Month: March 2023

MCX Gold prices to consolidate next week, support seen at Rs 48,900; buy on dips as recession fears persist

Posted on by

By Bhavik Patel

It was a volatile market for gold this week as we had seen some very heavy moves in the currency market. Last week GBP was getting rattled after unveiling a mini budget which shot US dollar into the sky and the outcome was a blanket selling of all asset classes. While struggling against the U.S. dollar, the gold market is trading near all-time highs against all three major currencies namely Euro, Yen and Pound. Gold was trading at a 2.5 year low this week after which there was intervention from the Bank of England to keep their currency from collapsing in the way of buying long dated British bonds.  

Gold prices welcomed the BOE’s dramatic intervention that avoided an imminent gilt crash and sent global bond yields sharply lower. This was somewhat expected and serves as a reminder that gold will do just fine once the global bond market selloff is truly over. However gold is not out of the woods as rates markets are pricing the potential for higher interest rates to persist for some time, and a steady stream of Fedspeak is likely to hammer this point home. This means the US dollar will continue to remain stronger creating headwinds for gold prices. US greenback has rallied 7% over the last 12 days, which could signify a technical blow-off top. What we are seeing right now is just that as an overstretched rally needs to cool down.

Also read: RBI Monetary Policy Committee hikes repo rate by 50 bps to 5.9%, cuts FY23 GDP growth forecast to 7%  

Historically, when the U.S. dollar has peaked, gold prices have rallied around 6% in the subsequent two months. It is difficult to say whether the US dollar has peaked or not at the moment but from a structural perspective, technically and given historical context, the US dollar is nearer the top and Gold is getting nearer its floor. Growing stress in currency markets could force the Federal Reserve to take a less aggressive stance at its November meeting.

For the moment, 48900 in MCX is the immediate support as twice the market has bounced from that level. In COMEX, $1600 seems to be support for now and if that breaches, then we may see levels till $1540. On the upside, 50800 and 51500 seems to be the resistance. For next week, we continue to advocate buy on dips as the US dollar rally seems to run out of steam temporarily and with risk aversion and recession fear, we might see safe haven buying. Long position can be held with stoploss of 48900 in MCX. Next week we don’t expect any major moves barring Friday when US non-farm payroll data will be released. After such a volatile week we expect prices to consolidate next week.

(Bhavik Patel is a commodity and currency analyst at Tradebulls Securities. Views expressed are the author’s own.)

Sensex ends in green, Nifty support seen at 17450, may hit 17800 again; Is Nifty on track for a new high?

Posted on by

BSE Sensex and NSE Nifty 50 ended in a positive territory amid volatile trade on Monday, as investors awaited US Federal Reserve’ policy outcome due later this week. BSE Sensex ended 300 points or 0.5 per cent up at 59,141, while NSE Nifty 50 index at 17,622, up 91 points or 0.5 per cent. Index heavyweights such as Housing Development Finance Corporation (HDFC), Bajaj Finance, Hindustan Unilever (HUL), HDFC Bank, Infosys, and State Bank of India (SBI) among others contributed the most to the indices gain. Broader markets underperformed equity frontliners. S&P BSE Midcap index fell 0.2 per cent or 0.4 per cent to settle at 25518, while S&P BSE Smallcap index ended at 29150, down 50 points or 0.2 per cent. India VIX, the volatility index, rose 0.6 per cent to settle at 19.94 levels.

Also read: Harsha Engineers IPO share allotment: Check grey market premium, status via BSE, registrar; listing on 26 Sep

While the undertone of the market remained volatile, a strong relief rally after the recent slump helped benchmark indices to rebound. While European markets and most of the Asian pack continued their downward spiral, the underperformance of the Indian markets last week prompted investors to buy the beaten-down stocks. Despite the recovery, markets may gyrate sharply intra-day amid global uncertainty. Technically, after an early morning fall, the Nifty found support near 17450 (which is double bottom support level) and bounced back sharply and hovered between 17580-17665 levels. If the index trades above 17550 then the pull back formation is likely to continue. Above which, the index could touch the 20 day SMA level at 17675. On further upside, the index may rally up to 17800. On the flip side, below 17550 the index could retest 17450- 17400 levels.

