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

Following drops across the board in the U.S., Asian stock markets are expected to open lower as concerns about inflation and growth dampen risk appetite. Futures for Hong Kong, Australia, and Japan’s equity benchmarks all decreased. Early trading in Asia saw no change in U.S. futures. After retail sales beat expectations on Tuesday, stocks dropped on Wall Street, supporting the Federal Reserve’s case for continuing to hike interest rates. The tech-heavy Nasdaq 100, the Dow Jones Industrial Average, and the S&P 500 all finished barely off session lows. After Fitch Ratings issued a warning that it may downgrade larger lenders like JPMorgan Chase & Co. or Bank of America Corp., financials put pressure on the broader benchmark. Meanwhile, Brent crude was trading below $85 a barrel and West Texas Intermediate was below the $81-mark. The yield on the 10-year U.S. bond was trading at 4.21% and Bitcoin was below 30,000-level. At 5:21 a.m., the GIFT Nifty, an early indicator of the Nifty 50 Index’s performance in India was down 0.5 points or 0% at 19,474.

Economic Calendar:

  • USD : Building Permits (Jul) on 16th Aug, 2023
  • USD : Initial Jobless Claims on 17th Aug, 2023
  • INR : FX Reserves, USD on 18th Aug, 2023
  • INR : GDP Quarterly (YoY) (Q1) on 31st Aug, 2023

Brokerage Radar:

JEFFERIES ON ITC: Buy, TP Rs 530; Reported strong momentum, with cig vol up 8% & FMCG revenue growth 16%; Biggest debate is whether best is behind. Earning growth will moderate, but think stock continues to offer value & provide high earning visibility

MS ON VOLTAS: UW, TP Rs 735; No change in outlook & see downside risks to consensus margin estimates. Voltas continues to see AC market remaining extremely competitive & guides for a single-digit margin. Project business also continues to be a drag

CLSA ON HAL: Buy, TP raised to Rs 4110 (on roll fwd); Strong 1Q; Ebitda margins (+463bps YoY) & cash pile swelled to $2.5bn+; Backlog slowed to 3% YoY in 1Q on delay in Russian platforms- Su-30 fighter aircraft & engine orders; Decadal pipeline continues to grow at $45bn

International Markets

U.S & Europe:

Particulars 15th August Chg. Chg.(%)
Nasdaq 13631.05 -157.28 -1.14
Dow 34946.39 -361.24 -1.02
FTSE 7389.64 -117.51 -1.59
CAC 7267.70 -81.14 -1.12
DAX 15767.28 -136.97 -0.87
Dow Fut.* 34967.90 21.50 0.06

Asian markets:

Particulars 16th August Chg. Chg.(%)
GIFT Nifty 19390.00 -84.00 -0.43
Nikkei 31906.25 -332.64 -1.04
Straits Times 3213.98 -18.76 -0.58
Hang Seng 18325.39 -255.72 -1.38
Shanghai 3160.62 -15.56 -0.49

ADR Watch:

Particulars    15th August  Chg.       Chg.(%)
Dr. Reddy 71.07 0.23 0.32
HDFC Bank 63.86 -1.24 -1.90
ICICI Bank 22.82 -0.13 -0.57
Infosys 17.13 0.27 1.60
Wipro 4.98 0.00 0.00

Commodities & Currency:

Particulars Current Price Chg.(%)
USD/INR 83.29 -0.24
Brent 84.68 -0.25
Gold 1935.25 0.00
Silver 22.672 0.07

FIIs & DIIs:

Particulars   14th August 11th August
FIIs                          -2324.23 -3078.28
DIIs 1460.90 500.35

News Update:

ITC: The shareholders will get one share in ITC Hotels for every 10 shares held in the parent company. The indicative timeline for listing ITC Hotels is approximately 15 months. The hotel business will be given a licence to use the ‘ITC’ brand. The board has approved the acquisition of a 25% stake in Maharaja Heritage from Russell Credit and a 45.36% stake in International Travel House.

Zee Entertainment: The markets regulator SEBI passed a confirmatory order barring Chairman Emeritus Subash Chandra and former Managing Director Punit Goenka from company boards over allegations of diversion of the company’s funds.

Hero MotoCorp: The company received the family settlement deal from the promoter group, under which Sunil Kant Munjal has resigned as Joint Managing Director and will exit the company. Management and control will vest with the family group comprising Santosh Munjal, Renu Munjal, Suman Kant Munjal, and Pawan Munjal. An understanding has been reached between the family and Sunil Munjal on the usage of the trademark ‘Hero’.

Ashok Leyland: The company will acquire OHM Global Mobility (OHM India) from OHM International Mobility under a share purchase agreement. It will infuse fresh equity or preference capital of up to Rs 300 crore in one or more tranches for its business requirements.

Reliance Industries: Jio completed the minimum roll-out obligations of 5G ahead of schedule across all spectrum bands acquired in the 2022 auction. Jio customers are now using 26 GHz millimetre wave-based connectivity across all 22 telecom circles.

Suzlon Energy: The company has raised Rs 2,000 crore via QIP and allotted 113.96 crore shares at Rs 17.55 apiece, representing a discount of 4.83% to the floor price. More than 5% of the equity shares offered were allotted to BNP Paribas, Bandhan Mutual Fund, HDFC Mutual Fund, Invesco Mutual Fund, and Max Life Insurance. Goldman Sachs and ICICI Prudential.

Source: Moneycontrol, Bloomberg Quint, Investing 

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