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After Air India deal, Rolls Royce open to MRO facility in India

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As Air India prepares to induct its first wide-body plane, to be powered by Rolls-Royce engines, the British company would be open to considering an MRO (maintenance, repair and overhaul) centreinthecountry.

Speaking to FE, Kishore Jayaraman, president – India and South Asia, Rolls-Royce India, said, the company was open to the idea of MRO, but added it was a question of volume and scale. “These are very expensive propositions and it is not like you put up an MRO in every country,” he said.

In February, Rolls-Royce announced an order from Air India for 68 Trent XWB-97 engines, plus options for 20 more, powering the Airbus A350-1000. The Tata-controlled airline also ordered 12 Trent XWB-84 engines, the sole engine option for the Airbus A350-900.

“The 100-engine order is sizable. It is just the beginning. We believe the India wide-body market has a lot of headroom to grow,” Jayaraman said. This is the first time that an Indian airline has ordered the Trent XWB and the deal will make Air India the largest operator of the Trent XWB-97 in the world. Air India has placed orders for 34 A350-1000 and 6 A350-900 wide-body jets with Airbus. This will be the first time that an A350 commercial jet will be operated by an Indian airline.

“We are working closely with Air India to fully support the arrival of their new A350-900 aircraft. We will of course support the airline on ground in Delhi, providing engine monitoring support,” Jayaraman said.

While Airbus was earlier tipped to deliver six A350s to Air India by December, only the first one is set to join the carrier’s fleet by then, while the rest will follow in early 2024.

“Engines need to undergo rigorous maintenance procedures. As engine makers, we have to have a very solid relationship with Air India as we go forward,” Jayaraman said.

Typically, an aircraft engine needs to have maintenance over its lifecycle, which is 20 years. Rolls-Royce’s Bengaluru engineering centre played a vital role in designing the XWB engines. Rolls Royce has 2,500 engineers in India which is a five-fold growth in 10 years. It works on civil and defence aerospaceprojects.

Sensex crashes 2% as bears run riot, 17450 in Nifty would be key level; check support, resistance levels

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BSE Sensex and NSE Nifty 50 tanked 2 per cent on Friday as bears prowled Dalal Street. BSE Sensex tanked 1.8 per cent or 1,093 to 58,841, while NSE Nifty 50 tanked 346 points or 2 per cent to finish trade at 17530. Index heavyweights such as Reliance Industries, Infosys, HDFC Bank, Housing Development Finance Corporation, Tata Consultancy Services (TCS), and ICICI Bank among others, contributed the most to the indices fall. Broader markets plunged more than 2 per cent on Friday. S&P BSE MidCap index crashed 3 per cent or 749 points to end at 25,558, while S&P BSE SmallCap index fell 2.4 per cent or 712 points to settle at 29,199. India VIX, the volatility index, jumped 8 per cent to finish at 19.82 level.

Also read: Warning signs flashing for global recession in 2023, as interest rate hikes threaten economic growth

Indian markets were the worst performers in the Asian pack, as higher inflation and likely aggressive rate hikes by the US Fed sent stocks tumbling across the board. We are likely to see strong bouts of volatility in the coming sessions as global slowdown looms large. Technically, the double top formation on daily and intraday charts and bearish candle on weekly charts is indicating further weakness from the current levels. If the index trades above 17450 (which is double bottom support level), then the market is likely to bounce back sharply. For the short term traders, 17450 would be the key level to watch out for, above which, the index could bounce back to the 20 day SMA (Simple Moving Average) 17700 and 17900 levels. On the flip side, below 17450, the index could hit 17300-17200 levels

Deepak Jasani, Head of Retail Research, HDFC Securities

Global stock markets followed Wall Street lower on Friday after higher-than-expected U.S. inflation dashed hopes the Federal Reserve might ease off more interest rate hikes, amid growing concerns of a global recession following warnings from the World Bank and the International Monetary Fund. Nifty ended the week down by 1.59%. Markets seem to have started the downward move after forming a triple top on daily charts over the last three days. On weekly charts, Nifty has formed a bearish Dark Cloud Cover. 17401 and 17170 are the next levels on the downside that may provide temporary support. On up moves, 17771 may be difficult to breach in the near term.

