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Investors all over the world were sitting on the edge of their seats this week, eagerly awaiting the two major events – US inflation numbers and RBI’s monetary policy meet.
Inflation in the US reached its highest in four decades. It seems the Fed will have to pump the brakes on the economy for a little longer, making analysts wonder if the US is looking at a recession.
Meanwhile in India, RBI used the repo rate sword to try to puncture the ballooning inflation, and hiked the repo rate by 50 bps yet again! This move, which comes after only 40 days of the previous repo rate hike, should tighten the liquidity further. Let us pray this is not a double-edged sword as it will lead to an increase in interest rates for home and car loans creating additional pressure on the people who are already grappling with the high food and fuel prices.
Such was the negative sentiment on Friday that the Indian markets tumbled eroding ₹2.5 lakh crores of investors’ wealth in a mere 5 minutes of the market opening. This was a massive sell-off led by IT and bank stocks.
Every week, all benchmark indices were painted red over concerns about the effects of the aggressive stance of the central banks. Nifty closed the week at 16,202 down 2.31% from last week. The BSE benchmark Sensex cracked 1,016 points to close at 54,303 (down 2.63% from last week).
On the sectoral front, Nifty Consumer Durables and Financial Services were the biggest lagg on the sectoral frontwards. Nifty Auto, Oil and Gas and Healthcare showed meagre gains.
As if to help us find a silver lining in these gloomy weeks, the monsoons have arrived, finally! Providing a much-needed respite from the heatwave. So, bring on the umbrellas, the pakodas and the corn cobs and take a moment to smell the fresh air before the new rollercoaster week begins.
–Mr. Ratnesh Goyal, Senior Research Analyst, Arihant Capital
On both the daily and the weekly chart of Nifty, it has started trading below all the important moving averages. We conclude that the market may see pressure from higher levels. Now, it has to cross the 16,350 level to see a bounce towards the 16,500 and 16,650 levels. On the downside support, if the Nifty trades below 16,150 then it can test 16,040 and 15,900 levels.
On both the daily and the weekly chart of Bank Nifty, it has started trading below all its important moving averages. If both the data are combined and analyzed we may see pressure from higher levels. Bank Nifty still looks weak compared to Nifty. In the coming trading sessions, if it trades below 34,300 then weakness could take it to 34,000 and 33,850 levels whereas minor resistance on the upside is capped around 35,100-35,300 levels.
From the Technical Desk
-Ms. Kavita Jain, Head Learning and Senior Research Analyst, Arihant Capital
- US inflation stands at a 4-decade high of 8.6%.
- Oil prices jumped about 3% to a 13-week high, Brent crude stood at $124.08 a barrel. Russia’s Rosneft has no extra oil to form deals with BPCL, and HPCL.
- The rupee hits a new low of 77.8 against the dollar as investors continue to pull out of emerging markets.
- India to extend a credit line of $55 million to Sri Lanka for the purchase of fertilizers.
- RBI Monetary Policy Meet
- The RBI increased the repo rates by 0.5% to 4.9%. This is the 2nd increase in a month’s time. An increase in repo rates means that the loan rates will go up along with rates offered on deposits.
- RBI also allowed the linking of credit cards to UPI.
- It kept the GDP growth rate intact RBI has kept its GDP forecast for FY23 unchanged at 7.2%.
- Most banks increased their lending rates in response to the meet. HDFC Bank hiked MCLR by 35 bps,
- World Bank has now lowered its FY23 GDP growth forecast for India to 7.5 per cent. Fitch revises India’s GDP forecast downwards to 7.8% for FY23 but the outlook becomes ‘stable’.
- Industrial output (IIP) grew at a pace of 7.1% in April 2022.
- Tata Motors looks to strengthen R&D capabilities with aggressive hiring this year.
- After conquering the passenger vehicles domain, Maruti targets the SUV segment.
Banking and Finance
- Banks respond to RBI MPC meet by raising their interest rates used for pricing retail loans. HDFC will also raise its Retail Prime Lending Rate (RPLR) on housing loans by 50 bps.
- Abu Dabhi Investment Authority has agreed to pay ₹2,200 crores to acquire a 20% stake in IIFL Home Finance.
- Shriram Transport Finance has secured long-term funding of $250 million from the US International Development Finance Corp.
- Ujjivan Small Finance Bank to raise up to ₹1,500 crores by way of issue of non-convertible debt securities.
- PNB to invest ₹500 crores in PNB Housing Finance’s rights issue; This will help PNB keep its stake between 26% and 30% and retain promoter status at PNB Housing Finance.
- SBI Card to raise ₹2,500 crores by issuing non-convertible debentures (NCDs) to fund business growth.
- Life insurance companies can now introduce products without taking prior approval from IRDAI, they can file updates with the regulator post launching new products.
Energy and Infrastructure
- DVI Fund Mauritius dilutes a 3.3% stake in GMR Infra for ₹720 crore
- Despite a 34% jump in coal production, high power demand forces Coal India to seek bids for the import of 2.4 million tonnes of coal.
