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

Asian stocks fell after a report saying the Bank of Japan will discuss tweaking policy on Friday rumbled through financial markets. The Topix and Nikkei 225 equity indexes both slid more than 1%, leading declines in Asia. Futures for Hong Kong stocks also dropped. U.S. equities had gained earlier on Thursday as domestic gross domestic product picked up steam in the second quarter, however the equites swung to losses and the markets ended lower. Meanwhile, Brent crude was above $84 a barrel and West Texas Intermediate was below the $80-mark. The yield on the 10-year U.S. bond was trading at 4.01% and Bitcoin was below 30,000-level. At 5:33 a.m., the GIFT Nifty, an early indicator of the Nifty 50 Index’s performance in India was up 9 points or 0.05% at 19,660.

Economic Calendar:

  • USD : Core PCE Price Index (MoM) (Jun) on 28th July, 2023
  • USD : JOLTs Job Openings (Jun) on 01st Aug, 2023
  • INR : FX Reserves, USD on 28th July, 2023
  • INR : Infrastructure Output (YoY) (Jun) on 28th July, 2023

Brokerage Radar:

MS ON ACC: UW, TP Rs 1650; EBITDA much higher than expected, led by higher vol (implied utilization rate at >100%), & lower opex/t, while realizations were weaker

On a per-ton basis, EBITDA (calculated) was Rs824/t, vs forecast of Rs691/t

JPM ON SONA BLW: UW. TP Rs 450; New program wins +ve but growth expectations already in price; Rev grew 24% YoY but came in 9% softer than JPMe while EBITDA at Rs2bn (+43% YoY) was 6% below expectations; Vals (FY25EV/reve of 7.4x & 43x P/E) leave little room for margin of safety

JEFFERIES ON TECH MAHINDRA: U-P, TP cut to Rs 900; Revenues, down 4% QoQ, 440bps fall in EBIT margins & 39% QoQ decline in deal bookings disappointed.

Sharp 9% QoQ decline in CME vertical & single digit margins were key -ve surprises; Cut FY24-26 earnings est by 4-20%

International Markets

U.S & Europe:

Particulars 27th July Chg. Chg.(%)
Nasdaq 14050.11 -77.17 -0.55
Dow 35282.72 -237.40 -0.67
FTSE 7692.76 15.87 0.21
CAC 7465.24 150.17 2.01
DAX 16406.03 274.57 1.67
Dow Fut.* 35313.30 30.60 0.09

Asian markets:

Particulars 28th July Chg. Chg.(%)
GIFT Nifty 19770.00 6.00 0.03
Nikkei 32453.97 -437.19 -1.35
Straits Times 3355.70 18.28 0.55
Hang Seng 19585.87 -53.24 -0.27
Shanghai 3220.05 3.38 0.11

ADR Watch:

Particulars   27th July  Chg.       Chg.(%)
Dr. Reddy 67.94 -0.11 -0.16
HDFC Bank 68.27 -2.54 -3.59
ICICI Bank 24.17 -0.49 -1.99
Infosys 16.63 0.01 0.06
Wipro 4.87 -0.04 -0.81

Commodities & Currency

Particulars Current Price Chg.(%)
USD/INR 82.25 -0.15
Brent 83.27 -0.62
Gold 1950.20 0.23
Silver 24.317 -0.21

FIIs & DIIs:

Particulars 27th July 26th July
FIIs                          -3979.44 922.84
DIIs 2528.15 470.10

News Update:

Adani Enterprises: Adani New Industries has raised a trade finance facility of $394 million, or Rs 3,231 crore, from Barclays PLC and Deutsche Bank AG. This is to secure working capital for its integrated solar module manufacturing facility.

Lupin: The drug maker has addressed the concerns raised in the warning letter by the U.S. FDA for its Goa and Pithampur facilities through its corrective actions.

Indian Hotels: The company or one of its subsidiaries will purchase 100% equity in Pamodzi Hotels PLC, a listed company in Zambia, from Tata International Singapore PTE Ltd. It will buy 90% of Tata’s stake while acquiring the remaining 10% through the delisting process in Zambia.

JK Lakshmi Cement: The company has acquired 100% of the equity shareholding of Hidrive Developers and Industries for Rs 16.33 crore in cash. It has also agreed to raise up to Rs 2,500 crore through debt to partly finance its ongoing projects and for various growth opportunities.

Rail Vikas Nigam: The government has agreed to exercise the green shoe option in Rail Vikas Nigam’s offer for sale. It will divest an additional 1.96% stake in Rail Vikas Nigam under its green shoe option. The non-retail portion had 273% demand on Day 1.

Ipca Laboratories: The Competition Commission of India has approved Ipca Laboratories proposal to acquire a controlling stake in Unichem Laboratories. Ipca will acquire one-third of Unichem’s overall shareholding for a cash consideration of Rs 1,034.06 crore. It will make the necessary open offer to public shareholders for a 26% stake in Unichem as per SEBI regulations.

Welspun Enterprises: The company has signed a share purchase agreement with Authum Investment & Infrastructure, Sansaar Housing Finance, and Michigan Engineers to acquire a 50.10% stake in Michigan Engineers for Rs 137.07 crore in cash.

NACL: The company has been approved to foray into specialty materials and intermediates, specialty nutrition, and bioproducts. It has considered an investment of Rs 1,000 crore over the next three years for the business, including expansion of its existing manufacturing and R&D facilities for captive as well as custom development and contract manufacturing opportunities.

Source: Moneycontrol, Bloomberg Quint, Investing 

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