Also read: Gautam Adani becomes world’s 2nd richest person, beats France’s Bernard Arnault as group stocks rally

S Ranganathan, Head of Research, LKP Securities

Indian Markets today finally chose to mirror global cues after out-performing global peers in the recent past. Weaker domestic flows for last month despite SIPs maintaining their run rate led to profit taking as all sectoral indices ended in the red. As global investors brace for a further interest rate hike post the US inflation data released recently, the RBI too has its task cut out in India when they meet at the end of this month. Spectacular Monsoon in India coupled with several positive Tailwinds provides a plethora of investment opportunities in the broader markets.

Vinod Nair, Head of Research, Geojit Financial Services

With persistent bearish pressure from global stocks amid rising yields and dollar index, the domestic market surrendered to the global trend despite its strong decoupling scenario and encouraging macroeconomic data. Post the release of US inflation data, which showcased a MoM increase in inflation, the global market has been pricing in the likelihood of a more aggressive policy response from the Fed.

Buy RIL, ITC stocks ahead of Union Budget 2021, charts tell; watch these key support levels for Nifty

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By Shrikant Chouhan

Last week had been volatile for the traders, the benchmark Index Sensex first time hit the 50000 mark and also registered a fresh all time high of 50184.01/ Nifty 14753.55. But due to short term overbought conditions and profit booking near the psychological 50000 mark, the index failed to sustain at a higher level. Among sectors, the Nifty Auto index gained 3.42 per cent and strong buying was seen in Bajaj-Auto and Tata Motors, which rallied over 10 per cent. Whereas, Nifty Metal, PSU Banks, and Nifty Pharma indices shed over 3.5 per cent.

Bar Reversal kind of candle and daily charts formation indicates red flag near 14750/50185 level. Hence a strong possibility of quick short term price correction if prices move to 14600 levels.

For the next few trading sessions, 14300/48400 should be the sacrosanct level for the trend following traders, if it sustain above the same then uptrend texture likely to continue up to 14600-14750/48800-49100 further upside may also possible that could life the index till 14855/49450. On the flip side, dismissal of 14300/48400 possibly open another leg of correction till 14100-13950/48100-47600.

Reliance Industries Ltd: Buy

The stock has made a strong comeback in the previous week and closed above the multi resistance area of 2040. It has also taken an exit from the bearish triangle at an upside that would lift the stock to 2150/2200 in the near term. Buy at current levels 2045, Stop Loss at 2000 and Target at 2200.:

ITC: BUY

Since the stock has broken the level of 210 it is trending upward. Currently it is consolidating between the range of 225 and 205. In the previous week we saw the stock is correcting to 209, which is the lower boundary of the consolidation and is giving better risk reward. Our advice is to buy at current levels with a final stop loss at 205. On the higher, it could bounce back to 220/225 levels.

Shriram Transport Finance Company: SELL

It has formed lower high formation at 1276 as compared to earlier highest level, which was at 1317. On a daily and weekly basis, it closed below the level of 1164, which is negative for it. Our advice is to sell at resistance 1175/1180 with a final stop loss at 1210. Below the level of 1164, the stock may even fall to 1100 or 1080 levels.

(Shrikant Chouhan is Executive Vice President – Equity Technical Research at Kotak Securities. The views expressed are personal. Please consult your financial advisor before investing)

Nifty may hit 15,700, Sensex seen at 52,000 in 2021; Sanjiv Bhasin tells top stocks to buy | IIFL INTERVIEW

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Indian share markets are ruling at record high levels on the back of newsflow related to COVID-19 vaccine rollout. Sanjiv Bhasin, Director at IIFL Securities Ltd, said that investors must stay invested as BSE Sensex and Nifty 50 have been hitting record levels almost every other day. In an interview with Surbhi Jain of Financial Express Online, Sanjiv Bhasin said that he is overweight on cement, pharmaceuticals and construction sectors stocks. He maintains a bullish view on the stock market, and expects Sensex to hit 52,000 in this new year. While trading in an all-time high market, Bhasin advises investors to keep systematic investment plans (SIP) as corrections can’t be ruled out.

