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Indian Stocks Stay Volatile and Close in Red as Budget Nears

Indian Stocks Stay Volatile and Close in Red as Budget Nears


Both Sensex and Nifty lose during the week on negative global cues. Nifty closed the week with a 2.92% loss ending at 17,102 down 551 pts while the barometer index, the S&P Sensex ended the week at 57,200. On a week-on-week basis, Sensex declined 1837 pts or -3.11%. While Bank Nifty recovered to a 0.31% gain, during the week, ending at 37,689. FII continues to remain a large seller in the market and domestic flows and retail supporting the market.

On the sectoral front, all the sectoral indices ended on a negative note except PSU BANK for the week ending 28th Jan, with the Nifty IT Index clocking the highest loss at 6.11% followed by Nifty Realty loss of 5.20% and Nifty Metal loss of 4.43%. While Nifty PSU gains 6.91% during the week.

From the fundamental desk: Markets this week All eyes would be on the budget next week with no major expectations in tax changes. With the budget on cards and FIIs remaining net sellers, expect some volatility next week. We believe the insurance sector can be in limelight ahead of LIC IPO in March. Keep the following stocks on your radar and can be added on the downside – HDFC life, Max Financial Services Ltd (MFSL), SBU Life, and ICICI Prudential Life Insurance. Indostar, Ujjivan financials, Satin, and TFCIL are great picks at current levels. ITC offers great value at current levels. As always, you must be very selective about the stocks you pick.

🔭Market Outlook

Nifty Outlook  
On the daily and weekly charts of Nifty, one can see that it is trading below the short-term moving averages. Given the upcoming budget, volatility is on the cards. Now, if the Nifty crosses the 17,220 level, you can see a bounce towards the 17,400 and 17,550 levels. On the downside support, if it crosses below 16,920 then it can test 16,800 and 16,650 levels.

 Bank Nifty Outlook

On the daily chart, Bank Nifty is trading above the short-term moving averages while on the weekly chart “Doji” candle formation is visible. When you combine both the data points, Bank Nifty indicates strength compared to Nifty. This week Bank Nifty closed at 37,800 levels. In the coming trading session, if it holds below 37,500 then weakness could take it to 37,100 and 36,500 whereas minor resistance on the upside is capped around 38,550-39,000 levels.

Stock Recommendations

Technical Stock Picks from Kavita Jain’s Desk BUY NTPC CMP 140; TGT 150/152; SL 135 Stock is forming Higher High -Higher Low formation on the weekly chart. After a week halt counter is witnessing to continue its impulse move in a northward direction and has formed a long green candle with decent volume above all its important moving averages. RSI is also showing further price strength.

📺 Quick bites

Few Headlines That Should Be on Your Radar
  • IMF cuts India’s GDP forecast for FY22 to 9% from 9.5%.
  • Bharti Airtel to issue 7.1 crore shares to Google on a preferential basis, at ₹734 per share. Google will invest $700M to acquire 1.28%* ownership in Airtel and up to $300M toward potential multi-year commercial agreements as part of their partnership to accelerate the growth of India’s digital ecosystem.
  • Vodafone Idea may go for another tariff hike this year.
  • BPCL to invest ₹10,000 crores in six new city gas licenses in the next 5 years
  • Hero MotoCorp’s board has approved to invest up to ₹700 crores in Hero FinCorp Ltd (HFCL).
  • PMC Bank branches started operating as branches of Unity Small Finance Bank (USFB) on January 25, 2022.
  • Zomato, the food-delivery platform listed in 2021, has decided to foray into the financial services business and has decided to create a non-banking finance company.
  • Sterlite Technologies has bagged a multi-year order of about ₹170 crores to build a unified network management system for the Power Grid Corporation of India.
  • Glenmark Pharmaceuticals’ US-based unit has received approval from the US health regulator to market Metronidazole Vaginal gel, in the American market
  • The US Federal Reserve on Wednesday said it is likely to hike interest in March 2022.
Key Results:
  • 😊LIC’s net profit zooms to ₹1,437 crores in the first half of FY2022 ahead of IPO, compared to just ₹14 crores in the year-ago period.
  • 😞Larsen & Toubro (L&T), reported a 17% decline in consolidated net profit to ₹2,055 crores in Q3FY22. Its revenues grew 11% YoY to ₹39,563 crores, with the infrastructure segment contributing the highest followed by IT & technology services and the hydrocarbon business.
  • 😞Maruti Suzuki’s net profit falls 48% year-on-year to ₹1,011 crores for the Q3FY22 quarter. Revenue was down 1% at ₹23,246 crore y-o-y.
  • 😊Axis Bank’s net profit rose 224% to ₹3,614 crores for Q3FY22. This is a 224% rise from the same quarter during the previous period. Net interest income was up 17% to ₹8,653 crores. Net NPA ratio fell to 0.91% from 1.19% when compared to last quarter.
  • 😞Cipla’s consolidated net profit declined 2.61% y-o-y to ₹729 crores. Revenue rose 5.6% y-o-y to ₹5,479 crore.
  • 😊 Dr Reddy’s Laboratories consolidated net profit jumps to ₹50 crores in Q3FY22 from ₹19.80 crores in Q3FY21. The company’s revenue from operations rose 7.91% to ₹5,319.70 crores in Q3 December 2021 over.
  • 😞Britannia Industries net profit falls 18% y-o-y to ₹18 crores in Q3FY22. its total revenue from operations was up 12.93% to ₹3,574.98 crore
  • 😊Kotak Mahindra Bank’s net profit increased by 15% to ₹2,131.36 crore in Q3 FY22 y-o-y. The bank’s total income in the third quarter rose by 4% Y-o-Y to ₹8,260.48 crores.
  • 😞Finolex Industries’ net profit declines 30.5% y-o-y to ₹178 crores in Q3FY22, even though revenue declined only 5.7% to ₹1,005.25 crores.
  • 😊Shriram City Union Finance Q3 net profit rises 6% y-o-y at ₹322 crores.
  • 😊Marico’s Q3 net profit rises 1.6% y-o-y to ₹317 cr; sales jump 13.4% to ₹2,407 crores.

