Market View 23rd February 2023

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

Asia markets are primed for a cautious open after the U.S. shares fell, weighed down by Federal Reserve meeting minutes that underscored the central bank’s hawkish outlook and prompted investors to increase forecasts for interest rate hikes. The S&P 500 closed down 0.2% for its fourth consecutive decline while the Nasdaq 100 managed to edge into positive territory in the final minutes of Wall Street’s Wednesday session. A rally in Treasuries moderated after the Fed minutes were released. The Fed minutes showed officials expect further interest rate increases to tame inflation. On the other hand, as per Wednesday’s MPC minutes, the members from the RBI remained committed to bringing inflation within the target, while the external member Jayanth R Varma expressed the need to exercise caution amidst headwinds to growth. RBI Governor, Shaktikanta Das said, “we must remain unwavering in our commitment to bring down inflation, while being mindful of growth.” At 5:40 a.m., the Singapore-traded SGX Nifty, an early indicator of India’s benchmark Nifty 50, was up 0.10% at 17,574. Benchmark indices Sensex and Nifty extended their decline for the fourth consecutive session as they crashed 1.5% each—the most in two weeks—tracking weakness in the global markets. Rupee closed lower against the U.S. dollar for the second day in a row as the greenback and U.S. yields surged on hopes of more Fed hikes.

Economic Calendar:

• USD : FOMC Meeting Minutes on 23rd February, 2023
• USD : GDP (QoQ) (Q4) on 23rd February, 2023
• INR : Deposit Growth on 24^th February, 2023
• INR : GDP Quarterly (YoY) (Q3) on 28^th February, 2023

Brokerage Radar:

JPM ON TVS MOTORS: OW, TP Raised to Rs 1330; While electrification is viewed as a risk for legacy ICE OEMs, it is turning out to be a market-share growth opportunity for TVS (10%/17% mkt-shr in EV in FY23TD/4QTD vs. 15.9%/18.3% in ICE); Raise valuation multiple to 27x

CITI ON STEEL: Add SAIL with Tata Steel as top picks; Spot spreads below 3Q – upsides in prices offset by raw material price resilience; However, normalizing coking coal prices to $350, think at 6x EV/EBITDA, most pricing in close to existing spreads, except JSW Steel

JPM ON POWER GRID: OW, TP Rs 255; India’s power demand growth and recurring spikes in deficit will drive a capex upcycle; Electrification can result in growth multiple of >0.9x GDP of the past. Generation capacity target is at 10% CAGR to meet demand.

International Markets:

U.S & Europe

Asian markets

ADR Watch:

Commodities & Currency

FIIs & DIIs:

News Update:

Biocon: Kotak Special Situations Fund invested Rs 1,070 crore in the company, which will be utilised by the latter’s subsidiary—Biocon Biologics—to fund its acquisition of the biosimilars business of its partner Viatris.

Tata Steel: The company acquired 4.69 crore shares of its indirect subsidiary of Neelachal Ispat Nigam at Rs 64 apiece, aggregating to Rs 300 crore in the first tranche of investment in the equity shares of the latter.

Orient Cement: The non-binding MoU between the company and Adani Power Maharashtra for establishing a cement grinding unit at Tiroda, Maharashtra stands terminated as the latter could not obtain the required MIDC clearances for sub-leasing the land required for the facility.

HG Infra Engineering: The company has been declared as the preferred bidder by Rail Vikas Nigam, Chandigarh for a project for construction of foundations, sub-structure and superstructure along the Bhanupali-Bilaspur-Beri new railway line in Bilaspur district of Himachal Pradesh.

Lemon Tree Hotels: The company signed a licence agreement for a 47-room property in Bhopal, Madhya Pradesh, which is expected to become operations by December 2023 and will be operated by subsidiary Carnation Hotels.

Hero MotoCorp: The company, through its electric mobility brand Vida, initiated operations of its public charging infrastructure in Bengaluru, Delhi and Jaipur.

Wipro: The company launched Decentralised Identity and Credential Exchange ID to make digital identification and credential verification faster, easier and more secure.

Source: Moneycontrol, Bloomberg Quint, Investing

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