1. What should be the investment strategy when markets are at all-time highs?

2. Keeping the current share market scenario, where is Bank Nifty headed in 2021?

Bank Nifty was the big underdog with a global consensus of underperformance as NPA’ would rise. However, in Indian context, large banks raised money at low cost during the peak which is now reflecting in their bottom lines. We expect bank Nifty to scale new highs with a target of 34,000 in 2021.

3. Growth or value investing, which according to you offers higher returns over the long-term?

Both are going in tandem, however, this year may be different as after almost 4 years value is making a huge comeback with select PSUs seeing huge catch up after 4 years. 2021 may belong to value as corporate profitability shows growth with value doing better. However, longer-term growth has out beaten value and may continue.

4. Where do you see BSE Sensex and Nifty 50 next year? What are your overweight and underweight sectors for 2021?

BSE Sensex at 52,000 and Nifty 50 index at 15700. The overweight sectors are cement, pharma and construction, while underweight sectors are metals and cyclicals.

5. Amid ongoing TCS and Wipro share buyback, what should investors do- tender or hold on to shares?

Take advantage of the arbitration opportunity given by the buyback, however, do not lose sight that these have been huge wealth creators in the past and may continue to outperform

6. Which investment option do you prefer- Mutual funds or direct equity?

Both will work in bull markets, however, may see the return of mutual funds as fund flows increase and markets get more broad-based.

7. Which sectors may outperform in 2021 and what are you preferred stocks?

Sectors that may outperform in the new year are pharmaceuticals, cement and construction. The top stock picks are ACC (Rs 2000), Ambuja Cements (Rs 315), Godrej Properties (Rs 1700), NBCC (Rs 50) and Sun Pharma (Rs 750).

Corning-Optiemus JV to seek incentives for cover glass

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Bharat Innovation Glass Technologies, a joint venture (JV) of US-based gorilla glass maker Corning and local contract manufacturer Optiemus Infracom, will soon apply for incentives under the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS)to make finished cover glass for smartphones in the country.

The JV company is expected to start the production of smartphone cover glass in the October-December quarter of 2024. In the first phase, Bharat Innovation Glass willmake30million pieces of high-quality finished cover glassand will employ between 500 and 1,000 people, John Bayne, senior vice president and general manager of mobile consumer electronics at Corning, said in a media interaction on Thursday.

For Corning, this is the first such JV to make cover glass. Currently, the JV will be involved in finishing the cover glass sheets in India. “Over time, once we have the scale, we would consider bringing the original glass sheet manufacturing here as well,” Bayne added.

According to Bayne, it does not make sense to directly start with manufacturing of cover glass because that will lead to higher costs initially in the absence of a local manufacturing ecosystem in the country. Once there is a scale and development of the local component ecosystem, it would make sense for Corning to bring in the technology for glass manufacturing.

Optiemus and Corning announced the joint venture last month. As part of the arrangement, Optiemus will hold a 70% stake, whereas Corning will hold 30%. The companies did not disclose the investment in the facility. However, it is learnt that the companies will put in close to `934 crore. Further, the companies are yet to decide on the location of the facility and are in talks with Tamil Nadu and Telangana to occupy the land and start operations.

Even if the JV will start making cover glass locally, the same may not lead to reduction in prices of smartphones for the end consumer, according to Bayne.

“Having a local supply chain is probably a good thing and avoids a lot of logistics and shipping costs. This makes it more economical for the OEMs (original equipment makers) who are assembling their phones here,” Bayne said.

Once the company starts operations, the facility will make entry- and premium-level 2D, 2.5D and 3D glasses for the smartphone OEMs. Corning will transfer its technology to the joint venture to start the cover glass finishing operations in the country.

GAIL, Bombay Dyeing, HDFC, Avenue Supermarts, Nykaa, Vedanta, Dilip Buildcon stocks in focus

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Indian benchmark indices BSE Sensex and NSE Nifty 50 are likely to open higher amid positive global cues. Ahead of the session, SGX Nifty was up in green, hinting at a positive start for domestic equity markets. “The pressure in the global indices, especially the US, is weighing on the sentiment and we feel the scenario would continue in absence of any major domestic trigger. A decisive breakdown below 16800 in Nifty could intensify the selling. Participants should stay light and prefer defensive viz. pharma and FMCG over others for long trades,” said Ajit Mishra, VP – Research, Religare Broking.

