Indian shares were trading flat on Thursday amid volatility. Asian markets were mixed but US shares ended firm overnight. Though US inflation was at its highest in decades, it largely met economists’ expectations, cooling some fears that the Federal Reserve would have to pull back support even more forcibly than already expected.
BSE SmallCap gains 134 points
CDSL unit receives Sebi approval to set up accreditation agency
Listed depository, Central Depository Services (India) Ltd (CDSL), on Thursday announced that its wholly-owned subsidiary CDSL Ventures Ltd (CVL), has received the Securities and Exchange Board of India (Sebi) approval to set up an accreditation agency for accreditation of eligible Investors.
The recognition of CVL as an accreditation agency will be valid for a period of three years with effect from 1 February 2022.
Sebi in August 2021 had introduced a concept of ‘accredited investor’ in the Indian securities market.
Nifty Realty down 0.8%; Oberoi Realty tanks 2%
India, UK launch free trade agreement talks
NCLAT refuses Amazon interim relief in plea against CCI order on Future deal
The National Company Law Appellate Tribunal (NCLAT) on Thursday refused any interim relief to e-commerce giant Amazon in its plea challenging a CCI order that suspended an earlier approval for its deal with Future Coupons Pvt Ltd (FCPL).
Instead, the appellate tribunal, led by M Venugopal and Justice V P Singh, has directed the Competition Commission of India (CCI) and FCPL to file their reply in next 10 days and Amazon to file a rejoinder over it.
The matter will be next heard on 2 February, which is a day before the deadline for Amazon to pay the ₹202 crore fine imposed by CCI.
CBDT issues ₹1.54 lakh cr in tax refunds for AY 21-22 so far
The Central Board of Direct Taxes (CBDT) has issued income tax refunds of over ₹1.54 lakh crore to more than 1.59 crore taxpayers between 1 April 2021 and 10 January 2022, the Income Tax (IT) department said on Wednesday. Refunds of ₹53,689 crore have been issued in 1.56 cases, while corporate tax refunds of about ₹1 lakh crore have been issued in 2,21,976 cases.
Nifty Bank down 297 points dragged by HDFC, RBL Bank
Jyoti Roy – DVP- Equity Strategist, Angel One, on FY23 Budget
The finance minister will be presenting the Union Budget 2022-23 on 1 Feb which will be keenly watched by the markets. We expect that the Union Budget will focus on targeted spending while maintaining fiscal discipline. We expect the Government fiscal deficit for FY23 will be well below the budget estimate of 6.8% for FY2022 due to better than expected tax collections. We expect that the Government will continue its focus on providing support to the rural economy and manufacturing sector through increased spending and PLI schemes. We also expect the Government will increase allocation to the Infrastructure and housing sector given their high multiplier effect on the economy. We do not expect any major announcement in the Union Budget and believe that the Government will continue with its reform process even outside of the Budget.
Ramkrishna Forgings wins export order worth ₹575 million
Mindtree up 1% ahead of Q3 earnings today
Nifty Pharma up 1.7%; Sun Pharma climbs 1.7%
TVS Motor signs MoU with Swiggy to enable the adoption of EVs in delivery fleet
Mid-market trade: Sensex up 100 points
Ujjivan Small Finance Bank appoints Ittira Davis as MD, CEO
KEC International’s strong order inflows bode well for future prospects
The future prospects of KEC International Ltd look bright with good order inflows being reported by the company. It recently announced robust multiple order wins across segments worth ₹1,025 crore.
The outlook for order inflows in FY23 remains strong with expected rise in ordering from railways and civil projects.
The stock prices are up about 7% since order win announcements a few days back. (Full report)
Nifty Metal jumps 2.6%; Jindal Stee, Tata Steel lead pack
TCS announces buyback: What does it mean for its stock?
Cash-rich Tata Consultancy Services (TCS) Ltd is walking the talk on its capital return commitment made to investors. It has announced a buyback of up to 4 crore shares with the IT company buying shares at ₹4,500 per share. This is nearly 17%, premium compared to its last traded price of the stock when this buyback was announced, analysts note.
The stock is trading at a one-year forward price-to-earnings multiple of around 31 times and is the most expensive listed technology stock, showed the Bloomberg data. Analysts note that stock’s FY23 valuation multiple is around 60% premium to its long-term average. (Full story)
Posco, Adani tie up to develop integrated steel mill at Mundra; to look at more tie ups
South Korean steel giant Posco is making aggressive bets in India, for which it has signed an agreement with Gautam Adani-promoted Adani Group to set up an integrated steel mill at Mundra with an investment of around $5 billion.
