Repo Rate Unchanged At 6.5% | Indian Stock Market Weekly Update 8 April
“What goes up, must come down” – RBI Hits Pause On Interest Rate Hikes
After 6 consecutive rate hikes in 11 months to control inflation, in a surprise move, RBI decided to hit the pause button and kept the repo rate unchanged at 6.5%. There’s also good news, inflation finally moved southward and dropped from a three-month high of 6.52% in Jan to 6.44% in Feb but remained above RBI’s target of 2% to 6%
There’s a catch though about the interest rates left unchanged. The RBI governor clarified that this is just a pause, and the central bank is not pivoting to keeping the rates constant or lowering them (is he indicating there’s a hike in-store next time? Let’s wait for it!).
RBI also revised India’s growth expectations from 6.4% to 6.5% and inflation expectations from 5.3% to 5.2% for FY 2023-24. Food prices are expected to drop despite the negative impact of El Niño because of a strong Rabi season. Another positive for the Indian economy is the softening of global commodity prices from their recent highs.
As the Indian capital market revives, rate-sensitive sectors such as automobiles, infrastructure, and real estate are expected to be the major beneficiaries of RBI’s decision.
– Mr Abhishek Jain, Head of Research at Arihant Capital
On Friday, the Indian stock market ended at a four-week high after the Monetary Policy Committee kept the benchmark repo rate unchanged. The Nifty 50 Index was positively impacted by companies such as IndusInd Bank, Maruti Suzuki India, HDFC Bank, Reliance Industries, and Bajaj Finance.
On the other hand, HCL Technologies, Tata Consultancy Services, Axis Bank, JSW Steel, and Power Grid Corp of India had a negative impact on the Nifty 50 Index.
Foreign institutional investors made net investments of ₹1,605 crore and domestic institutional investors were net sellers of ₹2,273 crores in the equity segment.
Nifty ended 518 points up at the 17,599 level. Sensex was up by 3.23% and stood at 59.833.
🧾In this Article
📈Market Outlook
–Mr. Ratnesh Goyal, Senior Research Analyst, Arihant Capital.
Nifty
If we look at the daily chart of Nifty, we see an “Upward Gap” area. On the weekly chart, we see a “Bullish Candlestick” formation. If we analyze both charts, it indicates that now we can see some consolidation in the market and stock-specific action.
If Nifty starts trading above the 17,450 level, then it can touch the 17,600 to 17,800 levels. While on the downside, support is 17,200, and if it starts to trade below that, then Nifty can test the levels of 17,050 and 16,950.
Bank Nifty
If we look at the daily chart of Bank Nifty, we see an “Upward Gap” area and now it has closed above its 200-day SMA level. On the weekly chart, we see a “Bullish Candlestick” formation. If we analyze both charts, it indicates that Bank Nifty can outperform Nifty.
If Bank Nifty trades above 40,825, it can touch 41,200 and 41,500 levels. However, downside support comes at 40,500, below which we can see 40,200 and 39,900 levels.
💰Stock Picks
– Ms Kavita Jain, Sr Research Analyst, and Learning Head, Arihant Capital
🔎Quick Bites
Economy
- The World Bank has reduced India’s growth expectations for FY 2023-24 from 6.6% to 6.3%.
- India’s forex reserves rose $5.98 billion to $578.78 billion as on March 24, 2023.
Banking and Finance
- Life Insurance Corporation of India (LIC) reported that it made gains worth ₹65,500 from contrarian bets on the top 10 companies.
- HDFC Bank gave out 16.9% more loans in the January-March quarter compared to the same quarter last year.
- Paytm disbursed 3 times more loans in the January-March quarter this year compared to the same quarter last year.
- Mahindra and Mahindra Financial Services reported a 42% growth in loan disbursement on a YoY basis in March.
- IndusInd Bank reported a 21.3% growth in loan disbursement in the January-March quarter on a YoY basis.
- IIFL Finance has raised ₹125 crores through non-convertible debentures.
- Edelweiss Financial Services has launched the 2nd tranche of debentures worth ₹400 crores, proceeds from which will be used to gradually reduce debt and for general corporate purposes
- Lenders of Reliance Capital have delayed the auction for its assets to attract more bidders.
- In addition to core insurance products, general insurers might soon be allowed to sell related services like gym memberships, vehicle repairs, and other diagnostic services.
- Religare Enterprises has signed an agreement to buy MyInsuranceClub, an IRDA-approved insurance web aggregator.
Automobile and Aviation
- Mahindra & Mahindra reported a 21% rise in total units sold in March on a YoY basis.
- The joint venture of Eicher Motors and the Volvo Group, VE Commercial Vehicles reported a 35.2% rise in March on a YoY basis.
- Ashok Leyland reported a 19% increase in sales in March on a YoY basis.
- Hero Motocorp reported a 15.37% increase in sales in March on a YoY basis.
- Despite a dip in March, passenger vehicle and tractor sales have touched record highs in FY 2022-23.
- Tata group-owned Air India has secured ₹14,000 crore worth of loans from the State Bank of India and Bank of Baroda
Mining
- Tata Steel reported a drop in sales of 3.43% in the January-March quarter on a YoY basis.
