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Market Ahead with EZWealth – 11 Oct 2021
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The Sensex soared past the 60,000 level while the NIFTY finished at an all-time high on Friday after the RBI kept the key interest rates unchanged but maintained its accommodative stance to bolster economic recovery. Market heavyweight Reliance industries led the gains, while IT stocks too saw heavy buying ahead of TCS’s results. On a weekly basis, the Sensex, rallied 1,293 points or 2.2% and NIFTY soared 363 points or 2.07%
Maximum Call open interest was seen at 18000 strike. Maximum Put open interest was seen at 17000 strike
Foreign institutional investors (FIIs) net sold shares worth Rs 64.01 crore, while domestic institutional investors (DIIs) net sold shares worth Rs 168.19 crore on October 8
1) India’s flag-carrier Air India is all set to return to the hands of Tata Group, which founded it close to 90 years ago, latest by the end of 2021. The diversified conglomerate won the rather sedate race for full ownership of the state-owned airline that has long guzzled taxpayers’ money by offering Rs 8,000 crore as enterprise value (EV) consideration. Tatas bested the Rs 5,100-crore bid by a consortium led by SpiceJet promoter Ajay Singh and the reserve price of Rs 12,906 crore set by the government to be the winning bidder, Tuhin Kanta Pandey, secretary, department of investment and public asset management, said.
While the government as the carrier’s owner will get Rs 2,700 crore or 15% of the bid amount in cash, the balance will go towards clearing the airline’s part debt. Air India had a heavy debt of Rs 61,562 crore as on August 31; the government had assumed the carrier’s Rs 22,064-crore debt in FY20, in an effort to make its sale feasible. It will take over another Rs 46,262-crore debt as part of the deal with Tatas.
2) The Reserve Bank of India (RBI) on Friday kept its policy rates and stance unchanged, but decisively moved to withdraw excess liquidity from the system through its least disruptive liquidity management tool. The six-member monetary policy committee (MPC), headed by RBI Governor Shaktikanta Das, voted unanimously to keep the repo rate at 4 per cent and the reverse repo rate at 3.35 per cent.
The stance would remain ‘accommodative’ for “as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of Covid-19 on the economy”, the central bank said. Five of the six MPC members favoured the stance, with external member Jayanth R Varma voting against it once again.
the central bank said it would no longer commit to buying secondary market bonds under its government securities acquisition programme (G-SAP), through which it has injected Rs 2.2 trillion of liquidity in the system (out of the total Rs 2.37 trillion injected through bonds), and would absorb a higher quantum of liquidity gradually through its 14-day variable rate reverse repo (VRRR) auctions.
3) Automobile retailers are staring at huge losses this festive season as manufacturers struggle with vehicle dispatches to dealerships amid the ongoing semiconductor shortage crisis, according to a top FADA official. With chip shortage continuing unabated, auto manufacturers are faced with production issues forcing them to curtail supplies to dealer partners.
With the 42-day long peak season having commenced with the first navratra, dealers are finding it difficult to convince the customers to wait indefinitely for the vehicles of their choice. Amid robust demand for several models, dealers are witnessing booking cancellations and there is also a drop in on the spot buying due to dearth of inventory at their end.
“Festive season is the most important period in terms of sales for us. On an average, the two month period accounts for 40 per cent of our total sales during a year. This is the time when we actually earn and save for operations for the rest of the year. This year we are not getting adequate vehicles and are staring at losses,” FADA President Vinkesh Gulati told PTI.
4) The Centre on Sunday imposed stock limits on traders of edible oils and oilseeds, barring importers and exporters, till March 31, in a bid to check rising domestic prices and give relief to consumers. Edible oil prices in the domestic retail markets have shot up sharply by up to 46.15 per cent in the last one year due to global factors and local tight supply situation, as per government data.
“The centre’s decision will soften the prices of edible oils in the domestic market, thereby bringing great relief to consumers across the country,” the Food and Consumer Affairs Ministry said in a statement.
However, certain importers and exporters have been exempted from the stock limit. The exemption is given to those exporters (being a refiner, miller, extractor, wholesaler or retailer or dealer) who have an Importer-Exporter Code Number issued by the Director General of Foreign Trade (DGFT) and are able to demonstrate that the whole or part of his stock are meant for exports and to the extent of the stock meant for export.
5) Inflows into the mutual fund industry through the systematic investment plan (SIP) route crossed Rs 10,000 crore for the first time in September. Investors opened over 2.6 million new SIP accounts during the month. The assets under management (AUM) of SIPs rose to Rs 5.44 trillion from Rs 5.26 trillion at the end of August.