Also read: FOMC meeting this week: Jumbo rate hike of 75-100 bps on cards as US Fed focused on taming red hot inflation

Vinod Nair, Head of Research, Geojit Financial Services

The global market was expected to battle volatility as we approach the Fed policy announcement, while the latest inflation data remained above the estimates. The policy tone indicates hawkish measures, suggesting elevated hikes, leading to the pull-out of FIIs money from the Indian equities. However, this trend is expected to be short-lived, as future inflation trend forecast a clampdown, bringing stability in policy stance by the end of this year.

Prashanth Tapse – Research Analyst, Senior VP (Research), Mehta Equities

Markets witnessed a smart recovery as Nifty gained traction amid a cautious tone. The recovery was seen even as investors reassess aggressive Fed tightening bets amid looming recession risks. Traders now look forward to the important FOMC monetary policy meeting on September 20-21. Technically speaking, the biggest support to watch out will be at 17429 and below the same, Nifty could simply drift lower to 17161 mark. Nifty’s hurdles are placed at 17867 and then at 18115 mark.

Buy these two stocks for near-term gains, charts show strength; Nifty needs to hold above 17550, buy on dips

Posted on by

By Rahul Shah

FIIs have bought almost Rs 54,000 crore (including primary markets) in Aug’22, their highest since Jan’21. DIIs however turned sellers after 17 months and sold around Rs 7,000 crore. Economic indicators supporting the rally, oil price fell to 7-month low, strong FIIs buying interest, impressive quarterly results announcement and strong PMI data. Even the banking system is seeing a healthy recovery with systemic loan growth at a high of 15.3% YoY recently. The last time systemic loan grew by ~15.3% YoY was in Nov’13.

We expect northbound journeys to continue on Indian bourses not only on account of strong domestic factors but also due to global cues. The global markets climbed up 1-2% against the previous week close (Dow Jones best weekly performance since late July) despite continued tough talk by members of the Fed and ECB’s jumbo interest rate hike (75bps to 1.50%). This means, investors have already priced-in the US Fed to aggressively hike interest rates where market watchers expect a 0.50-basis-point – 75bps increase in the benchmark lending rate – which will now be held in Sept. Investors are taking advantage of enticing valuations with the S&P 500 trading around 16.8 times forward earnings, below the average of 17.2 times over the past decade.

The Cboe Volatility Index, also known as the VIX, fell below 23 after nearly touching 28 earlier in the week and Dollar Index fell to 109 from its recent high of 111. It means, volatility in the global market will cool down and markets are looking for earnings and latest economic data. The US, China, Europe, Australia and India will announce CPI and IIP data next week.

Also read: India’s milk export to boost Modi’s Atma Nirbhar Bharat; PM says dairy sector employs 8 crore families

Back home, expect the rally to continue in the domestic market due to strong macro, continued FIIs buying interest and oil price falling to 7-month low. Sensex gained nearly 1000 points or 2%, biggest weekly gain since July. Better than expected quarterly earnings along with strong PMI data and above normal monsoon will be big positive in the local bourses. FIIs were strong net buyers over Rs6000cr this week while Sensex has shown over 60k intra-day high this week. It is expected that the Indian markets will continue its upward journey and any decline will be good buying opportunity

Nifty has formed an Inside Bar on daily scale but a Bullish candle on weekly frame with long upper shadow. Now, it has to hold above 17550 zones, for an up move towards 17667 and 17777 zones whereas support is placed at 17442 and 17350 zones.

State Bank of India (Target: Rs 590)

State Bank of India has surpassed the falling supply trend line on a weekly scale and is respecting the 20 week average indicating strength in the counter. SBI has formed a strong bullish engulfing candle pattern on the weekly scale and follow up buying is visible. RSI oscillator is also positively placed on weekly and monthly charts and supports are gradually shifting higher. Looking at the overall price structure, we are expecting the stock to inch higher towards 590.

Oberoi Realty (Target: Rs 1,100)

Oberoi Realty has given a consolidation breakout on the weekly scale and has formed a strong bullish candle. On the monthly scale it is making higher highs since the last 3 months and supports are gradually shifting higher. RSI oscillator is positively placed which will support the move towards higher levels. Looking at the overall price structure, we are expecting the stock to inch higher towards 1100 zones.

(Rahul Shah is a Senior Vice President, Group Advisory Leader-PCG, Broking & Distribution, Motilal Oswal Financial Services. Views expressed are the author’s own.)

