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

Asian shares face headwinds Monday after the rally in U.S. bonds and stocks hit a wall Friday amid concern that the Federal Reserve can’t claim victory over inflation yet. Equity futures for Australia were little changed while those for Hong Kong dropped 0.7% and an index of U.S.-listed Chinese stocks fell more than 2%. Japanese markets will be closed for a holiday. Contracts for the S&P 500 and Nasdaq 100 were marginally lower as trading got underway in Asia on Monday. The underlying indices posted mild losses on Friday as traders cited consolidation after an advance that drove the S&P 500 to its best week since mid-June. Meanwhile, Brent crude was below $80 a barrel and West Texas Intermediate was around the $75-mark. The yield on the 10-year U.S. bond was trading at 3.83%, whereas Bitcoin was below 31,000-level. At 5:24 a.m., the GIFT Nifty, an early indicator of the Nifty 50 Index’s performance in India was down 0.15% or 30 points at 19,618.

Economic Calendar:

  • USD : Retail Sales (MoM) (Jun) on 18th July, 2023
  • USD : Building Permits (Jun) on 19th July, 2023
  • INR : FX Reserves, USD on 21st July, 2023
  • INR : Infrastructure Output (YoY) (Jun) on 31st July, 2023

Brokerage Radar:

MS ON AVENUE SUPERMART: EW, TP Rs. 3786; Top-line growth moderated & EBITDA margins below est.; Lower demand for better-margin GMA categories remains key challenge; GMA contribution remained low in 1Q but is now recovering & trending towards pre-pandemic levels

JEFFERIES ON HDFC BK: Resume Buy, TP Rs 2100; HDFC Bank is now among global large banks ($100bn mkt cap) with best in class growth & profitability. Merger broadens lending & cross-sell avenues especially in mortgages, insurance, MFsMobilisation of deposits should drive success & bank is seeing early success with branch-expansion; Forecast profit Cagr of 17% over FY23-26, ROA of 1.9% & ROE of 16% in FY25. Risk is from spike in rates & lower PSLs

International Markets

U.S & Europe:

Particulars 14th July Chg. Chg.(%)
Nasdaq 14113.70 -24.87 -0.18
Dow 34509.03 113.89 0.33
FTSE 7434.57 -5.64 -0.08
CAC 7374.54 4.74 0.06
DAX 16105.07 -35.96 -0.22
Dow Fut.* 34482.10 -26.90 -0.08

Asian markets

Particulars 17th July Chg. Chg.(%)
GIFT Nifty 19634.50 15.50 0.08
Nikkei 32391.26 -28.07 -0.09
Straits Times 32391.26 -28.07 -0.09
Hang Seng 19413.78 63.16 0.33
Shanghai 3200.73 -36.97 -1.14

ADR Watch:

Particulars   14th July  Chg.       Chg.(%)
Dr. Reddy 61.90 -0.54 -0.86
HDFC Bank 67.56 0.04 0.06
ICICI Bank 23.33 -0.07 -0.30
Infosys 17.04 0.25 1.49
Wipro 4.92 0.12 2.50

Commodities & Currency

Particulars Current Price Chg.(%)
USD/INR 82.13 0.07
Brent 79.15 -0.90
Gold 1956.85 -0.38
Silver 25.008 -0.74

FIIs & DIIs:

Particulars 14th July 13th July
FIIs                          2636.43 2237.93
DIIs -772.45 -1196.68

News Update:

HDFC Bank: The lender has allotted 3,11,03,96,492 new equity shares of Rs. 1 each of HDFC Bank according to the share exchange ratio of 42 shares of HDFC Bank for every 25 shares of HDFC Ltd. The bank’s paid-up share capital will increase from Rs. 559.17 crore to Rs. 753.75 crore post cancellation of promoter holding of 116.46 crore equity shares. HDFC Bank is a now publicly held company following the merger with no clear promoter.

State Bank of India: The lender has raised MCLR by 5 bps across tenors. The hike is effective from July 15. The Central Government nominated Ajay Kumar, Executive Director, Reserve Bank of India as director on the Central Board of State Bank of India with immediate effect and until further orders.

Punjab National Bank: Uma Sankar has been nominated as a director on the Board of the Bank with immediate effect and until further orders, in place of Anil Kumar Misra.

Ircon International: The company has commissioned the first phase upgradation work of railway line from Maho to Omanthai Track Rehabilitation Project from Sri Lanka Railways.

JK Lakshmi Cement: The company has made an additional investment in subsidiary company through equity subscription by rights issue. The unit, Udaipur Cement Works Ltd., has allotted 19.45 crore equity shares at a premium of Rs 14 per equity share leading to a  total consideration of Rs 350.12 crore. JK Lakshmi Cement’s holding is increased from 72.54% to 75%.

Devyani International: The NCLT has approved the merger scheme of units Devyani Food Street Private and Devyani Airport Services (Mumbai) with Devyani International.

Som Distilleries and Breweries: The company will consider and approve, on Aug. 5, to issue of up to 2.5 lakh equity shares on a preferential and private placement basis to an identified non-promoter entity.

Mahindra & Mahindra: The company signed a memorandum of understanding with NXP Semiconductors to jointly explore the electric and connected vehicle landscape, covering a wide range of vehicles including utility vehicles, light commercial vehicles, farm equipment, and tractors.

 Source: Moneycontrol, Bloomberg Quint, Investing 

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