- Welspun Enterprises executes agreements with Actis Highway to sell its highway projects for an aggregate enterprise value of ₹6,000 crores.
- Adani Power buys infra firms Support Properties for ₹280 crores and Eternus for ₹329 crores.
- Adani Transmission to buy Essar Power’s Mahan-Sipat transmission line for ₹1,913 crores.
- Govt plans to monetise assets worth ₹75,220 crores in the coal mining sector. in FY23.
- Six Indian banks sue GVK for ₹12,114 crores.
- HG Infra Engineering received orders worth ₹4,971 crores from Adani Road Transport for Ganga Expressway.
IT and Telecommunications
- Tata Elxsi has opened a new technology development centre in Kozhikode, Kerala. The new centre will host teams and state-of-the-art technology and product development facilities in EV, Connected Car, OTT, 5G, and Digital technologies.
- Adani Enterprises gets the WB government’s nod to set up a hyper-scale data centre at Bengal Silicon Valley.
- Reliance Jio launched 4G voice and data services near Pangong Lake in Ladakh.
- Infibeam Avenues incorporated a wholly-owned subsidiary, named Infibeam Avenues Australia in Australia.
- Vedanta pledges Hindustan Zinc stake to raise ₹10,000 crores. The firm has created an encumbrance on its entire shareholding of 64.92%. Vedanta to raise up to ₹4,089 crores via debentures on a private placement basis.
- Tata Steel buys ₹165 crores Non-Convertible shares of TRF Ltd. Tata Steel will invest over ₹2,100 cr in 2 of its companies Tinplate Company India Ltd. (TCIL) and Indian Wire and Steel Products Ltd.
- CG Electricals may raise funds up to ₹925 crores by issuing shares on a private placement basis.
- Hindustan Copper resumes its mine operation at the Surda mine in Jharkhand.
- Adani Group plans to develop South Asia’s largest integrated ammunition manufacturing facility in Uttar Pradesh with an investment of ₹1,500 crores spread over 250 acres.
- NMDC makes a sharp reduction of ₹1,100 per tonne in the price of lump ore and ₹1,000 in case of fines.
- Amazon and RIL are set to battle over $7.7B cricket rights.
- A consortium of RIL and Apollo Global Management Inc. has emerged as the strongest contender to acquire Boots pharmacies unit in the UK.
- LIC acquired 2 lakh shares in Zee through open market transactions.
- Adani and Apollo Hospitals Enterprise Ltd, are bidding to pick up a majority stake in the diagnostic chain Metropolis Healthcare Ltd.
- US-based fund Lunolux, the majority stakeholder in Eureka Forbes, has launched an open offer to acquire a further 26% stake in the home appliances maker. Lunolux had agreed to buy up to a 72.56% stake in Eureka Forbes from Shapoorji Pallonji Group for ₹4,400 crores.
- PepsiCo steps up investment in the UP plant. PepsiCo’s total investment in Uttar Pradesh tops ₹1,022 crore
- Is this a miracle? For the first time in history, a group of cancer patients showed no signs of a tumour after taking Dostarlimab medicine for around six months.
- Cosmetic maker, Revlon nears bankruptcy.
- Dr Reddy’s biotech subsidiary has signed an agreement with Olema Oncology to discover and develop novel cancer therapies.
- India has achieved the target of 10% ethanol blending in petrol, resulting in a reduction of 27 lakh tonnes of carbon emissions.
- Maruti Suzuki has set up a 20 MW solar power plant at its Manesar-based manufacturing facility, roughly helping the production of over 67,000 cars annually.
- TVS looks to raise up to ₹5,000 crores in EV push.
- Bajaj’s Chetak Tech inaugurates a new EV plant at Pune.
- Omaxe partners with Jio-BP to set up an EV battery charging ecosystem.
- Tata Power commissions a 450MWDC project for Brookfield Renewables.
- India’s investments in renewable energy more than doubled (or rose by 125% to $14.55 billion) in FY22, as compared to a year ago.
- India ranks lowest among 180 countries in the environmental performance index published recently by the Yale Center for Environmental Law and Policy and the Center for International Earth Science Information Network, Columbia University.
- Ola is in talks with multiple global suppliers for $1 bn cell manufacturing with a capacity of up to 50-gigawatt hours.
- India plans to slash the production costs of green hydrogen to $1 a kilogram from $5-$6 currently to encourage industries to use cleaner energy.
- US and Germany propose an India-G7 partnership to fund decarbonisation to help India turn from a “fossil-based economy to a carbon-neutral economy”.
- ACME Group proposes ₹52,000 crores green hydrogen plant in Karnataka.
- Maharashtra to launch a ₹200 crore fund to invest in women-led, deep tech startups
- Tata Motors signed an agreement with BluSmart Electric Mobility for delivering 10,000 XPRES-T EVs to the company.
That’s all for now folks! See you next week!