Share Market HIGHLIGHTS: Sensex ends 337 pts down, Nifty at 17630 on weekly F&O expiry day; HDFC Bank falls

Posted on by

Share Market News Today | Sensex, Nifty, Share Prices HIGHLIGHTS: Domestic stock market benchmarks BSE Sensex and NSE Nifty 50 ended half a per cent down on Thursday, a day of weekly F&O expiry. BSE Sensex fell 337 points or 0.6 per cent to 59,120, while NSE Nifty 50 was down 89 points or 0.5 per cent to settle at 17630. Stocks of Titan Company, Hindustan Unilever Ltd (HUL), Asian Paints, Maruti Suzuki India, ITC, Dr Reddy’s, Bharti Airtel, M&M, TCS, and NTPC were among top BSE Sensex gainers. On the flip side, Power Grid Corporation of India, HDFC Bank, Axis Bank, Housing Development Finance Corporation (HDFC), Reliance were among top index draggers. Bank Nifty index tumbled 1.4 per cent to settle at 40,631.

Live Updates

Share Market Today | Sensex, Nifty, BSE, NSE, Share Prices, Stock Market News Updates

15:35 (IST) 22 Sep 2022 Sensex, Nifty end weekly F&O expiry day in red; fall 0.5%

BSE Sensex fell 337 points or 0.6 per cent to 59,120, while NSE Nifty 50 was down 89 points or 0.5 per cent to settle at 17630

15:12 (IST) 22 Sep 2022 US Federal Reserve may hike interest rate by 75bps yet again in November; FOMC unlikely to cut rates in 2023

The US Fed on Wednesday raised rates by 75bps, 3rd consecutive jumbo rate hike (highest since CY08), to a new target range. Fed Chair Jerome Powell in his statement signalled more rate hikes going forward to tame red hot inflation in the US. The median projections for federal funds rate is now expected at 4.4% in 2022. “We have got to get inflation behind us. I wish there were a painless way to do that. There isn’t,” Powell said after officials lifted the target for the benchmark federal funds rate to a range of 3% to 3.25%. According to analysts, the hawkish Fed commentary has pushed market expectations of a reversal in policy tightening through rate cuts to 2024 from late 2023 earlier. Read full story

14:44 (IST) 22 Sep 2022 Remain constructive on Indian equities over the medium-term

While rising in interest rates represent a headwind for Indian equities, our buoyant domestic demand scenario presents a sliver of hope for global investors looking to diversify globally. We remain constructive on Indian equities over the medium-term and continue to orient our portfolios around domestic cyclical which continue to look attractive to us from a medium-term perspective. Trideep Bhattacharya, CIO Equities, Edelweiss MF

13:52 (IST) 22 Sep 2022 Motilal Oswal AMC launches Gold and Silver ETFs FoFs

Motilal Oswal Asset Management Company (MOAMC) has announced the launch of Motilal Oswal Gold and Silver ETFs FoFs, with an objective to generate returns by investing in units of Gold ETF and Silver ETF. The NFO will open on 26th September 2022 and closes on 7th October 2022.

13:46 (IST) 22 Sep 2022 Infosys share price hits 52-week low tracking fall in US IT stocks, tanks 28% YTD; should you buy, sell, hold?

Infosys share price fell more than 1 per cent to Rs 1,360.05 apiece on BSE, a new 52-week low in Thursday’s intra-day trade, tracking the fall in US IT stocks overnight. On the back of growth concerns, the stock has fallen more than 3 per cent in the last five days, 13 per cent in one month, and 27 per cent in the last six months. The IT bellwether has tanked 28 per cent so far this year, and 20 per cent in one year. In comparison, the S&P BSE Sensex was down less than one per cent in the last month. Analysts say that despite being a very low debt, and consistently well performing sector, IT stocks including Infosys recently have seen a sharp dip due to a worsening US & European economy including sharp sell offs in tech giants across the globe. Read full story

13:17 (IST) 22 Sep 2022 India’s GDP to grow at 7.5% in FY23 despite developed-economy recession; inflation to stay above 6% till Nov

India’s export outlook looks weak going forward amid global headwinds. Since exports were the key peg for strong real GDP growth in the first half of the current financial year, when domestic demand was in the early stages of its climb back to pre-covid levels, analysts at ICICI Securities have lowered their real GDP growth forecast for FY23 to 7.5%. As oil prices moderate, the fiscal and current account deficits are expected to moderate sharply in H2FY23. Read full story

