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Market Ahead with EZWealth – 7 Oct 2021

 

[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]The market caught in bear trap and corrected around a percent on October 6 as the selling was seen across sectors with Metals, Auto, IT and Pharma being major losers amid weak global cues.

The BSE Sensex fell 555.15 points to 59,189.73, while the Nifty50 declined 176.30 points to 17,646 and formed a bearish candle on the daily charts. In NIFTY, 17,500 – 17,450 would be seen as crucial supports. A violation of lower range would be seen as first sign of weakness. Before the recent highs, 17,750 – 17,850 are to be treated as immediate resistances and the way things panned out on Wednesday

Foreign institutional investors (FIIs) net sold shares worth Rs 802.81 crore, while domestic institutional investors (DIIs) net sold shares worth Rs 998.69 crore in the Indian equity market on October 6

U.S. stocks rose Wednesday, a healthy turnaround after a morning marked by broad losses across sectors. The Dow Jones Industrial Average fell as much as 460 points in the morning before rallying in the afternoon and ending the day more than 100 points higher.

 

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Stories in the news today:

1) The Union Cabinet on Wednesday approved the setting up of 7 Mega Integrated Textile Region and Apparel parks with a total outlay of Rs 4,445 crore for five years to position India strongly on the global textiles map. Mega Integrated Textile Region and Apparel (PM MITRA) parks were announced in the Union Budget for 2021-22.

The parks will be set up at greenfield/brownfield sites located in different willing states. Proposals of state governments having ready availability of contiguous and encumbrance-free land parcels of 1,000 plus acres along with other textiles related facilities ecosystem are welcome, said an official release.

 

2) The Centre will redesign norms for coal supply and its storage at thermal power plants to avoid a demand-supply mismatch. The Ministries of Coal and Power have jointly decided to draft a monthly coal supply programme for thermal power units to keep a normative 40-million tonne (mt) stock, cumulatively, at power units by end-March.

The current stock at thermal power units stands at 7.3 mt, said executives. Coal India (CIL), however, has increased despatches and is aiming at supplying close to 3 mt by the end of this month, they added. Since August, coal stock levels at thermal units have dwindled. Currently, 17 gigawatt (Gw) of power generation capacity has zero days of coal stock and 21 Gw has less than four days of coal.

 

3) The rupee tumbled to the almost 75 a dollar level and the 10-year bond yields remained elevated on Wednesday, shrugging off India’s outlook revision by Moody’s, as international crude oil prices rose to a seven-year high, fuelling concerns about a wider fiscal deficit and rising inflation.

The rupee closed at 74.98 a dollar, briefly touching 74.99 during the day, at which point the Reserve Bank of India (RBI) intervened to prevent it from breaching the psychologically important mark of 75. The rupee’s closing level was its lowest since April 23.

The US dollar index, which measures the greenback’s strength against major global currencies, crossed 94, pulling down most currencies pegged against it. The rupee lost the most in Asia, falling 0.71 per cent intra-day against the dollar. The 10-year bond yield closed at 6.28 per cent, its highest level since April 17, 2020. The sticky yields complicate the task for the six-member monetary policy committee (MPC), which is meeting for three days starting Wednesday.

While other emerging market central banks have been increasing rates, the Indian central bank has maintained that it would retain its accommodative stance till signs of durable growth are visible. But the rise in crude oil prices, coupled with coal shortages, could prod the central bank to assume a hawkish stance.

 

4) The Department of Telecom­munications (DoT) on Tuesday announced slashing the performance and financial bank guarantee requirements of telecom operators by 80 per cent. According to a licence amendment note, telecom operators will be required to provide a performance bank guarantee of up to Rs 44 crore for each service for the telecom licence compared to Rs 220 crore mandated under the old rule.

Similarly, telecom operators will need to provide a financial bank guarantee of a maximum Rs 8.8 crore per circle now, against the previous requirement of Rs 44 crore. The move will benefit companies as their cash requirement would come down. It will unblock the cash of telecom operators that they keep with banks to furnish bank guarantees.

 

5) Feeling the effects of economic disruption from the second wave of the Covid-19 pandemic, delinquencies – 30-day plus dues – for affordable housing finance companies (AHFCs) shot up to 7.2 per cent in June, from 5.1 per cent in March.

Rating agency ICRA said the asset quality had already deteriorated in the aftermath of the first wave of the pandemic in 2020. The collections for these housing finance companies (HFCs) were impacted due to stricter lockdowns across various states in the first quarter (Q1) of 2021-22 (FY22). Also, unlike the moratorium and restrictions on the bucket movement available in Q1 of 2020-21 (FY21), there were no such dispensations this time round. The 30-day plus dues were at 3.2 per cent in March 2020.

 

 

Stocks in the news today:

Nazara Technologies: Rakesh Jhunjhunwala-backed online gaming company Nazara Technologies has raised ₹315 crore through a preferential allotment of equity shares to two institutional investors, the company said in an exchange filing.

Srei: Kolkata-based Srei Group’s promoters, Adisri commercial Pvt. Ltd, have moved Bombay high court against Reserve Bank of India’s (RBI’s) action on Srei Infrastructure Finance Ltd (SIFL) and Srei Equipment Finance Ltd (SEFL). Srei Group promoters have sought stay on any insolvency proceedings against the two companies.

IDBI Bank: IDBI, on account of its foundation week, is introducing its retail asset products this festive season. The products would include auto loans, education loans, and home loans with augmented features.

Reliance: Reliance Jio saw an outage on Wednesday that affected users Madhya Pradesh and Chhattisgarh. The company later announced a “two-day complimentary unlimited plan” that will automatically get applied to the ongoing plans of affected users.

Tata Steel: Tata Steel saw a muted September quarter (Q2FY22) in terms of overall volume deliveries and crude steel production, the company said in a filing on Wednesday. Tata Steel Europe clocked a steel production of 2.56 million tonnes as compared to 2.67 million tonnes in the last quarter, a decline of 4%.

Tata Power: The company signed a three-year commercial agreement with BluWave-ai, the world’s first renewable energy artificial intelligence (AI) company. This agreement comes at the conclusion of a successful trial project during which Tata Power evaluated the performance of the BluWave-ai cloud platform to generate intra-day and day-ahead dispatches for use in its power scheduling operations.

Titan Company: The company reported strong recovery in demand in Q2FY22. Jewellery business grew by 78% in Q2FY22 YoY and added 13 stores during the quarter, watches & wearables segment registered 73% YoY growth and eye wear business increased by 74 percent YoY in the same period.

NIIT: US-based Sutherland, a leading global digital transformation company, and StackRoute, an NIIT Venture, have entered into a partnership to launch an immersive training program designed to identify the right talent and develop them as high-quality full stack IT professionals, handling critical roles at Sutherland.

Sobha: New sales grew by 50.6 percent to 13.48 lakh square feet in Q2FY22 against 8.9 lakh square feet in Q2FY21. Total sales value increased 50.9% to Rs 1,030.2 crore from Rs 689.9 crore in the same period. The company achieved best-ever quarterly sales volume of 13.5 lakh square feet of super built-up area and average cost of borrowing has further come down during the quarter.[/vc_column_text][vc_separator][vc_column_text]

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