Stocks in focus on 4 October, Tuesday

Also Read: Strong credit ratings upgrades for Indian firms; these sectors climb up the most as credit quality improves

Housing Development Finance Corporation: HDFC said loans assigned in Q2FY23 stood at Rs 9,145 crore, up from Rs 7,132 crore in same period last year. All the loans assigned during the quarter were to HDFC Bank. Gross income from dividend for Q2 came in at Rs 1,360 crore and the profit on sale of investments was nil for the quarter.

Bombay Dyeing: The rights issue committee of Bombay Dyeing & Manufacturing Company has considered and approved the draft letter of offer for the proposed Rs 940 crore, the company said in a BSE filing. On September 22, the company’s board had approved raising of funds through a rights issue of upto Rs 940 crore. The draft letter of offer dated October 3, 2022 will be filed with the Securities and Exchange Board of India (Sebi), BSE and NSE.

Vedanta: The company said its alumina production at Lanjigarh refinery decreased by 11% on-year to 4.54 lakh tonnes due to scheduled maintenance, and at Zinc India, reported highest-ever second quarter mined metal production at 2.55 lakh tonnes, up 3 percent on-year, driven by better grades and improved mill recoveries. In the steel segment, its total saleable production increased by 11% on-year to 3.25 lakh tonnes on account of completion of debottlenecking activities in Q1FY23.

Nykaa: Nykaa’s board has approved issuance of bonus to its shareholders in proportion of 5:1, which means that for every one fully paid-up equity share held, a shareholder will get five fully paid-up shares of the company. The company has fixed November 3 as the record date to determine members eligible for bonus equity shares. The company, founded by Falguni Nayar, was listed on the exchanges on November 10 last year.

Avenue Supermarts: The D-Mart operator announced standalone revenue for the quarter ended September 2022 at Rs 10,384.66 crore, up significantly by 36% from Rs 7,649.64 crore in the same period last year. The total number of stores as of September 2022 stood at 302.

Also Read: Paytm share price rises 7% in 6 months, may rally this much more; JP Morgan bullish, should you buy?

Dilip Buildcon: The road construction company through its joint venture RBL-DBL has received a letter of acceptance (LOA) for its Surat Metro Rail Project in Gujarat. The order is worth Rs 1,061 crore.

Petrol, Diesel Price Today, 23 Sep 2022: Fuel cost static; check rates in Delhi, Mumbai, Noida, other cities

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Petrol and Diesel Rate Today in Delhi, Bangalore, Chennai, Mumbai, Lucknow: The price of petrol and diesel has been kept steady on 23 September 2022 (Friday), keeping costs steady for more than three months now. Petrol rate and diesel rate in Delhi are at Rs 96.72 and Rs 89.62 a litre, respectively. In Mumbai, petrol is retailing at Rs 106.31 per litre and diesel at Rs 94.27 per litre. The last country-wide change in price came on 21 May 2022, when Finance Minister Nirmala Sitharaman announced a cut in excise duty on petrol by Rs 8 per litre and Rs 6 per litre on diesel. Since then, Maharashtra is the only state to have cut rates. The Maharashtra government had announced a cut in value-added tax (VAT) on petrol by Rs 5 a litre and by Rs 3 a litre for diesel in July.

Also read: Reliance New Energy to acquire 20% stake in solar tech company Caelux Corp to produce low cost solar modules

Also read: Rupee likely to depreciate on strong dollar, risk aversion in markets, weak Asian peers; USDINR may hit 81