12:11 (IST) 22 Sep 2022 Indian equity markets can witness increased volatility in near-term

With the US Fed increasing rates by 75 bps and hinting at more rate hikes in the future, we believe the Dollar index can see a significant increase, implying most major market currencies, including INR should be under pressure. If we start seeing INR depreciating, then from a USD returns perspective for FPIs, India becomes unattractive. We could also witness a reversal of FPI flows in the near to medium term, which will increase market volatility. Higher interest rates in the US will force major central banks, including India, to increase interest rates to stem the pressure on their domestic currencies and with increased interest rates and cost of capital, market multiples can contract. We believe in the near term, Indian equity markets can witness increased volatility. Naveen Kulkarni, Chief Investment Officer, Axis Securities PMS

11:34 (IST) 22 Sep 2022 Buy these two stocks to pocket gains, charts show upside; Nifty short-term trend looks choppy

The short-term trend of Nifty continues to be choppy. The market is stuck within a broader high low range of 18100-17500 levels and the movement within the said range is expected for the next few sessions. Any decisive move beyond this range is likely to bring acceleration in the momentum on either side. Read full story

11:08 (IST) 22 Sep 2022 A move past 80.10 mark has opened doorway for depreciation in rupee towards 81

“The Indian rupee has plunged to a fresh record low of 80.61 mark amid signs of escalating Russia-Ukraine tensions and a hefty rate hike of 75 bps by the US Fed for the third time in a row, which has led to a vertical rally in the greenback towards two-decade highs of 111.78 level. The US central bank struck a more hawkish tone than expected at its latest meeting indicating that it will aggressively front load rate hikes to rein in runaway inflation, even at the risk of hurting growth. Slowing portfolio flows in the domestic markets have further accentuated the decline witnessed in the rupee-dollar exchange rate, even as weakening crude oil prices are still capping losses in the domestic currency. Further ahead, a move past the 80.10 mark has opened the doorway for depreciation in the Indian rupee towards the 81 mark in the coming days.”

~ Sugandha Sachdeva, Vice President – Commodity and Currency Research, Religare Broking

11:04 (IST) 22 Sep 2022 Gold Price Today, 22 Sep 2022: Gold falls on strong dollar after US Fed’s rate hike, MCX support at 48800

Gold Price Today, Gold Price Outlook, Gold Price Forecast: Gold rate and silver rate were trading weak in India on Thursday, on the back of strength in US Dollar. On Multi Commodity Exchange, gold October futures were trading flat to negative at Rs 49,439 per 10 gram, as against the previous close of Rs 49,443. Silver December futures were ruling Rs 96 or 0.2 per cent down at Rs 57,202 per kg on MCX. Read full story

10:39 (IST) 22 Sep 2022 Rupee may fall to 81.5 levels against US dollar

It is apparent from the recent action and commentary of the US Federal Reserve that we are still far away from the end of the rate hike cycle. We reckon that the rupee is expected to remain under pressure despite the improvement in domestic economic prospects. Additionally, for the RBI it will be difficult to intervene and take strict actions to curb the rupee depreciation as the liquidity in the banking system has swung into deficit mode after remaining in a surplus mode for almost 40 months and at the current juncture, the RBI doesn’t want to derail the economic recovery. Technically, the USDINR pair witnessed a breakout of ascending triangle formation that may lead to further weakness in the rupee towards the 81.5-82 zone however 81 will be an intermediate and sacrosanct support level for the rupee. Santosh Meena, Head of Research, Swastika Investmart

09:44 (IST) 22 Sep 2022 Rupee hits fresh all-time low

Rupee hit lifetime low level after the Fed decision dollar index traded on above 111 levels. Due to this rupee and other Asian currencies were trading lower. Today as expected, Rupee traded at life time low of 80.40 levels. Eur against dollar was also trading at 20-yr low at 0.9822 and GBP against dollar was also trading at 29-yr low at 1.1234 levels. Due to the hawkish statement of FED, we expect other major currencies against dollar may depreciate. Rupee may also further depreciate and test 81-82 levels very soon. Anuj Gupta, VP, IIFL Securities

