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Market Today with EZWealth – 5 Oct 2021
[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]Indian equity benchmarks Sensex and Nifty50 suffered minor losses in early trade on Tuesday after a mixed opening tracking weakness across global markets. Weakness in financial, IT and pharma stocks pulled the market lower, though gains in oil & gas and select auto counters limited the downside. Broader indices fared better than the overall market, with the small-cap gauge rising about half a percent in early deals.
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The 62% increase in natural gas prices by the government will boost profitability of Indian upstream companies and support their investment spending, says Fitch Ratings. The price for gas from fields that were assigned by the state to oil companies, mainly state-owned Oil and Natural Gas Corporation Limited (ONGC) and Oil India Limited’s (OIL), increased to $2.90 per million British thermal units (mmBtu) for October 2021-March 2022 from $1.79 per mmBtu in April 2021-September 2021. The government also increased the price ceiling for gas produced from deepwater and other difficult fields to $6.13 per mmBtu from $3.62 per mmBtu. Reliance Industries Ltd’s gas production from KG basin will benefit from the higher price ceiling, but the impact on RIL’s financial profile is minimal as gas makes a limited contribution to its revenue. Higher gas prices will increase the input cost for key end-consumer sectors, to the extent the price hike is passed on. Domestically produced gas is supplied on a priority basis to certain sectors, with 30% of it consumed by power producers, around 27% by the fertilizer sector and 19% by city gas distributors in FY21.
Rows of residential towers, some 26 stories high, stand unfinished in Lu’un, China, about 350 miles west of Shanghai, their plastic tarps flapping in the wind. Elsewhere in Lu’an, golden Pegasus statues guard an uncompleted $9 billion theme park that was supposed to be bigger than Disneyland. A planned $4 billion electric-vehicle plant, central to local leaders’ economic dreams, remains a steel frame with overgrown vegetation spilling into the road. The structures are monuments to the once-grand ambitions of China Evergrande Group, now among the world’s most indebted property companies, and a case study in how China’s dependence on real estate as an economic engine helped feed those ambitions. The company’s troubles are among the impacts unfolding since Beijing, concerned about risks to the financial system, last year began forcing developers to start cleaning up their balance sheets. Global investors are worried the crackdown could trigger financial-market distress or a protracted real-estate downturn. People who bought units in unfinished towers are wondering where their money went.
OPEC and a Russia-led group of oil producers agreed to continue increasing production in measured steps, delegates said Monday, deciding against opening the taps more widely, and driving U.S. crude prices to their highest levels since 2014. West Texas Intermediate, the main U.S. oil price, rose 2.3% to close at $77.62 a barrel. Brent, the international gauge, added 2.5% to end at $81.26, its highest settling price in three years. Climbing oil prices recently had analysts and economists expecting OPEC and its Russia-led allies to lift production more significantly. Instead, the Organization of the Petroleum Exporting Countries and Russia said the group, which calls itself OPEC+, would lift its collective output by 400,000 barrels a day in monthly installments, part of a previously agreed plan to return output to pre-Covid-19 levels.
Retail loans of private sector lender HDFC Bank grew around 13 percent in Q2FY22, when compared with September 30, 2020. Retail loans rose 5.5 percent from June 30, 2021, the bank said in a BSE filing. HDFC Bank said its advances aggregated to approximately Rs 11.98 lakh crore as of September 30, 2021, a growth of around 15.4 percent year-on-year and increase of around 4.4 percent on a sequential basis. The lender’s deposits stood at Rs 14.06 lakh crore at the end of Q2FY22, a growth of around 14.4 percent over Rs 12.29 lakh crore on September 30, 2020. The bank’s CASA deposits aggregated to approximately Rs 6.58 lakh crore as of September 30, 2021, a growth of around 28.6 percent year-on-year.
Coal demand is continuing to “far outstrip supplies” despite its ramping up supplies by nearly 12 per cent on a year-on-year basis to thermal plants feels Coal India Ltd (CIL). The state-owned miner is, however, hopeful that the near 10 per cent growth in production and total offtake during the second quarter of this fiscal should help stabilise coal stocks at power plants. However, the critically low stocks at a number of plants threatens to put the country’s power output at risk. The drop in coal stocks at power plants is primarily due to a sudden spike in electricity demand on the back of a revival in the economy, and heavy rains in August-September also impacted production and dispatch of coal. This apart, the surge in imported coal prices led to an increased dependence on domestic coal, said industry sources.