Petrol, diesel prices in Chennai, Kolkata, Bengaluru, Lucknow, Noida, Gurugram

Mumbai: Petrol price: Rs 106.31 per litre, Diesel price: 94.27 per litre

Delhi: Petrol price: Rs 96.72 per litre, Diesel price: Rs 89.62 per litre

Chennai: Petrol price: Rs 102.63 per litre, Diesel price: Rs 94.24 per litre

Kolkata: Petrol price: Rs 106.03 per litre, Diesel price: Rs 92.76 per litre

Bengaluru: Petrol: Rs 101.94 per litre, Diesel: Rs 87.89 per litre

Lucknow: Petrol: Rs 96.57 per litre, Diesel: Rs 89.76 per litre

Noida: Petrol: Rs 96.79 per litre, Diesel: Rs 89.96 per litre

Gurugram: Petrol: Rs 97.18 per litre, Diesel: Rs 90.05 per litre

Chandigarh: Petrol: Rs 96.20 per litre, Diesel: Rs 84.26 per litre

Public sector OMCs including Bharat Petroleum Corporation Ltd (BPCL), Indian Oil Corporation Ltd (IOCL) and Hindustan Petroleum Corporation Ltd (HPCL) revise the fuel prices daily in line with international benchmark prices and foreign exchange rates. Any changes in petrol and diesel prices are implemented from 6 am every day. Retail petrol and diesel prices differ from state to state because of local taxes like VAT or freight charges.

FPIs infuse Rs 5,600 crore in Indian equities in September so far 

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Foreign investors have pumped in close to Rs 5,600 crore into the domestic equity markets in this month so far on expected growth in consumer spending in festive season and better macro fundamentals compared to other emerging markets.

This comes following a net investment of staggering Rs 51,200 crore in August and nearly Rs 5,000 crore in July, data with depositories showed.

Also Read|Tax appellate tribunal ruling: FPI income not subject to MAT provisions

Between October 2021 and June 2022, they sold a massive Rs 2.46 lakh crore in the India equity markets.

V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said the trend of FPI flows into India is likely to continue. However, if US bond yields continue to rise and the dollar index rises above 110, inflows may be impacted.

“I feel FPIs will continue buying Indian equities irrespective of the US Fed outcome,” Jay Prakash Gupta, founder, Dhan, said.

According to data with depositories, FPIs pumped a net amount of Rs 5,593 crore in Indian equities during September 1-9 .

“FPIs are buying in India because India has the best growth and earnings story among large economies in the world. US, Euro zone and China are slowing down. India is the bright spot,” Vijayakumar said.

Shrikant Chouhan, Head – Equity Research (Retail), Kotak Securities, said the Indian markets were buoyed by falling prices and a decline in domestic bond yields.

“With falling crude oil prices, expected growth in consumer spending in coming festive season, better macro fundamentals compared to other emerging markets will definitely provide the tailwind for India,” Gupta said.

In addition, exodus of investments from Russia is finding an alternative in India and funds are looking at diversifying investments away from China are the factors which have prompted resumption of FPI inflows in Indian equities, Hitesh Jain, Lead Analyst – Institutional Equities, Yes Securities, said.

Also Read| Worst over for Dalal Street now as FIIs return, bet on auto sector, private banks | Emkay INTERVIEW

Foreign investors will be eyeing Federal Open Market Committee (FOMC) meeting outcome due on September 21 and Fed is likely to increase interest rates by 75 basis points.

US inflation slowed down from a 40-year high in June to 8.5 per cent in July on lower gasoline prices. In India, the consumer price index-based retail inflation marginally eased to 6.71 per cent in July as against 7.01 per cent recorded in June due to fall of food prices.

Himanshu Srivastava, Associate Director – Manager Research, Morningstar India, said FPIs’ stance and outlook towards India started to change mid-July expecting that global central banks, particularly US Fed, may go slow on rate hikes as the inflation starts to cool off.

Also, Indian equities went through a correction phase making them relatively attractive on valuations.

FPIs used this opportunity to hand-picked high-quality companies and invest in them. They are now buying stocks of financials, healthcare, FMCG and telecom.

According to Yes Securities’ Jain, FPIs are pouring money in domestic facing sectors like banks and consumption stocks which are immune to global shocks, and traction is apparent in terms of India’s credit growth and consumer spending.

In addition, FPIs infused a net amount of Rs 158 crore in the debt market during the month under review.

Apart from India, other emerging markets, including South Korea, Taiwan, Indonesia,Thailand and Philippines, too witnessed inflows during the period under review.

Sensex, Nifty surge 12% YTD in 2020, follow Wall Street gains; will it repeat 2020 rally next year?

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By Prem Prakash

The calendar year 2020 has been one of the most volatile years for stock markets and one which market participants are going to remember for a long-long time. It was a year which was full of surprises and would be remembered for a lot of things including the pace with which the pandemic accelerated, the scale of the lockdowns, the government stimulus initiatives, and the magnitude of stock market rebounds.

