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Think Ahead with EZWealth – 14 Oct 2021
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Indian stocks scaled new heights with the Nifty closing above 18,000 for the first time ever on Wednesday, shrugging off nervous sentiment in Asian markets, which were weighed down by worries about the effects of rising energy prices on inflation and economic recovery. Now that the resistance of 18000 is done with, experts believe that 18600 is achievable within this month.
The S&P 500 and Nasdaq ended higher on Wednesday, led by gains in shares of big growth names like Amazon.com and Microsoft, but JPMorgan shares fell along with other bank shares and weighed on the market. The Dow Jones Industrial Average fell 0.53 points to 34,377.81, the S&P 500 gained 13.15 points, or 0.30%, to 4,363.8 and the Nasdaq Composite added 105.71 points, or 0.73%, to 14,571.64.
London’s FTSE 100 index edged higher by 0.16 per cent on Wednesday to hit 7,141.82, while the broader STOXX Europe 600 index climbed 0.77 per cent to 460.73
Tata Motors (Rs 9853 crore), Tata Power (Rs 6663 crore), Tata Chemicals (Rs 2300 crore), BHEL (Rs 2145 crore), Tatat Steel (Rs 1803 crore), M&M (Rs 1644 crore), IRCTC (Rs 1584 crore), Zee Entertainment (Rs. 1408), Avenue Supermarts (Rs. 1339) and TCS (Rs 1296 crore) were among the most active stocks on Dalal Street in value terms.
Tata Power (Shares traded: 30 crore), BHEL (Shares traded: 28.4 crore), Tata Motors (Shares traded: 19.8 crore), Vodafone Idea (Shares traded: 17.7 crore), IDBI Bank (Shares traded: 11.9 crore), Union Bank (Shares traded: 9.3 crore) and PNB (Shares traded: 8.3 crore) were among the most traded stocks in the session.
1) Prime Minister (PM) Narendra Modi on Wednesday launched the Rs 100-trillion Gati Shakti or the national master plan for multimodal connectivity to expedite infrastructure (infra) project implementation, thereby accelerating economic growth.
The PM Gati Shakti National Master Plan will provide accurate information and guidance for the completion of the government’s projects within a stipulated time frame, making policymaking effective and eliminate unnecessary government expenditure, he said at the launch of the master plan in the national Capital on Wednesday.
Gati Shakti, spearheaded by the Department for Promotion of Industry and Internal Trade, is a digital platform bringing 16 ministries, including rail and roadways, together for integrated planning and coordinated implementation of infra connectivity projects.
2) India will witness close to double-digit economic growth this financial year (FY22), which would be the highest among the major economies of the world, Finance Minister Nirmala Sitharaman has said. The economy is expected to grow at 7.5-8.5 per cent — as projected by rating agencies — in the next financial year, and the growth would sustain at this range for the next decade, she said on Tuesday.
The remarks come close on the heels of many institutions projecting 9.5 per cent growth for India in FY22, including the International Monetary Fund and the Reserve Bank of India. Fitch Ratings and the World Bank expect the economy to post sub-9 per cent growth, while the Asian Development Bank pegged it in double digits.
3) To rein in spiralling edible oil prices and facilitate their availability during the upcoming festive season, the government on Wednesday scrapped basic customs duty and agriculture infrastructure and development cess (AIDC) on various crude varieties of palm, soyabean and sunflower oils till March 31, 2022.
The base import tax on crude palm oil has been slashed to 2.5 per cent from 10 per cent, while the tax on crude soyoil and crude sunflower oil has been reduced to 2.5 per cent from 7.5 per cent. The base import tax on refined grades of palm oil, soyoil and sunflower oil cut to 32.5 per cent from 37.5 per cent.
After the cuts, crude palm oil, soyoil and sunflower oil imports will be subject to a 24.75 per cent tax in total, including a 2.5 per cent base import duty and other taxes, while refined grades of palm oil, soyoil and sunflower oil would carry a 35.75 per cent tax in total. High prices of edible oils in international markets impact domestic prices of these commodities.
4) India is suffering its worst power shortage in October since March 2016 due to a crippling coal shortage, a Reuters analysis of data from federal grid regulator POSOCO showed.
Power supply fell about 750 million kilowatt hours short of demand during the first 12 days of October, a deficit of 1.6% that was the worst in five and a half years, the data showed. The October shortfall was already the biggest in absolute terms for a single month since November 2018, even with 19 days of October still left. The shortfall this month already accounts for 21.6% of the total deficit this year.
Northern states such as Rajasthan, Punjab, Haryana and Uttar Pradesh, and the eastern states of Jharkhand and Bihar, were the worst affected, registering supply deficits of 2.3%-14.7%. Increased economic activity after the second wave of the coronavirus pandemic has driven up demand for coal leading to a supply shortage, forcing northern states such as Bihar, Rajasthan and Jharkhand to cut power for up to 14 hours a day.
5) Because of Covid-19 and policies put in place to respond to it, the global debt has jumped to a new high of $226 trillion, the International Monetary Fund (IMF) said on Wednesday. Advanced economies and China contributed more than 90 per cent to the accumulation of worldwide debt in 2020. The remaining emerging economies and low-income developing countries contributed only around seven per cent.