The Reserve Bank on October 4 gave license to the Rs 6,000 crore National Asset Reconstruction Company Ltd (NARCL), a move that will help kickstart operations of the bad bank. SBI, Union Bank of India, Indian Bank picked up 13.27 percent stake each in the NARCL, while Punjab National Bank acquired about 12 percent stake. Banks have identified around 22 bad loans worth Rs 90,000 crore to be transferred to NARCL in the initial phase.
India logged 18,346 new coronavirus infections, the lowest in 209 days, taking the total tally of COVID-19 cases to 3,38,53,048, while the active cases declined to 2,52,902, the lowest in 201 days, according to the Union Health Ministry data updated on Tuesday. The death toll climbed to 4,49,260 with 263 fresh fatalities, according to the data updated at 8 am. The daily rise in new coronavirus infections have remained below 30,000 for 11 straight days.
Every bus to be inducted in the fleet of the Brihanmumbai Electric Supply and Transport (BEST) will be an electric one, Maharashtra environment minister Aaditya Thackeray said on Monday and added the entire fleet of the BEST will comprise electric buses by 2028. Thackeray, who is also the guardian minister of Mumbai suburban district, said double-decker buses operated by the BEST will run on either electrical energy or hydrogen fuel cells, whichever is more capable.
India’s service activity slowed in September and business confidence weakened though employment rose for first time in ten months, a private survey showed on Tuesday. The seasonally adjusted India Services Business Activity Index posted 55.2 in September, falling from August’s 18-month high of 56.7.
Amid reports of higher fuel, material, retail and transportation prices, average cost burdens faced by Indian service providers rose further in September. The overall rate of inflation softened to an eight-month low. Anecdotal evidence suggested that optimism was curbed by worries regarding inflationary pressures, according to the report.
Stocks in the news:
Rail Vikas Nigam: The company has entered into an Memorandum of Understanding with Tata Steel in connection with implementation of infrastructure projects either on nomination basis as a deposit work or through the special purpose vehicle (SPV) route subject to bankability of the SPV project, execution of definitive agreement and management approval.
Gufic Biosciences: The company has approved the proposal for increasing capital expenditure to the tune of Rs 200 crore out of which around Rs 180 crore is proposed to be utilized for setting up of the new manufacturing unit and balance Rs 20 crore for setting up the research & development facility, both in Indore, Madhya Pradesh.
Action Construction Equipment: ICRA has revised the outlook to positive from stable for long term rating.
JSW Energy: The company has signed a contract with Senvion India, a leading manufacturer of wind turbines, for procurement of 591 MW of onshore wind turbines for the company’s under-construction pipeline of renewable energy projects.
HFCL share price was locked in 5 percent upper circuit in the morning trade on October 5 after the telecom equipment maker company bagged a Rs 287.96 crore from RailTel Corporation of India to set up a communication network for defence forces. The secured optical packet switched network shall enhance the security of applications and provide state-of-the-art technology, which will drive the security requirement of defense forces, a release said.
PNB Metlife: MetLife International Holdings, LLC has entered into a share purchase agreement with IGE (India) Private Limited and Elpro International Limited (BSE: 504000; “Elpro”) to acquire their total combined shareholding of 15.27 per cent in PNB MetLife India Insurance Company Limited. The transaction is subject to all necessary regulatory approvals. The Dabriwala family, through their companies, IGE and Elpro, is one of the initial investors in PNB MetLife. Upon completion of the transaction, MetLife’s stake in PNB MetLife will increase to 47.325 per cent.
Shares of Max Healthcare Institute gained almost 1% in early trading on Tuesday as the company said it plans to invest Rs 1,600 crores to ramp up capacity in the National Capital Region.
Shares of ICICI Lombard General Insurance declined nearly 1% in early trading on Tuesday after French insurance firm Axa SA said that it plans to sell around 175 crore equity shares through a block deal.
Bharti Airtel share price is in focus as the company’s Rs 21,000-crore rights issue opens today. The closing date of the issue is October 21, 2021. The issue size has been fixed as “up to 392,287,662 Rights Equity shares. The rights entitlement ratio entails one equity share for every 14 equity shares held by eligible shareholders as on the record date. Bharti Airtel was trading at Rs 688.90, up Rs 7.80, or 1.15 percent.[/vc_column_text][vc_separator][vc_column_text]
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