With respect to the economic activities and GDP growth, India’s GDP contracted by around 24% in the first quarter which was one of the worst among all the major economies across the globe. However, it was also because, to control the spread of COVID-19, India had imposed one of the strictest lockdowns across the world. Also, GDP numbers for Q2 surprised everyone and albeit negative, it was way better than what most of the people estimated. In Q2, India’s GDP contracted by 7.5% and now the expectation is that India’s GDP growth would turn positive in Q3 itself.

India has officially entered recession (as two successive quarters of GDP contraction is termed as a recession) after the declaration of the GDP numbers for the Q2. And as of now, we are in the early stage of the post-recession recovery. This suggests a prolonged period of low-interest-rate growth that favors equities over the bond market. However, we may not witness a similar kind of rally in the stock market as it was in 2020, but the overall trend may continue to be bullish. In the short term, we may face some uncertainty due to the new strains of Corona Virus in the European countries, geopolitical issues in China, Iran, and Russia. Also, the market will keenly observe how the distribution and logistics for the vaccine happens and what is the effectiveness of the vaccine in controlling further spread of COVID-19. All these might lead to a roller coaster ride for the markets in the first half of 2021. However, with the companies posting better results every quarter, we can expect India to post positive GDP numbers in 2021 and markets to respond cheerfully to such performance.

The major event which everyone is looking forward to in 2021 is the announcement of the general budget on 1st February. The government has got a daunting task for the budget with fiscal deficit shooting up to around 7.5% of the GDP.

Considering the recent sharp rally in equity markets, investors should adopt utmost caution while investing. They should do a thorough analysis of their investment objective, time horizon, risk appetite and then plan their investments.

(Prem Prakash is the CEO at CapitalVia Global Research Ltd. – Investment Advisor. The views expressed are the author’s own. Please consult your investment advisor before investing.)

MCX Crude oil October futures to trade in Rs 6400-7300/bbl range this week; OPEC+ meeting eyed

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By Royce Varghese

WTI Crude oil futures fell for the fourth consecutive month in September, down by more than 11% and closed below $80 per bbl, pressured by mounting fears of a demand-sapping global recession. The black gold also witnessed the first quarterly decline in 2 years and down more than 25% in the previous quarter, giving away all the war premium, on fears of demand destruction from aggressive central bank tightening and a surging dollar index.

Also Read: Petrol, Diesel Price Today, 4 October 2022: Fuel prices unchanged; check rates in Delhi, Mumbai, other cities

US shale production is not rising significantly despite a government push to increase the output. Crude output was mostly hovering near 12.1 mbpd in September, however, it fell to 12.1 mbpd in the previous week. Inflation and supply-chain delays play a major role in hampering production and expansion.

Outlook: OPEC+ set to deliver the biggest output cut since the pandemic

Oil prices might have bottomed for now as supply concerns are going to rise in the coming months. OPEC+ alliance is considering slashing production by more than 1 million barrels a day to revive plunging prices when it meets on 5th October. A reduction of that magnitude would be the biggest since the pandemic and might put a floor on oil prices. The OPEC+ gathering in Vienna will be the cartel’s first in-person meeting since the pandemic. In addition, ministers plan to hold a press conference after their session.

US SPR release is also nearing an end in late October, which accounted for almost 1 mbpd of global supply since May. Together, halting SPR release and output cut from OPEC+ might add to more than 2% of global output, which is going to vanish from November onwards. Chinese demand might also increase as few Chinese state oil refineries consider increasing runs by up to 10% in October, on prospects of more robust demand and a possible surge in fourth-quarter fuel exports.

Also Read: Aggressive monetary tightening by RBI continues: Can NBFCs stay resilient?

Having said that, US Labour market data can be closely watched for more cues on Fed’s rate hike path. In case data surprises on the upside, we might see a dollar rally on prospects of aggressive rate hikes from the Fed, which might limit the upside in oil prices. We expect MCX Crude oil October futures to trade in the range of Rs 6,400 – 7,300 per bbl for the week, with an upward bias.

(Royce Varghese, Fundamental Analyst, Currency & Energy, Anand Rathi Shares and Stock Brokers. Views expressed are the author’s own.)