- SAIL reported the best-ever annual production during FY 2022-23, with a YoY growth of 3.6% and 5.3% in hot metal and crude steel respectively.
Real estate
- Macrotech Developers (a. k. a. Lodha) has recorded pre-sales of ₹12,064 crore in FY 2022-23, rising 34% from the previous year.
- Godrej Properties has acquired land in Pune for a luxury homes project with an estimated revenue of ₹1,000 crore.
Oil
- The government has removed the windfall gains tax on crude which was previously ₹3,500 per tonne and tied local gas prices to global crude oil benchmarks.
- Saudi Arabia and OPEC+ countries have announced oil cuts of 1.16 million barrels per day.
Infrastructure
- NBCC (India) has secured an order worth ₹488 crores from the Ministry of Home Affairs involving the construction of a border and road along the India-Bangladesh border.
🚀IPO Corner
- Avalon Technologies IPO was subscribed 2.34 times with retail investors subscribing 0.88 times.
🏗️Corporate Actions
Muthoot Finance announced an interim dividend of ₹22 per share with 18th March as the record date.
| Company | Ratio | Ex-Date |
| Shree Securities | 1:10 | 6-Apr-2023 |
| Company | Ratio | Ex-Date |
| Deep Industries | 1:2 | 10-Apr-2023 |
| Mufin Green Finance | 1:2 | 13-Apr-2023 |
| Comfort Intech | 1:10 | 13-Apr-2023 |
| Company | Ratio | Ex-Date |
| MKVentures Capital | 1:8 | 3-Apr-2023 |
| PNB Housing Finance | 29:54 | 5-Apr-2023 |
| Company | Ratio | Ex-Date |
| Earum Pharmaceuticals | 1:4 | 10-Apr-2023 |
| Company | Offer price | Ex-Date |
| TeamLease Services | ₹3500 | 3-Apr-2023 |
| Company | Offer price | Ex-Date |
| Emami | ₹3500 | 3-Apr-2023 |
| Company | Type of dividend | Dividend per share | Ex-Date |
| Rail Vikas Nigam | Interim | ₹1.77 | 6-Apr-2023 |
| Vedanta | Interim | ₹20.50 | 6-Apr-2023 |
| Company | Type of dividend | Dividend per share | Ex-Date |
| Schaeffler India | Final | ₹24 | 11-Apr-2023 |
| Varun Beverages | Final | ₹1 | 12-Apr-2023 |
| Visaka Industries | Interim | ₹7 | 12-Apr-2023 |
| Britannia Industries | Interim | ₹72 | 13-Apr-2023 |
| Edelweiss Financial Services | Interim | ₹0.25 | 13-Apr-2023 |
| Goodluck India | Interim | ₹2 | 13-Apr-2023 |
🪜Others
- A week after securing $3 billion from 55 banks, Reliance Industries has secured an additional credit of $2 billion from 18 banks.
- Viacom18-owned JioCinema, the official steamer of IPL 2023, had a blockbuster opening weekend as they recorded over 147 crores (aka 14.7 million) video views. This was the highest-ever opening weekend for any tournament on a digital platform.
- Adani Group plans on lowering the leverage ratio from 4.2 times to 3.1 times by the end of FY 2023-24 mainly by increasing revenue rather than reducing debt.
- Adani Ports experienced a 9.5% YoY growth in cargo handled in March 2023.
- Adani Ports completed the acquisition of Karaikal Port for ₹1,485 crore and now owns 14 operational ports across India.
- Trade volume on Indian Energy Exchange dropped 4% in March on a YoY basis but rose 12% on a month-on-month basis.
- Indigo Paints acquired a 51% stake in Apple Chemie India, a construction chemicals manufacturer.
- In January, the Indian telecom subscriber base rose to 117.08 crore with Airtel and Jio adding 29 lakh new subscribers and Vi losing subscribers.
🔌Sustainability Corner
- To support the green hydrogen industry, the Indian government might provide support of ₹50 per kg in the first year and will cap it at ₹30 per kg from the third year onwards.
- TVS Motor, which is gearing up to expand its EV portfolio with new e2Ws and an electric 3-wheeler, acquired a 25% stake in Germany’s Killwatt which develops, designs and manufactures high-tech products and components for electric 2-wheelers and 3-wheelers.
- Tata Motors does it again – 3 months after clocking half a million sales in CY2022, it has sold a record 538,640 PVs including 50,000 EVs. Its quartet of SUVs (Nexon, Punch, Harrier, and Safari) contributed 355,810 units or 66% of total sales in FY2023.
- EV sales in India jumped 155% in FY2023 to over 1.17 million units.
- e2Ws: Ola No. 1 with a huge lead, Ampere packs a punch
- e3Ws: Mahindra tops with 35,000+ units and a 9% share
- ePVs: Sales up 125%, Tata Motors 79% share and MG Motor 11%
- Yamaha wins 2023’s Red Dot Product Design award for two new EVs – the NEO’S electric scooter and TY-E 2.0 electric trials bike. This is the 12th year in a row that Yamaha has won a Red Dot Award.
