05/06/2024
News & Impact
· Focus Today –MPC meeting commence from today – Friday RBI policy. Cabint meeting at 11.30am. FIIs sold Rs22000cr both cash (Rs12000cr) and F&O yesterday. Gift Nifty is up 130 points or 0.6%. Hindalco’s Novelis Postpones Planned $945mn IPO. US market bounced back into positive territory after job openings hit the lowest since 2021 – US 10-Year Bond 1-month low at 4.3%. Oil price fell to 4-month low at $77/bbl. Focus on FMCG, AUTO, IT stocks
· Market Update Today – The market is expected to open on a flat note, with intra-day volatility likely to continue until there is stability in the political environment. The market will be closely monitoring political trends in the next few days. Traders are advised to avoid aggressive buying until a clear trend emerges. Gift Nifty rose over half a percent after Narendra Modi vowed to continue as prime minister for a third term. The BJP-led National Democratic Alliance (NDA) was leading in more than 290 seats, slightly above the 272 needed for a majority in parliament, but well short of the roughly 350 they won in the 2019 election. A stable and strong government will be positive for market sentiment. Positive sentiment in the market is also driven by a rally in global markets, a fall in oil prices to a four-month low, strong domestic GDP data, hopes of a good monsoon, and a sharp decline in the fiscal deficit. Yesterday, Nifty recorded its largest single-day fall in over four years, and the Sensex crashed by over 4,000 points after election tabulation showed the ruling party BJP struggling to win a majority of seats in the national elections. Among the global markets, the US market gained 0.3% after reporting a 3-year low in job openings and expectations of a US Fed interest rate cut. The US 10-Year Bond Yield fell to a 1-month low at 4.30%. Traders should focus on FMCG, auto, IT, metal, and oil & gas stocks.
· Global Market Summary –US market gained after reported 3-year low job opening. Oil price fell to 4-month low at $77/bbl as weak demand and hope of rising OPEC+ supply. US 10-Year Bond Yield fell to 1-month low at 4.30%
· US Market – US market bounced back into positive territory on expectation of US Fed tom cut interest rate after reported softer-than-expected labor market data. Both Nasdaq and Dow Jones Index gained 0.3% each.
· Asian Market –.Asia market are witnessing mixed bag. Australia, South Korea Index, Taiwan Index gained 0.5% after US data showed job openings hit the lowest since 2021. Expectation that the US Fed to cut interest rate. Japan Index slipped 1%.
· European Market – European stocks fell, with oil majors leading the decline, while traders looked ahead to key data on the US economy and a European Central Bank interest-rate decision. Germany Index slipped 1% while UK and France Index shed 0.5% each.
· Gold – Gold declined nearly 1% to $2326/ounce as technical selling intensified despite data showing further signs of a slowdown in the US labor.
· Oil Price Update – Oil held losses near a four-month low as an industry report pointed to an increase in US crude stockpiles, adding to bearish sentiment compounded by OPEC+’s plan to boost supply. Brent Crude decline 1% to $77/bbl.
· Nifty Technical Level – Nifty formed a big Bearish candle on daily frame with longer lower shadow and closed with massive losses of around 1380 points. Now till it holds below 22222, it may witness some more profit booking decline towards 21600 then 21300 zones while on the upside hurdles are seen at 22222 and 22500 zones.
· Bank Nifty Technical Levels – Banknifty formed a big Bearish candle on daily scale as Bears were dominating for most part of the day and ended with massive losses of around 4000 points. Now till it holds below 47777 zones more weakness could be seen towards 46000 then 45500 levels while on the upside hurdle is seen at 47777 then 48500 zones.
· Previous Day Market Summary – Equity benchmark Nifty recorded its largest single-day fall in over four years, and the Sensex crashed by over 4,000 points after election tabulation showed the ruling party BJP struggling to win a majority of seats in the national elections. However, the BJP-led National Democratic Alliance (NDA) was leading in more than 290 seats, slightly above the 272 needed for a majority in parliament, but well short of the roughly 350 they won in the 2019 election. A narrower-than-expected victory for the NDA's alliance is seen as a major problem for the new government’s ability to push through reforms, which could be a setback for sustaining domestic economic growth. As a result, the Nifty tumbled intra-day by as much as 8.5%, coming close to hitting its first circuit limit since the COVID-era crash in March 2020. The Nifty ultimately slipped 1,379 points, or 5.7%, to close below the 22,000 level at 21,884, after touching an intra-day low of 21,281.