09:36 (IST) 22 Sep 2022 Bank Nifty down 0.3%

Bank Nifty index was down 0.3 per cent to trade at 41,088.85

09:33 (IST) 22 Sep 2022 HDFC, Wipro, Dr Reddy’s were Sensex losers

Housing Development Finance Corporation (HDFC), Wipro, Tech Mahindra, Dr Reddy’s, HCL Tech, Sun Pharma were Sensex losers

09:28 (IST) 22 Sep 2022 ITC, IndusInd Bank top Sensex gainers

ITC, Bajaj Finance, IndusInd Bank, NTPC, Kotak Mahindra Bank, Axis Bank, Nestle India, and Tata Steel were top Sensex gainers

09:25 (IST) 22 Sep 2022 Sensex, Nifty down nearly 0.5%

BSE Sensex was down 235 points or 0.4 per cent at 59,221, while NSE Nifty was down 54 points or 0.3 per cent to 17,664

08:44 (IST) 22 Sep 2022 Wipro fires 300 employees for moonlighting

Wipro Chairman Rishad Premji on Wednesday said the company had found 300 of its employees worked with one of its competitors at the same time, and added that action was taken in such cases by terminating their services. Premji asserted that he stands by his recent comments on moonlighting being a complete violation of integrity “in its deepest form”. In the previous trading session, the share closed down 1.02% or Rs 4.15 at Rs 400.80 on the BSE.

08:43 (IST) 22 Sep 2022 IDBI Bank sells its entire stake in Ageas Federal Life Insurance

IDBI Bank sold its entire stake in Ageas Federal Life Insurance Company to partner Ageas Insurance International NV. In May 2022, the bank had entered into a Share Purchase Agreement to sell its entire stake of 20 crore equity shares in Ageas Federal Life Insurance Company to Ageas Insurance International NV. With this sale, IDBI Bank’s shareholding in Ageas Federal Life Insurance Company now stands at NIL.

In the previous trading session, the share closed down 2.43% or Rs 1.10 at Rs 44.20 on the BSE.

08:06 (IST) 22 Sep 2022 Bulls and bears likely to tussle for dominance amid volatility; 5 things to know before market opening bell

Indian benchmark indices BSE Sensex, NSE Nifty 50 are likely to open in red, tracking weak global. Early trends in SGX Nifty hinted at a gap-down opening for the broader domestic frontline index with a loss of 121 points. Markets will react to the Fed’s interest rate hike decision. An aggressive commentary is expected to lead to higher volatility and pressure on the market, according to analysts. “If Nifty trades below 17700, it could trigger short-term correction. Below the same, the index could slip till 17550-17500. The current market texture is non directional, hence level-based trading would be the ideal strategy for short-term traders,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.

Read full story

07:36 (IST) 22 Sep 2022 Asian markets in red

Asia markets traded lower on Thursday after the U.S. Federal Reserve raised interest rates and signaled further hikes ahead. U.S. stocks were volatile and closed sharply lower following the announcement. In Hong Kong, the Hang Seng index fell 2.19% in early trade, with the Hang Seng Tech index dropping 3.08%. The Shanghai Composite in mainland China shed 0.37% and the Shenzhen Component declined 0.546%. The Nikkei 225 in Japan slipped 1.2%, and the Topix index fell 0.84%.

07:35 (IST) 22 Sep 2022 Wall Street stocks slump

Wall Street’s main indexes see-sawed before slumping in the final 30 minutes of trading to end Wednesday lower, as investors digested another supersized Federal Reserve hike and its commitment to keep up increases into 2023 to fight inflation. The Dow Jones Industrial Average fell 522.45 points, or 1.7%, to 30,183.78, the S&P 500 lost 66 points, or 1.71%, to 3,789.93 and the Nasdaq Composite dropped 204.86 points, or 1.79%, to 11,220.19.

07:34 (IST) 22 Sep 2022 SGX Nifty hints at a negative start for Indian equities

Nifty futures traded 133 points, or 0.75% lower at 17,583 on the Singapore Exchange, signaling that Dalal Street was headed for a negative start.

Bond market investors should invest in infra assets: Crisil

Posted on by

With their credit risk profile and long-term nature showing improvement over the past few years, infrastructure assets are increasingly becoming a preferred investment choice for bond market investors, according to a report by Crisil Ratings.

The agency further said the improvement in the credit risk profile reflects a series of policy measures that has helped boost the attractiveness of the infra sector as an investment destination.

