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Market Today with EZWealth – 18 Oct 2021
[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]Domestic stocks kicked off the week on a solid note even as crude prices hit a multi-year high and data showed the Chinese economic growth slowed in September quarter, raising concerns over global economic recovery.
Rising for the seventh straight session, the BSE Sensex was trading 0.92 per cent higher at 61,853 at 12:30 PM. The NSE Nifty50 was trading at 18,513,up 0.9 per cent.
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1) Traders once again are betting that the U.S. oil benchmark will surge above $100 a barrel, from a recent $82, as early as December. U.S. crude, known as West Texas Intermediate or WTI, is up 10% this month, and 70% this year, but it hasn’t hit $100 since the oil crash of 2014. Wagers across the Atlantic are even more aggressive. Some traders are betting Brent crude, the global benchmark, will hit a record high of $200 a barrel by December 2022, according to data from provider QuikStrike. Options give investors the right to buy or sell at a stated price by a certain date. Traders typically use options to make directional bets or to hedge their portfolios.
The bullish trading amounts to a gamble that supply-chain disruptions and regional shortages will keep pushing energy markets higher, despite a slowing global economic expansion and concerns that higher oil and natural-gas prices will crimp consumer spending. The wagers also show that investors drawn by the small upfront investments and potentially quick payoffs of options trades are piling into energy markets, echoing trades in the stock market this year.
2) China’s worsening energy situation has impacted global coal prices and logistics costs and increased raw material costs across sectors. However, the order books of Indian chemical and steel manufacturers would witness growth because of a reduction in supply by Chinese counterparts, according to industry analysts.
“China’s energy crisis and resultant likelihood of shutting down of Chinese companies or intermittent curbs on manufacturing would prove advantageous to Indian companies, as the demand for their products is bound to rise in both the domestic and international markets,” said India Ratings and Research (Ind-Ra), a Fitch Group company.
The domestic end-user industries for chemicals such as dyes and pigments, pharmaceuticals and agrochemicals will pass on the overall increase in costs to consumers, thus maintaining profitability, Ind-Ra said. The rebound in global economic activity with lifting of covid-led restrictions has exposed the shortages of fuels used for power generation in China and other countries. In India, industries are scrambling for coal supplies as Coal India Ltd, the world’s top miner of coal, has temporarily stopped deliveries to all consumers in the country other than power stations.
3) China’s economy weakened in the third quarter, weighed by multiple headwinds from a property slump to an energy crisis. Gross domestic product expanded 4.9% from a year earlier, the National Bureau of Statistics said Monday, down from a previously reported 7.9% in the preceding quarter and compared with a median forecast of 5% in a Bloomberg survey of economists. Beijing’s tighter restrictions on the property market have curbed construction activity and squeezed financing to the sector. Meantime, a worsening debt crisis at China Evergrande Group is now spilling over to other developers and contributing to a slump in land sales. On top of that, electricity shortages in September forced factories to curb output or shut completely, while strict measures to contain sporadic coronavirus outbreaks continued to weigh on consumer spending.
Industrial output rose 3.1% in September from a year earlier, missing the median estimate of 3.8%; retail sales expanded 4.4% in September; fixed-asset investment climbed 7.3% in the first nine months from a year ago, lower than the median forecast of 7.8%. The jobless rate fell to 4.9% at the end of September. GDP rose 0.2% in the third quarter from the previous three months.
4) Volkswagen AG’s Skoda unit will produce 250,000 fewer cars than planned this year due to the global chip shortage, Automobilwoche magazine reported, more than double the number that the company estimated last month. Most working shifts were canceled until the end of the year as Skoda still holds a large number of unfinished cars in stock and will focus on completing those first, the magazine said, citing the head of the company’s workers council. The chip shortage might last until the second half of 2022 before stabilizing again as the latest rise in Covid cases in Asia pressures production, Automobilwoche cited company officials as saying. Skoda Chief Executive Officer Thomas Schaefer said in September that he expects the company to produce 100,000 fewer cars than planned. VW, Daimler AG’s Mercedes and Toyota Motor Corp. are among automakers that have been hit by factory shutdowns in southeast Asia, which in recent years has emerged as a hub for chip testing and packaging.
5) Disruptions to transportation of coffee around the world, caused by container shortages and port congestion, will likely keep coffee prices high for a longer time since they make it more difficult for the market to rebalance supplies geographically. Coffee analysts and traders said on Friday during the annual conference organized by the Swiss Coffee Trade Association (SCTA) that transportation problems are preventing available supplies from moving quickly to meet demand in some areas of the world, boosting prices for the commodity.
Arabica coffee prices in New York were near the highest in seven years this week, as the market deals with the outlook of a reduced supply in top grower Brazil after drought and frosts. The experts said that current high prices will eventually boost production in countries and regions other than Brazil, such as Colombia, Central America and Africa, which will lead to a more balanced supply, but that would take time.