Prior to entering Gujarat, the South Korean steel major had tested waters in Orissa and Karnataka and had a successful operation in Maharastra.
Market view: Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments
“The index seems to be in the midst of a jubilant wave and en route to 18500 as the next level of target and resistance. With good support at 17800, traders can use intraday dips or corrections to accumulate long positions on the Nifty.”
Trident hits 52-week high
Rupee in narrow range
The Indian rupee was trading in a narrow range in morning trade on Thursday as muted domestic equities and weak domestic macroeconomic data weighed on investor sentiments.
At the interbank foreign exchange, the rupee opened at 73.91 against the American dollar, then inched higher to 73.89, registering a rise of 4 paise from the last close. The local unit also touched 73.97 in early deals.
Tata Motors down 2%
The automaker said JLR sales continued to be constrained by semi-conductor shortages. Retail sales for the quarter ended 31 December were 80,126 vehicles, down 13.6% from the preceding September quarter and 37.6% from the same quarter a year ago.
L&T hits 52-week high
Gold a tad up
Gold prices are trading up by 0.1% at ₹47,826 per 10 grams. Meanwhile, silver prices are trading at ₹61,883 per kg.
Gold held near a one-week high hit in the previous session, as the US dollar and Treasury yields retreated after inflation data came in line with expectations and reiterated the need for a quicker interest rate hike.
In global markets, spot gold was flat at US$1,824.55 per ounce while US gold futures were down 0.2% to US$1,824.
Yes bank on CPI Inflation: Higher but due to unfavorable base
· India’s CPI inflation increased by 5.6% YoY in December from 4.9% YoY in November.
· On sequential basis, the Headline CPI Index was lower by 0.4% in December compared to the last month, implying that an adverse base effect was behind this rise.
· Core inflation remains sticky at 6.2% but with no clear evidence of pass-through from the WPI or being demand-led.
· While we believe that the RBI will continue to support growth and delay any monetary policy tightening through a rate action, its hands might get tied by the US Fed who is now priming the markets for a balance-sheet run-off to start close to the onset of Fed rate increases.
· We expect 50bps increase in the repo rate for FY23 in Q1 and Q3
BSE MidCap weak
Covid-19: India registers nearly 2.5 lakh cases in 24 hours, highest in 8 months
India added 2,47,417 new coronavirus infections taking the total tally of cases to 3,60,70,510 according to the Union Health Ministry data updated on Thursday.
Of the total 5,488 cases of Omicron variant, 2,162 people have recovered or migrated so far.
Bank Nifty down nearly 1%
Infosys up 1.5% post earnings
India’s second-largest software services firm on Wednesday reported an 11.8% rise in consolidated net profit to ₹5,809 crore for December quarter. The firm also increased its revenue growth guidance for FY22 to 19.5-20%. The IT giant’s revenue grew 22.9% to ₹31,867 crore.
Wipro down 5%, biggest laggard on indices
The company reported ₹2,969 crore profit for the third quarter of the current financial year, a tad higher than ₹2,968 crore recorded during the same quarter of last year. The company’s gross revenue during the quarter stood at ₹20,313 crore ($2.7 billion), posting an increase of 29.6% year-on-year and 3.3% quarter-on-quarter.
Nifty above 18,254
Sensex up 100 points; TCS, Infy up, Wipro biggest laggard
Markets open higher
Sensex players at pre-open
Indices in the green at pre-open
Yes Bank seeks ₹12,000 cr for ARC
Yes Bank Ltd, which is in the process of selecting a partner for an asset reconstruction company (ARC) to warehouse a large portion of its bad loans, is seeking as much as ₹12,000 crore from potential investors, two people directly aware of the ongoing negotiations said.
The private sector lender, which plans to transfer non-performing assets (NPAs) of close to ₹54,000 crore to the ARC by the end of the current fiscal, is seeking bids anywhere between ₹10,000 and ₹12,000 crore, the people said, requesting anonymity. The bank has sought binding bids by 25 January from private equity investors. (Read more)
Piyush Pandey, lead analyst – Institutional Equities, YES Securities on Wipro Q3 result
Both revenue and EBIT margin slightly below expectation. Reported revenue of ₹203.1bn( up 3.3% QoQ in INR terms- below expectation ). IT services revenue grew 2.3% QoQ in USD terms to $2.64bn. The revenue growth was led by strong performance in BFSI snd consumer verticals.