Also Read: EPFO pension scheme may cover unorganised workers 

Entities rated AAA and AA comprised ~46% of the Crisil Ratings infra portfolio (361 companies) last fiscal, compared with ~22% (260 companies) in FY17.

This is also reflected in the median ratings by Crisil portfolio of infra assets improving from ‘BBB’ in FY17 to ‘A+’ last fiscal, it showed.

Gurpreet Chhatwal, MD, Crisil Ratings, said: “The government has taken a slew of measures to address legacy issues in the infrastructure sector. Risk sharing in contracts has improved with the concessioning authorities assuming their fair share of risks, and concession agreements revised to remove bottlenecks.

“Now, central counterparties are playing a greater role, and the introduction of InvITs has boosted investor confidence.”

Government-owned companies such as National Highways Authority of India (NHAI), Solar Energy Corporation of India (Seci), NTPC, and PowerGrid Corporation have ensured predictability in the payment cycles, reducing cash-flow volatility significantly, the analysis said, adding that the IBC and pre-IBC platforms have also improved the recovery prospects and resolution timelines.

Reliance, Suzlon Energy, Bharti Airtel, Zydus Lifesciences, Poonawalla Fincorp, APL Apollo stocks in focus

Posted on by

Indian equity markets are expected to start the week and month on a negative note. SGX Nifty was in red ahead of the session, hinting at a gap-down start for NSE Nifty 50 and BSE Sensex. “The week is a holiday-shortened one and marks the beginning of the new month also, so important data like auto sales, S&P Manufacturing PMI and S&P Services PMI will be in focus. Besides, the performance of global markets, FIIs trend, and movement in currency and crude will also remain on participants’ radar,” said Ajit Mishra, VP – Research, Religare Broking.

Also Read: Uneven rain may lead to fall in Kharif crop output, high food prices

Poonawalla Fincorp: Care Ratings has upgraded the long-term rating of Poonawalla Fincorp and its subsidiary, Poonawalla Housing Finance (PHFL) to ‘AAA’ with a stable outlook. This rating is applicable for bank loan facilities, non-convertible debentures, market-linked debentures and subordinated debt.

Bharti Airtel, Reliance: 5G networks in India were officially inaugurated last week. Bharti Airtel and Jio are set to launch their 5G plans in India soon. Jio will bring in its 5G plans by Diwali, around October 22 – 26. The service will initially be available in Delhi, Mumbai, Kolkata, and Chennai. Airtel rolled out 5G services in eight Indian cities starting Saturday. While Airtel hasn’t clarified which eight cities these are, metro cities like Mumbai and Delhi are expected to be included. Sunil Bharti-led Airtel has also announced that it will bring 5G connectivity all across India by March 2024.

Suzlon Energy: Shares of Suzlon Energy will trade ex-rights for its rights issue of 5 shares for every 21 shares held by the shareholder. Last month, the company had announced earlier that its board has decided to issue equity shares of the company via a rights issue to the eligible equity shareholders of the company. The total number of equity shares and rights issue size is 240 crore equity shares of Rs 2 each at an issue price of Rs 5 per equity share, aggregating to Rs 1,200 crore.

Dilip Buildcon: The company received a provisional completion certificate for rehabilitation and up-gradation from two to four lane for Varanasi – Dagamagpur section of the National Highway-7 on EPC mode in Uttar Pradesh. With this, the authority declared the project fit for entry into commercial operation on September 29.

Also Read: Stock market holidays October 2022: BSE, NSE to remain shut on these days this month, check here

APL Apollo Tubes: The steel tube maker registered the highest quarterly sales volume of 6.02 lakh tonnes in Q2FY23, up 41 percent YoY and growing 42 percent sequentially. The sales volume for the first half of FY23 was 10.25 lakh tonnes compared to 8 lakh tonnes in the same period last year. In the second half of FY23, the sales volume would get a further boost from the commissioning and ramp-up of the new Raipur plant, the company said.

OYO IPO valuation falls in private market after SoftBank’s reported markdown

Posted on by

Valuation of IPO-bound OYO in the private market has dipped to around USD 6.5 billion following reports of a markdown of valuation of the hospitality and travel-tech firm by SoftBank in its private books, according to industry players. In the week ended September 30, 2022, nearly 12.3 lakh shares of the company were sold in the private market as compared to over 1.6 lakh shares sold in the previous week.