“Because of Covid 19, and of policies put in place to respond to it, debt levels increased fast and reached high levels. High and rising levels of public and private debt are associated with risks to financial stability and public finances,” IMF Director of Fiscal Affairs Department Vitor Gaspar told reporters during a release of the 2021 Fiscal Monitor Report. “The debt of governments, households and non-financial corporations added up to $226 trillion in 2020 — $27 trillion above 2019. This increase is, by far, the largest on record,” he said. This figure includes both public and non-financial private sector debt.
Stocks in the news today:
Results on October 14: HCL Technologies, Indiabulls Real Estate, Benares Hotels, Century Textiles, Cyient, Den Networks, Ganesh Housing Corporation, GTPL Hathway, Inox Wind, Inox Wind Energy, Mahindra CIE Automotive, Radhe Developers, Superior Finlease, Vikas EcoTech, and Vikas Lifecare will release September 2021 quarter earnings on October 14.
Results on October 16: HDFC Bank, Avenue Supermarts, Aarnav Fashions, Artson Engineering, Infomedia Press, Sangam (India), and VR Woodart will release September 2021 quarter earnings on October 16.
Infosys: The company reported higher consolidated profit at Rs 5,421 crore in Q2FY22 against Rs 5,195 crore in Q1FY22, revenue jumped to Rs 29,602 crore from Rs 27,896 crore QoQ. Dollar revenue increased to $3,998 million from $3,782 million in the same period
Wipro: The company reported a 6.9% QoQ growth in IT services segment revenue at $2,580 million in Q2FY22, and its constant currency IT services segment revenue increased by 8.1% QoQ in the same period. It expects 2-4% growth in constant currency IT services segment revenue in Q3FY22.
Mindtree: The company’s net profit increased by 16.2% to Rs 399 crore and revenue grew by 12.8 percent to Rs 2,586.2 crore in Q2FY22 on sequential basis. The dollar revenue at $350.1 million grew by 12.8 percent sequentially
UltraTech Cement: The company commissioned 1.2 mtpa cement capacity in October 2021, which will help the company to service the fast-growing cement demand in the Eastern markets.
KEC International: The company has completed the acquisition of Spur Infrastructure and hence, Spur Infrastructure is now a wholly owned subsidiary of the company.
Welspun India: The company launched one of the largest traceability and ESG transparency rollouts in the textile industry with Wel-Trak 2.0 blockchain, an upgrade to Wel-Trak, the company’s patented end-to-end traceability technology introduced in 2018.
India’s largest airline IndiGo expects Tata Sons to be “formidable competition” once the conglomerate finalises its $2.4 billion purchase of Air India from the government, the budget airline’s chief executive said.
The Gujarat government has agreed to buy 1800-Mw power from Tata Power’s ultra mega power plant at Rs 4.50 per unit, higher than tariff agreed in its executed contract, for four weeks. The move is expected to reduce spot electricity prices to some extent as Gujarat is one of the top buyers on power exchanges off-taking about 4,000-Mw daily at about Rs 13 per unit.
FMCG stocks: Some of the fast-moving consumer goods companies, particularly in the foods segment could profit from the reduction in customs duties on edible oil. The central board of indirect taxes and customs has scrapped import duties on crude varieties of palm oil, soyabean oil and sunflower oil until 31 March 2022. However, duties on refined soya oil and refined sunflower oil still remain in place.
Infrastructure sector stocks: The government on Wednesday launched the PM Gati Shakti scheme under which a ₹100 trillion national master plan for multi-modal connectivity has been drawn up to develop infrastructure and to reduce logistics costs and boost the economy. The move is expected to benefit chiefly the infrastructure sector, and allied sectors stand to benefit from the move. Although the scheme was launched during trading hours, its full import might be factored in and could spill over into Thursday.
JSW Steel: The chairman and managing director of JSW Steel Ltd, Sajjan Jindal, has been elected chairman of the World Steel Association (WSA) for 2021-22. Jindal is the first representative from India to serve as chairman of the WSA. Worldsteel acts as the focal point for the steel industry, providing global leadership on all major strategic issues impacting the industry, particularly focusing on economic, environmental and social sustainability. The election of Jindal gives the steel industry in India added leverage in the global affairs of the industry and could factor in trading today.
Puravankara Ltd: Realty firm Puravankara Ltd will invest around ₹420 crore for construction of two residential projects in Mumbai and Bengaluru and is targeting over ₹1,250 crore sales revenue over the next four years from these properties on the back of rising housing demand. The company on Wednesday launched two projects—‘Provident Palm Vista’ located near Shil Phata, Mumbai with one million square feet of saleable area and ‘Tivoli Hills’ located near Devanahalli, Bengaluru having a total saleable plot area of about 1.4 million square feet. The stock, which has been in the red for the week, could get a fillip from the proposed move.
Utilities stocks: The coal shortage, which the government has been in denial of, is likely to impact the power sector if necessary measures are not adopted. It has been reported that as of Tuesday, 61 of India’s 135 coal-fired plants have supplies that will last two days, or less. The situation is likely to further impact the power sector adversely. Stocks in the sector could feel the heat of the developing situation.[/vc_column_text][vc_column_text]
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