EBIT margin was down 37 bos QoQ to 16.9%, mainly led by higher employee cost ( cost of revenue) that grew 4.2% sequentially.
Deal booking remained strong as it closed 11 large deals with TCV of over $600 mn.
Total number of active customers increased by 31 QoQ to 1315. Total number of headcount increased by ~10,300 QoQ to 231,671. Net utilization was down 340 bos QoQ to 85.8 %, led by higher fresher onboarding and seasonal factor.
LTM attrition increased by 220 bps QoQ to 22.7%, as demand for talent remains strong.
Declared an interim dividend of ₹1/ share.
Guided for sequential revenue growth of 2-4% QoQ for Q4FY22.
We currently have ‘Add’ rating on the stock.
India’s industrial growth slows, inflation soars
India’s December retail inflation quickened to a five-month high of 5.56% amid soaring food prices, while industrial growth slipped to a nine-month low of 1.4% as pent-up demand during the festive months failed to sustain in November.
The unwelcome combination poses a dilemma for the RBI, which needs to raise interest rates to contain inflation even as businesses need monetary support to revive growth and add jobs. (Full report)
TCS hits $25 bn revenue; Infosys raises guidance
India’s three leading software services companies—Tata Consultancy Services Ltd (TCS), Infosys Ltd, and Wipro Ltd—kicked off the earnings season on Wednesday, reporting strong revenue numbers for the seasonally weak fiscal third quarter.
Infosys outshone its rivals, raising its full-year revenue growth forecast to 19.5-20% in constant currency from the 16.5-17.5% it had predicted earlier, citing strong demand.
Wipro, which forecasts for the quarter ahead, expects its March quarter revenue to grow in the range of 2-4% in constant currency from the preceding three months, translating to full-year growth of 27-28%. TCS does not give a revenue growth forecast but has indicated an upbeat outlook.
TCS’s net profit for the December quarter grew 12.3% from a year ago to ₹9,769 crore on the back of robust revenue growth of 16.3% to ₹48,885 crore. Consensus Bloomberg estimates pegged TCS’s profit at ₹9,980 crore and revenue at ₹48,533 crore. The Mumbai-based company’s dollar revenue grew 15.4% in constant currency to $6.52 billion.
Oil prices slipped on Thursday, trimming big gains from the previous two sessions, amid uncertainty over near-term demand as cases of the highly contagious Omicron variant of the coronavirus surge around the globe.
U.S. West Texas Intermediate (WTI) crude futures slipped 7 cents, or 0.1%, to $82.57 a barrel, after climbing 1.7% in the previous session. Brent crude futures shed 6 cents, or 0.1%, to $84.61 a barrel, after rising 1.3% on Wednesday.
Biden imposes first sanctions over North Korea weapons program after missile tests
The Biden administration on Wednesday imposed its first sanctions over North Korea’s weapons programs following a series of North Korean missile launches, including two since last week.
The sanctions targeted six North Koreans, one Russian and a Russian firm Washington said were responsible for procuring goods for the programs from Russia and China.
The U.S. Treasury said the steps aimed both to prevent the advancement of North Korea’s programs and to impede its attempts to proliferate weapons technologies. (Reuters)
Stocks to Watch: TCS, Infosys, Wipro, Tata Motors, Kotak Mahindra Bank
Besides the ten companies, shares of firms like Tata Metaliks, GTPL Hathway, CESC and Mindtree will be in focus as they announced their December quarter earnings today
Asia stocks mixed
Asia stocks were mixed Thursday. Nikkei index fell 0.37%; Australia’s S&P/ASX 200 Index rose 0.6%; Hang Seng Index rose 0.4%; Kospi index and Shanghai Composite Index was little changed
US stocks rise overnight
US stock indexes rose on Wednesday after data showed that while US inflation was at its highest in decades, it largely met economists’ expectations, cooling some fears that the Federal Reserve would have to pull back support even more forcibly than already expected.
The Dow Jones Industrial Average rose 38.3 points, or 0.11%, to 36,290.32, the S&P 500 gained 13.28 points, or 0.28%, to 4,726.35 and the Nasdaq Composite added 34.94 points, or 0.23%, to 15,188.39.
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