The sell-off followed reports that its largest investor SoftBank has cut the valuation of the hospitality platform by 20 per cent to USD 2.7 billion in its books, said a source. When OYO updated its financials in its draft prospectus last month, reporting positive EBIDTA besides the narrowing of losses, the company’s share price in the private market had risen to Rs 94 per share. However, in the subsequent days following reports of the markdown of OYO’s valuation by SoftBank, the company’s valuation dipped by nearly 13 per cent to Rs 81 per share, said the source.

“Last year, transactions (of OYO shares) in private markets happened at around USD 8 billion range but in the recent past transactions are happening up to USD 6.5 billion valuation,” Analah Capital CEO & Founder Vaishali Dhankani said in an e-mailed response. Dhankani, who is also the CEO of Tradeunlisted.com, a tech-based distribution platform for private equity, said some of OYO’s “past distractions seem to have gone away and one anticipates a stronger bottom line and sticking to its knitting.” Last month, in a regulatory filing OYO reported a revenue of Rs 1,459.32 crore in the three-month period ended June 30, 2022.

Also read| OYO acquires Denmark-based holiday home operator Bornholmske Feriehuse

The company, which had last year in October filed preliminary papers with Sebi to raise Rs 8,430 crore through an initial share-sale, also posted an “adjusted EBITDA” of Rs 7.27 crore in the quarter ended June 30, 2022, improving from adjusted EBITDA loss of Rs 471.72 crore in FY22.According to the filing, OYO’s restated loss for the three-month period ended June 30, 2022 stood at Rs 413.87 crore. In the fiscal ended March 31, 2022 it had posted a loss of Rs 1,939.8 crore.

OYO said its total number of ‘storefronts’ was down at 1,68,012 in the quarter ended June 30, 2022 from 1,68,639 as on March 31, 2022 due to a decrease in the number of hotels to 12,668, sequentially down from 17,994 in the fiscal ended March 31, 2022. When it filed the draft prospectus for its initial public offer, OYO was initially looking at a valuation of around USD 10 billion but later on prepared to settle for a lower valuation at around USD 7-8 billion.

US Stocks: Wall St heads for mixed open as rate worries linger

Posted on by

Wall Street’s main indexes were set for a mixed open on Thursday as a slew of economic data pointed to resilience in the U.S. economy, likely keeping the Federal Reserve on track for aggressive interest rate hikes to tame inflation.

U.S. retail sales unexpectedly rose 0.3% in August as lower gasoline prices supported spending, data showed, in a sign that the economy could tolerate higher interest rates as the Fed tightens monetary policy.

“The economic conditions are quite good in the U.S. and it’s pretty compatible with the path of the 75-basis-point hike for the next meeting,” said Mabrouk Chetouane, head of global market strategy at Natixis Investment Managers Solutions.

“If investors are still underestimating the Fed’s determination to fight against inflation, one of the key concerns is that we’ll see volatility increase in the coming weeks.”

The CBOE Volatility index, also know as Wall Street’s fear gauge, edged up to 26.19 points, above its long-term average of 20.

The main stock indexes closed slightly higher on Wednesday after wavering throughout the session as an on-target inflation print provided relief after Tuesday’s hotter-than-expected consumer prices data sparked the biggest percentage decline on Wall Street since June 2020.

Investors fear steep rate hikes by the Fed will drive the economy into a recession, with many market observers concerned over the lagging effects of the central bank’s tightening phase.

Also Read: US stocks suffer their worst day in more than two years

Money markets are pricing in a 74% chance of a 75-basis-point hike, while placing 27% odds of a 100-bps hike next week.

The yield on two-year Treasury notes, a bellwether for interest rate expectations, touched new 14 year highs at 3.85%.

Shares of rate-sensitive growth and technology stocks slipped alongside a rise in bond yields.

Apple Inc, Meta Platforms and Tesla Inc were down 0.2% in premarket trading. Netflix Inc , however, gained 2.7% as Evercore ISI upgraded the stock to “outperform”.

At 08:53 a.m. ET, Dow e-minis were up 55 points, or 0.18%, S&P 500 e-minis were down 1.75 points, or 0.1%, and Nasdaq 100 e-minis were down 21.25 points, or 0.17%.

Union Pacific and CSX Corp jumped nearly 3% each after U.S. railroad operators and unions secured a tentative deal to avert a rail shutdown that could have hit food and fuel supplies across the United States.

