View on market: Volatility Prevails, Market is searching for better value

Asian markets were set for mixed open on risk of higher interest rates and recession to a potential turning point for Chinese tech companies and constructive dialogue between Beijing and Washington. Friday’s session on Wall Street saw U.S. stocks close on the backfoot, two-year treasury yields fell while 10-year yields rose and a gauge of dollar strength slipping the most in more than three months. The S&P 500 fell 1.2% over the shortened holiday week while the Nasdaq 100 slid 0.9%. Futures for these benchmarks fluctuated after the open of Asian trading. Traders will be closely watching this week’s U.S. consumer price print. Meanwhile, Brent crude was above $78 a barrel and West Texas Intermediate was trading below to $74-mark. The yield on the 10-year U.S. bond was trading at 4.06%, whereas Bitcoin was above 30,000-level. At 05:27 a.m., the GIFT Nifty, an early indicator of the Nifty 50 Index’s performance in India was up 0.38% or 74 points at 19,474.

Economic Calendar:

  • USD : CPI (MoM) (Jun) on 12th July, 2023
  • USD : Initial Jobless Claims on 13th July, 2023
  • INR : CPI (YoY) (Jun) on 12th July, 2023
  • INR : Manufacturing Output (MoM) (May) on 12th July, 2023

Brokerage Radar:

UBS ON RIL: Buy, TP Rs 3000; Reliance Retail to reduce non-promoter shareholding, valuations at US$92-96bn; Apart from RRL, RRVL also owns other businesses (like Reliance Brands, Just dial, Reliance Consumers, etc.), implying even higher value for RRVL; Value RRVL at $110bn & RIL’s 85% stake in RRVL at $93bn; Think this sets a floor price to future value unlocking, & should bring confidence to Retail biz value in the SoTP; Consideration of Rs1362/sh is at a 54-60% premium to val obtained from 2 valuers

CITI ON HDFC BK: Resume buy, TP Rs 2200; Post-merger, est. advances growth of 18% over FY23-26E, NIMs of 3.8%, opex/assets at 1.9% & credit cost of <70bps.  ROAs will hold near 1.9-2.0%, while ROE will be dragged due to expanded equity base (to 15%)

International Markets

U.S & Europe:

Particulars 07th July Chg. Chg.(%)
Nasdaq 13660.72 -18.33 -0.13
Dow 33734.88 -187.38 -0.55
FTSE 7256.94 -23.56 -0.32
CAC 7111.88 29.59 0.42
DAX 15603.40 74.86 0.48
Dow Fut.* 33716.00 -18.90 -0.06

Asian markets

Particulars 10th July Chg. Chg.(%)
GIFT Nifty 19415.00 -43.00 -0.22
Nikkei 32173.88 -214.54 -0.67
Straits Times 3154.16 14.69 0.47
Hang Seng 18576.51 210.81 1.15
Shanghai 3210.51 13.90 0.43

ADR Watch:

Particulars 07th July  Chg.       Chg.(%)
Dr. Reddy 62.40 -0.36 -0.57
HDFC Bank 66.32 -0.11 -0.17
ICICI Bank 23.09 -0.11 -0.47
Infosys 16.05 -0.02 -0.12
Wipro 4.75 -0.01 -0.21

Commodities & Currency

Particulars Current Price Chg.(%)
USD/INR 82.66 0.05
Brent 78.09 -0.48
Gold 1930.45 -0.11
Silver 23.265 -0.10

FIIs & DIIs:

Particulars 07th July 06th July
FIIs                          790.40 2641.05
DIIs -2964.23 -2351.66

News Update:

Reliance Industries: The conglomerate will reduce equity share capital held by shareholders in Reliance Retail Ltd. other than its promoter and holding company, Reliance Retail Ventures. The shares held by such shareholders shall be cancelled and extinguished upon reduction. A consideration of Rs 1,362 per share will be paid towards the capital reduction.

Vedanta: Acquired two units of Twin Star Technologies, Vedanta Foxconn Semiconductors and Vedanta Displays, via share transfer, thus adding semiconductors and display glass ventures to its portfolio. The share purchase price of Vedanta Displays has a face value of Rs 5 lakh. The share purchase price of Vedanta Foxconn is at a face value of Rs 5 lakh, including net operating liabilities of about Rs 4 crore.

Indian Oil Corporation: The company has agreed to raise capital up to Rs 22,000 crore by issuing equity shares on a rights basis. Separately, it inked a pact with Sun Mobility Singapore to form a 50:50 joint venture for the battery swapping business. Indian Oil will invest Rs 1,800 crore in equity till fiscal 2026–27. It will also invest $78.31 million in IOCL Singapore for the purchase of preference shares and warrants of Sun Mobility Singapore.

Samvardhana Motherson International: The company has inked a contract to acquire a 100% stake in Rollon Hydraulics. The business will be housed under the company’s precision metals and modules division.

ITC: The conglomerate clarified a media report regarding the demerger of the hotel business. It said the company remains committed to implementing its ‘asset-right’ strategy with respect to the hotel business. It is committed to focusing on sweating existing assets, creating additional revenue streams, and pursuing alternate structures to enhance growth and value. ITC said it will inform regarding any material development of company affairs to the stock exchanges.   

Suzlon Energy: The board of Suzlon Energy has approved a fund raising of Rs 2,000 crore via equity and debt instruments. Fundraising is subject to the approval of shareholders.

Source: Moneycontrol, Bloomberg Quint, Investing 

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