🚀 IPO Corner

  • DIPAM Secretary Tuhin Kanta Pandey mentioned to a media channel that the government is targeting an early March date for LIC’s IPO.
  • Imagine Marketing, the owner of the Boat brand that is famous for its earphones, has filed its DRHP for an IPO of up to ₹2,000 crores with SEBI.
Upcoming IPO: Vedant Fashions Limited

  • Opens: Feb 04, 2022

  • Closes: Feb 08, 2022

  • Price band: ₹824 to ₹866 per equity share

  • Issue Size: ₹3,150 crores.
Current IPOs
  • Adani Wilmar Limited Ltd IPO was subscribed 1.15 times at the end of Day 2 of bidding.

🔌EV and Sustainability Corner

  • Gurugram opens India’s largest electric vehicle (EV) charging station on the Delhi-Jaipur National Highway in Gurugram. This charging station has a capacity of 100 charging points for 4-wheelers. Also, the company announced its operation with 96 chargers for EVs.
  • Airtel has commissioned a new 21-megawatt solar power plant in Maharashtra to reduce its carbon footprint.
  • Inox Wind Energy gets shareholders’ approval to raise up to 90 crores through the issuance of 10.62 lakh convertible warrants. The money will be used for meeting the funding requirements of the company, its subsidiaries’ consolidated business operations, and for general corporate purposes.
  • TVS Motor Company has acquired a 75% stake in Switzerland’s e-bike player Swiss E-Mobility Group (SEMG) for $100mn. SEMG has four marquee brands Cilo, Simpel, Allegro, and Zenith.SEMG is a provider of e-mobility solutions within the DACH region (Austria, Switzerland, and Germany), and has a network of more than 30 retail stores across Switzerland and Germany.
  • Ola Electric plans to set up its global center for advanced engineering and vehicle design in Coventry, UK. The space will be known by the name ‘Ola Futurefoundry’ and it will add conjunction with the company’s Bengaluru-based design and engineering groups.
  • Hero Electric collaborates with ALT Mobility, India’s first dedicated platform for leasing electric vehicles for the logistics market. Under the latest partnership, Hero electric will deploy 10,000 Hero Nyx electric 2W by 2023.ALT Mobility offers two and three-wheeler EVs on an affordable monthly subscription to fleet operators.
  • JSW Steel has earmarked ₹10,000 crores to cutting emissions. Its sustainable goals include shifting to solar power for energy and using more scrap. The company aims to reduce carbon dioxide emissions to 1.95 tonnes for every tonne of steel produced by 2030 from 2.52 tonnes last year.
  • JSW Group has announced a New Year incentive for its employees under which the company will offer ₹3 lakh to its workers who will buy an EV starting January 1. It is part of JSW Group’s “Green initiative” JSW EV Policy for its employees across India.
  • Aurangabad plans to purchase 250 EV four-wheelers by March-end as per the Marathwada Auto Cluster has launched the Aurangabad Mission Green Mobility (EV) with the help of people’s participation. Until now, the documentation of around 150 four-wheelers is completed.
  • Major electric vehicles (EV) start-ups said that the Indian government should introduce standardized EV charging infrastructure and ease norms for EV manufacturing under the PLI scheme. At current, the mass of the EV makers in the country are start-ups like Ather Energy, Bounce, Hero Electric, Okinawa Autotech, and others. To be eligible for the ₹26,058 incentives under the PLI scheme for the EV industry, an automaker must have a global revenue of at least ₹10,000 Cr. The minimum investment of ₹3,000 Cr in fixed assets.
  • Maruti Suzuki working with Toyota on a small electric SUV codenamed YY8.

That’s all for this week’s market wrap-up. We will be back with new market insights next week!  

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