Strong SIP flows helped equity-oriented schemes log net inflows for the seventh consecutive month. In September, net equity inflows stood at Rs 8,677 crore, data released by industry Association of Mutual Funds in India (Amfi) on Friday showed.
Stocks in the news today:
HFCL, Delta Corp, Saregama India, Ramkrishna Forgings, Tata Metaliks, Tinplate Company of India, Krsnna Diagnostics, Lesha Industries and Sri Lakshmi Saraswathi Textiles are among the companies that will announce their September quarter results today.
Aditya Birla Sun Life AMC: The mutual fund player will make its Dalal Street debut on Monday. It will be the fourth player from the industry to be listed on the bourses. The Rs 2,768.26 crore IPO open for subscription between September 29 to October 1.
Reliance Industries: Billionaire Mukesh Ambani’s RIL announced acquisition of Norway-based solar panel manufacturer REC Solar Holdings for USD 771 million as the oil-to-retail conglomerate made its first move towards creating a multi-billion-dollar clean energy portfolio to become net carbon zero by 2035.
Tata Consultancy Services (TCS), the country’s largest IT firm, on Friday reported a consolidated net profit of Rs 9,624 crore during the July-September quarter, up 6.8% from the preceding quarter. The number was a tad below Street expectations.
Though the profit was driven by broad-based demand across all verticals, it was also aided by other income which grew by 54.1% on a quarter-on-quarter (q-o-q) basis.
Consolidated revenue during the period at Rs 46,867 crore was up 3.2% q-o-q, slightly below estimates. The company reported a margin expansion of 10 basis points at 25.60 against 25.52 bps in the preceding quarter.
Vakrangee: To maximize shareholder value, Vakrangee announced the demerger of both the businesses (Vakrangee Kendra Business as well as E-Governance & IT/ITES Business) into a separate entity. Profit in Q2 grew by 100.90% to Rs 26.74 crore and revenue rose by 195.01% to Rs 207.19 crore in Q2FY22 YoY.
NTPC: The state-owned power giant said it has paid the final dividend of Rs 3,054.45 crore for 2020-21. For the financial year 2020-21, NTPC Ltd has paid a final dividend of Rs 3,054.45 crore, being 31.5 per cent of the company’s paid-up equity share capital.
Macrotech Developers: The realty firm has sold properties worth Rs 3,000 crore during April-September on better demand, and looks to double its sales bookings in the second half to reach the Rs 9,000 crore target this fiscal year.
Sterling & Wilson Solar: As part of deleveraging its stretched balance-sheet, the Shapoorji Pallonji Group is divesting its second key asset within a month by selling 40 per cent stake in Sterling & Wilson Solar to Reliance Industries for Rs 1,100 crore through a multi-stage transaction.
Ultratech Cement: The cement player has emerged as preferred bidder for a limestone block in Madhya Pradesh. Ramstahn Ghunchihai limestone mine, which has reserves of 209.77 million tonnes, was auctioned in the current fiscal.
Adani Total Gas: The company has signed a definitive Agreement for collaborating on the establishment of a bio-conversion plant with a design capacity of about three hundred and fifty (350) tonnes per day of feed processing.
Tata Power: Coal shortage crisis seems to be deepening as a Tata Power arm, Tata Power Delhi Distribution Ltd (DDL), operating in Delhi has sent phone messages to its customers to use electricity judiciously in the afternoon referring to the ongoing issue
Route Mobile: Subsidiary Route Mobile (UK) has entered into a Stock Purchase Agreement with the existing shareholders of Masivian S.A.S., Colombia, South America to acquire 100% shareholding in Masivian.
Gland Pharma: The drug firm said it has received a tentative nod from the US health regulator for generic Sugammadex injection, which is indicated for reversing the effects of the muscle relaxants rocuronium bromide and vecuronium bromide given to patients during surgery.
Bank of Maharashtra: The state-owned lender said it has launched a digital lending platform for its home and car loan customers. The platform will enable prospective retail loan seekers to get loans digitally through a paperless process at the convenience of their place and time of choice.
GMR Infra: The Group is investing Rs 6,300 crore on Rajiv Gandhi International Airport here to expand the aerodrome capacity to 34 million passengers per annum by 2024.
Lincoln Pharmaceuticals: The drug major said Gujarat-based manufacturing facility has received approval from Australia’s medicines and medical devices regulator. The certification will be valid till June 2023.
GOCL Corporation: Subsidiary IDL Explosives has bagged order from Coal India, for supply of bulk explosives, to be supplied over a period of 2 years.
Drug firm Zydus Cadila on Friday said it has received tentative nod from the US health regulator to market generic Adapalene and Benzoyl Peroxide gel used for treatment of acne in the American market.
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