Market View 22nd December 2022

View on market: Stay Cautious, be with quality business:

Stocks opened higher in Japan, South Korea and Australia on Thursday, buoyed by gains in the U.S. markets. Futures for Hong Kong climbed, as did an index of US-listed Chinese shares.  U.S. stocks fared well as rising investor sentiment and better-than-expected results by some propped up the market. The S&P 500 was up 1.4%, as were 95% of the stocks listed on the index, and so was the tech-heavy Nasdaq 100. The yield on 10-year Treasuries was stable at 3.69%. Crude rose 2.3%, while gold futures changed little. Bitcoin declined 0.5% to trade around $16,800-level. India benchmark indices Sensex and Nifty opened higher but closed lower after a highly volatile session. The market breadth was skewed in the favour of bears. Overseas investors in Indian equities turned net sellers on Wednesday. Foreign portfolio investors offloaded equities worth Rs 1,119.1 crore, while the domestic institutional investors remained net buyers for the 11th day in a row, mopping up equities worth Rs 1,757.4 crore, according to NSE data. Rupee continued to fall against U.S. dollar amid a poor show by domestic equities and risk aversion in global markets. The Singapore-traded SGX Nifty, an early barometer of India’s benchmark Nifty 50, was up 0.48% to 18,337.5 at 6:23 a.m.

Economic Calendar:

• USD : GDP (QoQ) (Q3) on 22nd December, 2022
• USD : Initial Jobless Claims on 22nd December, 2022
• INR : Federal Fiscal Deficit (Nov) on 30th December, 2022
• INR : Foreign Debt (USD) (Q3) on 30th December, 2022

Brokerage Radar:

GS ON KPIT TECH: Buy, TP Rs 930; Lateral hiring efforts focused largely around on senior architect level; Ability to win entire vehicle platform projects vs single programs earlier supporting deeper client relationships & criticality; OEMs prioritizing EV & Autonomous vehicle R&D despite current macro environment; Longer duration of demand visibility vs general IT services pointing to sustainable period of high organic growth

DAM CAPITAL ON ULTRATECH CEMENT: Buy, TP Rs 8200; With low-cost expansions, sweating of assets (80%+ utilizations), believe core ROCE (pre-tax) to expand to 18% by FY25E; Valuations at 12x FY25E EV/EBITDA attractive

JEFFERIES ON BANDHAN BK: Buy, TP Rs 340; This is 2nd positive NPL-recovery event after Rs9.2bn received from CGFMU & another Rs15-20bn can be expected in 1HFY24; This improves asset quality outlook & vals are attractive at 1.8x FY24 adj PB

International Markets:

U.S & Europe

Asian markets

ADR Watch:

Commodities & Currency

FIIs & DIIs:

News Update:

Adani Enterprises: Group subsidiary Adani Solar launched India’s first large sized monocrystalline silicon ingot, which can be used to make PV modules with efficiencies ranging from 21-24%.

Reliance Industries: Reliance Retail Ventures Ltd., a subsidiary of Reliance Industries Ltd., signed definitive agreements to acquire 100% equity stake in METRO Cash & Carry India Pvt Ltd. for a total cash consideration of Rs 2,850 crore, subject to closing adjustments.

Bharat Forge: Started supply of forgings utilising green steel in order to reduce carbon footprint.

Speciality Restaurants: The board approved raising Rs 127.23 crore via issue of 60 lakh warrants convertible at Rs 212.05 each.

Torrent Pharmaceuticals: The board approved scheme of amalgamation for merger of subsidiary Curatio Health Care into itself.

JB Chemicals & Pharmaceuticals: Completed acquisition of Razel franchise from Glenmark Pharmaceuticals.

Union Bank of India: The bank considered issued AT-I bonds worth Rs 200 crore with a green shoe option of Rs 580 crore on private placement basis.

Bandhan Bank: Received a binding bid from an asset reconstruction company worth Rs 801 crore on security receipt consideration basis, for the written-off portfolio with outstanding of Rs 8,897 crore.

3M India: 3M India Ltd. will exit per and polyfluoroalkyl (PFAS) substance PFAS manufacturing by the end of 2025. The Company is in the process of assessing the implications for India business. The current annual net sales of manufactured PFAS are approximately Rs 107.74 lakh crore with estimated Ebitda margin of approximately 16%.

Source: Moneycontrol, Bloomberg Quint, Investing

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