· Major Events India - MPC meeting from today – Friday RBI policy. Cabinet meeting today.
· Actionable BUY – Hindustan Unilever, Dabur India, Infosys, Tata Consumer, Tata Moror
· Corporate Action – Gujarat Toolroom: Right Issue, Manappuram Finance: Dividend Rs.1 and Sharda Motor Industries: Buyback.
· Brokers Radar – Brensston TGT on SBI at 810, ICICI Bank TGT at 1250, HDFC Bank TGT at 2100 and Axis Bank TGT at 1250. CLSA TGT on HAL at 4731. Jeffries TGT on Jefferies CLSA TGT on BEL AT 294.
· Global Data Today – US: S&P Global US Service & Composite PMI. UK, France & Germany: Services & Composite PMI. Japan: Jibun Bank Japan Composite & Services PMI. India: HSBC India Composite & Services PMI. China: Caixin China PMI Composite & Services PMI. France: Industrial Production YoY
· Market Summary – Hindalco’s Novelis Postpones Planned $945mn IPO. . Tata Motor board approve board okays to incorporate new wholly-owned unit. Infosys in pact with Nihon Chouzai, Mphasisi In pact with Classiq, Reliance Leases $1.6bn land to develop Industrial Hub & PNB Approves Sale of 10% Stake in Canara HSBC Life via IPO. ZEEL eyes fundraising options post Sony merger cancellation.
· Hindalco – US based Hindalco’ subsidiary Novelis said it’s delaying its planned $945mn IPO due to market conditions. The company will continue to evaluate the timing of the offering in the future. – Any sharp decline will be long term buying opportunity.
· Tata Motors announced the demerger of its commercial and passenger vehicle segments into two separate listed entities to better capitalise on growth opportunities. Company’s board has approved to set up a wholly-owned subsidiary to house commercial vehicles business. The company has proposed the name of the new unit as TML Commercial Vehicles Ltd (TMLCVL). – positive
· Vodafone Idea: CARE Ratings revised rating assigned to long-term bank facilities to CARE BB+ from CARE B+ with outlook maintained as Stable. Ratings on short-term bank facilities also revised to CARE A4+ from CARE A4.- positive
· Zee Entertainment – Company announced on June 1 that it is considering raising funds. The potential fundraising methods include the issuance of equity shares, private placement, qualified institutions placement, preferential issue, or a combination of these methods.- long term positive
· NLC India – Company is considering loan worth $600mn via ECB - positive
· Shilpa Medicare: The company's wholly owned subsidiary filed its first drug master file of recombinant human albumin 20% with the USFDA – positive
· Container Corp: The company signed a MoU with Shipping Corp. to provide end-to-end logistics solutions.- positive
· Jindal Stainless – Company said that it has completed the100% acquisition of Evergreat International Investment Pte Ltd Singapore (EIPL), a wholly owned subsidiary, and Chromeni Steels PVT – Positive
· Infosys – Company in pact to expand healthcare access in Japan Develops application NiCOMS, to help patients access remote consultations & online payments - positive
· Delton Cables – Company wins Rs170cr order from EPC companies for power cables - positive
· Mphasisi – Company announced a strategic partnership with Classiq, a quantum software company, to commercialise Quantum-powered industry solutions. Company stated that the alliance aimed to expedite enterprise use of quantum computing products. Classiq claims that it has created a platform for designing quantum algorithms more quickly and efficiently. -positive
· Reliance - Reliance Industries’ units have sub-leased 3,750 acres of land in western Indian state of Maharashtra for Rs13400cr ($1.6 billion). The company will develop an integrated industrial hub on the land in Navi Mumbai, near Mumbai. – Long term positive
· PNB - Cmpany approves initiating sale of 10% stake in Canara HSBC Life Insurance Co. via an initial public offering. Company holds 23% in the insurance firm– Positive
· Wipro – Company Launches an AI-Assisted Security and Risk Platform, Powered by Zscaler (Businesswire) Wipro Limited announced that it has partnered with Zscaler to introduce Wipro Cyber X-Ray, an AI-assisted decision support platform. – long term positive
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