6) The Ministry of Labour and Employment on Sunday said the number registrations has crossed 4-crore mark on e-Shram portal in less than two months of its launch. According to a labour ministry statement, workers in diverse occupations such as construction, apparel manufacturing, fishing, gig and platform work, street vending, domestic work, agriculture and allied, transport sector have registered on the portal. There has been weekly improvement in the registrations by gender, with men and women workers registering at comparable proportions.
As per the data, the states of Odisha, West Bengal, Uttar Pradesh, Bihar and Madhya Pradesh are at the fore front of this initiative with highest number of registrations. This registration would facilitate delivery and accessibility to crucial welfare programmes and various entitlements meant for the workers in the unorganised sector and employment. After registration at e-SHRAM Portal, the unorganised workers shall receive a digital e-SHRAM card and they can update their profiles/ particulars through portal or mobile app.
They will have a Universal Account Number (on eSHRAM Card) that will be acceptable across the country and now they will not be required to register at different places for obtaining social security benefits. If a worker is registered at the e-Shram portal and meets with an accident, he/she will be eligible for Rs 2 lakh on death or permanent disability and Rs one lakh on partial disability.
7) India’s power consumption grew 3.35 percent in the first half of October to 57.22 billion units (BU), showing recovery amid coal shortage at electricity generation plants, according to power ministry data. Last year during October 1-15, power consumption stood at 55.36 BU which was higher than 49.66 BU in the same period in 2019.
The data clearly shows that there is recovery in power consumption as well as demand in the country. Last year during October 1-15, power consumption stood at 55.36 BU which was higher than 49.66 BU in the same period in 2019. Amid the coal shortage at power plants in the country, the peak power shortage moderated to 986 MW on October 15 in sharp contrast to 11,626 MW on October 7. It is to be noted that the 11,626 MW peak power shortage on October 7 was the highest during the first half of this month.
8) India added 13,596 new coronavirus infections taking the total tally of COVID-19 cases to 3,40,81,315, while the active cases declined to 1,89,694, the lowest in 221 days, according to the Union Health Ministry data updated on Monday. The death toll climbed to 4,52,290 with 166 fresh fatalities, according to the data updated at 8 am.
The daily rise in new coronavirus infections has been below 30,000 for 24 straight days and less than 50,000 daily new cases have been reported for 113 consecutive days now. The active cases comprise 0.56 per cent of the total infections, the lowest since March 2020, while the national COVID-19 recovery rate was recorded at 98.12 per cent, the highest since March 2020, the ministry said.
Uttarakhand has administered the first dose of COVID-19 vaccine to its entire eligible population three months ahead of target, Chief Minister Pushkar Singh Dhami said on Sunday. Mumbai on Sunday did not report even a single death due to COVID-19 for the first time nearly since the pandemic broke out in March last year, a top official said
Stocks in the news:
Max group firm Max Ventures and Industries Ltd (MaxVIL) is looking to acquire at least two land parcels, outright or through joint ventures, in Delhi-NCR this fiscal year to expand its office portfolio and enter into the residential segment. MaxVIL MD and CEO Sahil Vachani outlined the plan of the company in real estate to develop at least a million square feet each in both commercial and residential segments from 2025 onwards. He highlighted that the company’s first office building ‘Max Towers’ in Noida, comprising around 6 lakh square feet, has been almost fully leased, while the second office building ‘Max House’ – having 1 lakh square feet leasable area – at Okhla in the national capital would get fully leased hopefully by December.
PNB Housing Finance is staring at a significant derating after the NBFC board decided not to proceed with the proposed preferential issue of Rs 4,000 crore at Rs 390 per share to the Carlyle group, General Atlantic, SSG Group and other investors. A few brokerages have already cut their ratings to ‘sell’ and reduced-price targets significantly owing to uncertainty regarding lack of growth capital, weak balance sheet and elevated NPAs
Shares of Dixon Technologies gained 4% in early trading on Monday, after the electronics manufacturing company said it had started making 5G millimeter waves smartphones.
Paras Defense and Space Technologies share price hit 20 percent upper circuit on October 18 after the company decided to incorporate an associate company for maintenance and servicing of defense equipment. The Board of Directors at its meeting on October 18 approved incorporation of a company in association with Krasny Defense Technologies Limited. The proposed associate company would be engaged in the maintenance, servicing and repairs of defense equipment as well as naval vessels, the company said in an exchange filing.
Hindalco Industries‘ share price jumped more than 5 percent in the morning session on October 18 after Credit Suisse reiterated the “outperform” call on the stock and raised target to Rs 640 from Rs 555 per share, an upside of around 18 percent.
Dr Reddy’s Laboratories’s subsidiary Aurigene Discovery Technologies and Exelixis, Inc announced that Exelixis has exercised its exclusive option under the companies’ July 2019 agreement to in-license XL114 (formerly AUR104), a novel anticancer compound. Exelixis has now assumed responsibility for the future clinical development, commercialization and global manufacturing of XL 114.
Mahindra CIE Automotive reported higher consolidated profit at Rs 166.42 crore in Q2FY22 against Rs 60.76 crore in Q2FY21, revenue jumped to Rs 2,090.7 crore from Rs 1,694.3 crore YoY.[/vc_column_text][vc_separator][vc_column_text]
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