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

Asian markets are poised for a cautious open as US equities and Treasuries fell after disappointing tech earnings and fresh signs of labor-market resiliency that could support another hike in interest rates this year. Equity futures for Japan and Hong Kong posted small losses, while contracts for Australia and the US were little changed. The Nasdaq 100 scored its biggest drop in nearly five months, as Netflix Inc. fell on a disappointing revenue forecast and Tesla Inc. declined after profitability shrank in the second quarter, Bloomberg reported. The S&P 500 also declined 0.68% amid an unexpected fall in weekly initial jobless claims. Meanwhile, oil rose and gold futures fell. 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 3.85%, whereas Bitcoin was below 30,000-level. At 5:20 a.m., the GIFT Nifty, an early indicator of the Nifty 50 Index’s performance in India was trading flat at 19,883.

Economic Calendar:

  • USD : Services PMI (Jul) on 24th July, 2023
  • USD : Building Permits on 26th July, 2023
  • INR : FX Reserves, USD on 21st July, 2023
  • INR : Infrastructure Output (YoY) (Jun) on 31st July, 2023

Brokerage Radar:

MS ON HUL: EW, TP Rs 2408; Earnings missed est. Headwinds from weaker vol growth environment, lower/nil pricing growth, & media investments could weigh on growth & margins; Management expects a gradual recovery in consumer demand

JEFFERIES ON COFORGE: Hold,TP Rs4550; 1Q missed est; However strong deal wins & healthy growth in executable order bk, along with unchanged growth & margin guidance is reassuring; Expect 20% EPS Cagr over FY23-26E; Rich val @27x; PE & promoter stake sale overhang should ltd upsides

MACQUARIE ON INFOSYS: Downgrade to U-P, TP Rs 1130; While 1Q rev & margin in line, disappointed by deal wins that imply that $1.5bn bp deal is at least partly a renewal; Think $2bn “framework” deal is not a “mega deal” as this is merely an est. by management

International Markets

U.S & Europe:

Particulars 20th July Chg. Chg.(%)
Nasdaq 14063.31 -294.71 -2.05
Dow 35225.18 163.97 0.47
FTSE 7646.05 57.85 0.76
CAC 7384.91 57.97 0.78
DAX 16204.22 95.29 0.59
Dow Fut.* 35280.10 54.90 0.16

Asian markets:

Particulars 21st July Chg. Chg.(%)
GIFT Nifty 19869.50 11.00 0.06
Nikkei 32417.92 -72.60 -0.22
Straits Times 3274.39 0.01 0.00
Hang Seng 19115.01 186.99 0.99
Shanghai 3179.82 10.30 0.32

ADR Watch:

Particulars   20th July  Chg.       Chg.(%)
Dr. Reddy 64.50 1.18 1.86
HDFC Bank 71.01 0.47 0.67
ICICI Bank 24.48 0.44 1.83
Infosys 16.22 -1.49 -8.41
Wipro 4.91 -0.20 -3.91

Commodities & Currency

Particulars Current Price Chg.(%)
USD/INR 82.05 -0.13
Brent 80.22 0.73
Gold 1972.55 0.08
Silver 25.032 0.28

FIIs & DIIs:

Particulars 20th July 19th July
FIIs                          3370.90 1165.47
DIIs -193.02 -2134.54

News Update:

IndiaMart InterMesh: The board of the company has approved a buyback of up to Rs 500 crore consisting of 12.5 lakh shares, representing a 2.04% stake via tender offer. The buyback price will be Rs 4,000 per share, a premium of 38% over Thursday’s closing price.

Larsen & Toubro: The company will consider a share buyback and special dividend on July 25.

IndusInd Bank: The board of the bank approved raising Rs 20,000 crore via debt securities on a private placement basis.

Jindal Stainless: The company completed the acquisition of Jindal United Steel by acquiring the remaining 74% stake for Rs 958 crore, making JUSL a 100% owned subsidiary of JSL.

LTIMindtree: The company announced a strategic partnership with CYFIRMA to enhance the threat intelligence capabilities of its XDR platform. Larsen & Toubro, through its L&T Innovation Fund, recently invested in CYFIRMA in a pre-Series B round of funding.

Hindustan Aeronautics: The company has signed a Letter of Intent on co-operation for Light and Medium Utility Helicopters for the Armed Forces of Argentina.

Infosys: The country’s second-largest IT services provider recorded a profit of Rs 5,945 crore for the quarter ended June FY24, down 3 percent compared to the previous quarter, and slashed full-year revenue growth guidance to 1-3.5 percent from 4-7 percent earlier while maintaining EBIT margin guidance at 20-22 percent. Revenue grew by 1.3 percent sequentially to Rs 37,933 crore, while dollar revenue rose by 1.4 percent QoQ to $4,617 million and revenue growth in constant currency terms stood at 1 percent against CNBC-TV18 poll estimates of 0.7 percent rise.

Source: Moneycontrol, Bloomberg Quint, Investing

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