Adobe Inc slumped 10.2% after the photoshop maker said it would buy Figma in a cash-and-stock deal that valued the online design startup at about $20 billion.

How to tide stock market volatility: Invest in Nifty on meaningful correction to create long-term wealth

Posted on by

By Manish Jain

2022 has been anything but kind to the global economy. The US is slowly slipping into a recession, the European economy is in shambles and China stares at a stagflation sort of situation. The issues at hand are the fragile geo-political situation, the Russia-Ukraine war, and the pandemic, which has all taken a toll on the global economy. US GDP has already witnessed two successive quarters of negative growth, the EU has been flattish but waiting now to slip into a negative zone and China, which witnessed an abysmal 0.4% growth in 2QCY22, is likely to struggle to grow at 4% also in the current year.

Also read: RBI Monetary Policy: MPC to hike repo rate by 35-50 bps; global recession may risk growth forecast

The second issue that we have been fairly proactive in tackling before it went out of control, is inflation. India remains the best place in the world as far as inflation is concerned. Our CPI inflation at ~7% is just ~ 200bps away from the long-term average. The repo rate at 5.4% is just a hop, skip and jump away from making the real rates neutral. This is a far cry from the rest of the world, which continues to struggle. The proactive approach now puts RBI as one of the best central banks in the world.

The domestic capex cycle is showing signs of revival. Corporates have been cautious, and rightly so, but the green shoots now are visible. Balance sheets are strong, cash flow positions comfortable and capacity utilization higher than the longer average. This essentially means that soon enough we shall the private sector capex come back and will come back strong, thereby pushing the system credit growth even higher than the current trajectory. This improves the overall outlook for the economy quite a bit.

Also read: Gautam Adani slips to third place in world’s rich list, Mukesh Ambani out of top-10 after Monday’s D-St rout

Lastly, they say every dark cloud has a silver lining. The recession in USA and EU may be bad for the overall economy but helps India quite a bit. It is true that it impacts the BoP but there are ways to tackle that (Hint: Gold import curbs), however, the softening of the commodity prices help us quite a bit. The margin concerns are now a thing of the past and confidence that Nifty will be able to deliver strong double-digit growth is now fairly high.

So, the crux of the matter is India stands tall amidst ruins. In a volatile market, do not miss the opportunity. Invest every time the Nifty shows meaningful correction and you shall create wealth for yourself in the long term. However, remember to invest only in Good & Clean companies.

(Manish Jain is a Fund Manager at Coffee Can PMS, Ambit Asset Management. The views expressed in the article are of the author and do not reflect the official position or policy of FinancialExpress.com.)

ACC Q2 profit beats estimates

Posted on by

ACC, an Adani Group cement company, has posted a consolidated net profit of Rs 388 crore for the second quarter ended September, buoyant on an improved demand for its premium products and operational efficiencies. In comparison, the company had posted a net loss of Rs 87 crore a year ago.

The company’s revenue rose 11.2% to Rs 4,435 crore from Rs 3,987 crore in Q2FY23. The cement manufacturer had posted a net profit of Rs 466 crore in the sequential quarter ended June, ACC said in a statement.

“This growth is attributed to the improved demand for our premium cement products up by 1.5 percentage points on a year-on-year basis at 32% of trade sales and net dealer addition of 534 during the quarter across all markets. In operational efficiencies, electrical energy consumption improved by 6.4 kilowatt-hour per metric tonne (kWh/t) at 73.9 kWh/t with clinker factor improvement from 57.2% to 56.6% coupled,” CEO Ajay Kapur said.

“Our commitment to enhancing logistics efficiencies has resulted in a road direct despatch increase from 52% to 58% and an increase in rail coefficient by 5 percentage points to 34%,” he added.

ACC’s clinker and cement sales volume rose by 17.3% y-o-y to 8.1 million tonne, while kiln fuel cost fell by 42%, driven by fuel mix optimisation and higher alternative fuel consumptions.

During the quarter, ACC’s The Waste Heat Recovery System (WHRS) at Kymore & Jamul (22.4 MW) became fully operational, while another 16.3 MW at Ametha is expected to be commissioned in Q3. The share of WHRS in total power consumption will increase to 9% by the end of FY24 against 2.9% in the last quarter, it said.

On the outlook, the firm said it expects the industry to witness a volumetric growth as the demand environment remains “robust” on the back of increased housing and infrastructure spend.