- Apollo Global Management eyes L&T Finance realty loan book with $1 billion deal
- HDFC Life allotted 3,500 debentures for ₹350 crores.
- IIFL Finance is planning to raise debt capital worth ₹5,000 cr by issuing bonds on a private placement basis.
- Shriram City Union Finance will raise up to ₹90 crores via debentures.
- South Indian Bank will seek shareholders’ approval in its upcoming annual general meeting to raise ₹2,500 crores.
- SEBI has allowed mutual funds to resume investing in international stocks.
Energy and Infrastructure
- Coal India to set up a 660 MW thermal power plant in a JV with SECL in the Amarkantak Thermal Power Station in Chachai, Madhya Pradesh with an investment of ₹4,665 crores.
- Dilip Buildcon wins large order worth ₹1,061 crores from Surat Metro Rail Project in Gujarat. The company has also received completion certificates for two road projects in Karnataka.
- Kalpataru Power Transmission and its subsidiary bagged orders worth ₹1,416 crores and ₹874 crores for electric transmission and distribution and the construction of Kanpur metro stations and a data centre respectively.
- Abu Dhabi Investment Authority and Kotak Investment advisors have set up a fund to invest $590 million in Indian office spaces.
- Action Construction Equipment received a contract to set up an assembly plant for the Government of Ghana for $24.98 million.
- Adani Power has completed the acquisition of 100% equity in SPPL and EREPL for about ₹609 crores.
- Adani, Jindal power cos in the race to buy Ind-Barath Thermal
- BHEL signed a $165 million contract with GE Steam Power to supply 3 nuclear steam turbines.
- CBI Books DHFL and others for duping banks of ₹34,615 crores
- GAIL plans to enter distributed LNG production.
- Jindal Power to buy Simhapuri power plant for ₹300 crores.
- L&T bagged 3 new orders worth ₹5,000 crores for its hydrocarbon business.
- ONGC’s subsidiary ONGC Videsh has made an oil discovery in a block in Colombia.
IT and Telecommunications
- Vodafone Idea may approve a proposal to raise up to ₹500 crores.
- Pine Labs has acquired fintech startup Setu in a deal estimated to be worth $70 million.
- The government has extended the telecom industry’s production-linked incentive (PLI) scheme by another year.
- US-based Carlyle Group acquired a 24.4% stake in Airtel’s subsidiary Extra Data.
- Allsec Technologies will merge with Quess Corp in an all-stock deal.
- A rise in metaverse crimes necessitates a regulatory framework governing the Metaverse.
- PwC to acquire Bengaluru-based Venerate Solutions for an undisclosed amount.
- RateGain has been selected by Posadas, Mexico’s largest hotelier, to provide business intelligence solutions.
- Salasar Techno plans to raise ₹200 crores through various modes.
- TCS signed a deal with Aadhar Housing Finance to drive business process transformation.
- Trai may ease spectrum sharing rules.
Industry
- Jain Irrigation Systems said its global irrigation business will be merged with Temasek-owned Rivulis in a deal worth ₹4,200 cr. The integrated entity will have a revenue of $750 million and will lower the consolidated debt of Jain irrigation by 45%.
- KEC International: has bagged new orders worth ₹1,092 crores across various segments.
- Tata Steel Mining has acquired the remaining 10% equity stake in Rohit Ferro-Tech for ₹20 crores.
- Vedanta has offered to sell a copper smelter complex in Tamil Nadu that was closed 4 years ago due to protests. It had the capacity to produce 400,000 tonnes per annum
Other
- Air India plans to add more than 200 planes to its fleet in 4-5 years
- Aurobindo Pharma acquired a 51% stake in GLS pharma.
- Blinkit on Zomato’s plate for ₹4,447crores.
- CCI has approved the acquisition of AirAsia by Air India
- Dr Reddy’s Labs acquires Eton Pharma’s injectable items portfolio for $50 m. It will also receive $72 million in a patent dispute.
- AC’s to get more efficient and more expensive due to the new energy rating rules.
- Apollo Hospitals partners with Imperial Hospital to oversee a 375-bed hospital in Bangladesh.
- Shree Cement to set up an integrated cement plant in Guntur, Andhra Pradesh.
- Nykaa may acquire the local discovery platform LBB (Little Black Book).
- Vadilal Industries’ subsidiary will buy a 100% stake in US-based Krishna Krupa Corp.
🔌Sustainability Corner
- Tata Power gearing up to build pan-India electric vehicle charging stations.
- Multi-brand EV showrooms gaining popularity.
- Now Tata Nexon EV catches fire in Mumbai, a detailed probe is being conducted.
- Omega Seiki Mobility announced the opening of its fourth manufacturing facility at Chakan, Pune. With an investment of close to ₹190 crores, the unit will have a production capacity of 6,000 electric 3W annually before ramping up to 30,000 units.
- Sun Mobility and Amazon India launch a battery swapping network for EVs in Mumbai. Sun Mobility plans over 2000 swapping points across Maharashtra by 2025.
- Bharat Forge consolidates EV business under Kalyani Powertrain Limited (KPL).
- OTPP in Talks to Buy 49% Stake in Mahindra Susten.
- Tata Chemicals Europe has opened the UK’s largest carbon capture and usage plant.
- Foxconn Chief takes up plans to make EVs in India.
- High carbon emitters may get sops to curb footprint.
That’s all for now folks! See you next week!
Also Read: India’s Hottest Startup IPO – Zomato
