Market View 7th November 2023

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

Asian stocks opened lower as fresh doubts emerged on whether the Federal Reserve has finished with rate hikes, with Wall Street shares struggling to gain much traction amid a rise in bond yields. Australian stocks opened down. South Korean KOSPI corrected and Japanese markets opened lower. Wall Street’s Monday malaise came after it notched its best week of 2023 amid dovish Fed bets, oversold technical levels and positioning. Investors will be looking to a potential interest rate increase from the Reserve Bank of Australia, after a four-meeting pause in rate hikes. Meanwhile, the yield on the 10-year U.S. bond was trading at 4.63% and Bitcoin was above 35,000-level. Brent crude was trading above $85 a barrel, whereas WTI Crude was above $80-mark.

Economic Calendar:

• USD: Fed Chair Powell Speaks on 8^th November, 2023
• USD: Crude Oil Inventories on 8^th November, 2023
• INR: Thomson Reuters IPSOS PCSI (MoM) (Nov) on 10^th November, 2023
• INR: Manufacturing Output (MoM) (Sep) on 10^th October, 2023

Brokerage Radar:

CITI on Thermax: Main positive in result was healthy EBITDA margin at 8.9% v/s 6.8% in 1QFY24 and 2QFY23. Half of this margin expansion is sustainable while other half is one-time (i.e. relating to execution of large profitable projects in 2Q). Val at 49x expensive.

CLSA on GSPL: Stock price implies its core gas transmission business is available for just 3.4x FY25 PER, stripping-out value of its 54.2% stake in GGas at CMP, even after a 20% holding co disc.

CITI on SAIL: Downgrade to Sell, TP cut to Rs 80 from Rs 110 Domestic Steel Price Concerns No Relative Val Comfort; at 0.6x P/B, trades at a disc. to large peers; however, this is offset by low-single-digit ROE expectations (3%) vs (8-18%) for others Cut FY25-26E EBITDA by 6-7%.

GS on Gland Pharma: Buy, TP Rs 1750 2Q above GSe/Street with sales/EBITDA growing 32%/6% yoy, primarily on a/c of beats from US/core markets as well as Cenexi contribution EBITDA margin also above est. at 23.6%(+85bps vs. GSe),primarily driven by recovery in core biz.

International Markets

 U.S & Europe:

Asian markets:

ADR Watch:

Commodities & Currency:

FIIs & DIIs:

News Update:

Cipla: The drugmaker approved the transfer of the generics business to the unit Cipla Pharma and Life Sciences. The generics business will be transferred for a consideration of Rs 350 crore. The sale will be completed by Dec. 31, 2023.

Bajaj Finance: The company opened QIP on Nov. 6, 2023, with a floor price set at Rs 7,533.81 per equity share. The floor price is at a discount of 0.37% to the stock’s closing price of Rs 7,562.05 on Monday.

K.P.R. Mill: The company approved an investment of Rs 250 crore for the expansion of fabric processing capacity. Fabric processing capacity is set to increase from 25,000 MT to 37,000 MT per year. It also approved an investment of Rs 100 crore to increase solar power generation capacity to 37 MW.

Central Bank of India: Ministry of Finance extended MV Rao’s term as MD and CEO till July 31, 2025, from the current notified term ending on Nov. 29, 2024.

Quess Corp: The company approved buying a 4.5% stake in Vedang Cellular Services from the promoter for Rs 6.05 crore, increasing its total stake to 96.97%. The board also approved the acquisition of an additional 46.09% stake in unit Stellarslog Technovation for Rs 6.8 crore, increasing its total stake to 100%.

Source: Moneycontrol, Bloomberg Quint, Investing 

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