Sensex, Nifty Log The Second Worst Week Since February

India's stock benchmarks logged their second worst week in almost 10 months since the week ended February 26, 2021, dragged by broad based losses across sectors barring information technology. Both S&P BSE Sensex and NSE Nifty 50 also posted their steepest single day decline since December 6.

Barring Nifty IT, all the other sectoral indices declined on a weekly basis.

Wipro Ltd. was the top gainer on the Nifty 50 index this week, followed by Power Grid Corp of India Ltd., Infosys Ltd. and Tech Mahindra Ltd. About eight stocks advanced this week while 42 declined.

On Friday's session, the S&P BSE Sensex fell 1.54% (889 points) to 57,011.74. The 30-stock gauge fell 950 points in intraday trade. The NSE Nifty 50 index also fell by the same magnitude to 16,985.20. This is the first time the 50-stock index closed before 17,000 mark since December 6. IndusInd Bank Ltd. had the largest drop, falling 4.9%. Today 44 of 50 shares fell, while six rose.

The broader indices underperformed their larger peers with S&P BSE MidCap and S&P BSE SmallCap slipping over 2%. Barring S&P BSE Information Technology and S&P BSE Teck, all the other 17 sectoral indices compiled by BSE Ltd. declined with S&P BSE Realty leading the losses, as it fell as much as 3.78%.

The market breadth was skewed in the favour of bears. About 1,049 stocks advanced, 2,292 declined and 98 remained unchanged.

"One of the key events during the week ended Dec17, 2021 was the US Federal reserve meeting. While the Fed maintained policy rates, they signalled an increase the pace of tapering from USD 15bn/month to USD 30bn/month. The projections for the path of Fed rate hikes has also moved higher for next three years. The FOMC dot plot now shows three rate hikes now in 2022 as compared to one hike projected earlier. The Bank of England hiked interest rates from 0.10% to 0.25% while the ECB further cut its bond purchases", Shibani Kurian, Senior EVP & Head - Equity Research, Kotak Mahindra AMC wrote in a note, and added that even while the structural drivers of the Indian equity markets are intact over the medium to long term, in the near term given the current valuations (both absolute and relative), Indian equity markets could witness some degree of volatility. Market direction would be largely determined by 1) any third wave of COVID from new variant 2) flows from domestic investor as well as FIIs 3) demand trend over next few months and 4) movement in input cost inflation. RBI’s monetary policy and Union budget (to be presented in February) would be some of the other key events to watch out for.

Shares of Wipro Ltd. rose 4.42%, the biggest intraday rise in two months, to Rs 672.75, amid a rally in information technology stocks.

• Over the past two sessions, Wipro's shares have risen over 5%.

• Wipro signed an agreement to acquire U.S. based LeanSwift Solutions on December 15.

Source: Exchange Filing

Shares of KEC International Ltd. rose over 2% in intraday trade to Rs 463.5 apiece after the company secured new orders worth Rs 1,041 crore across its various businesses.

The company's transmission and distribution business bagged order for projects in India, Middle East and Americas.

Civil business received an order for building a data centre in western India while cables business secured orders both on the domestic and overseas front.

With these order, KEC International's year-to-date order intake stood at nearly Rs 12,000 crores, over 100% rise from last year.

Source: Exchange Filing

Of the 32 analysts tracking the company, 24 maintained 'buy', seven maintained 'hold' and one maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 14.8%.

Trading volume on the stock was 3.3 times the 30-day average volume, for this time of the day.

Shares of Paytm slipped over 3.5%, as they head for the lowest close since the company's debut last month. The stock is down 37% from its issue price of Rs 2,150.

• Hindalco Industries Ltd. signs pact to acquire Hydro’s aluminium extrusions business in India.

• This will be purchases for an enterprise value of Rs 247 crore.

• This will extend Hindalco’s footprint in South India- second largest extrusions market in India.

• The acquisition expands company’s presence in the upper-end of the value-added market.

Source: Exchange Filing

Shares of V-Guard Industries fell for the seventh straight day, on track for the longest losing streak in 16 months since the period ended August 3, 2020.

Shares of the company declined over 5% during the streak while the Nifty 50 fell nearly 2%.

Of the 23 analysts tracking the company, 16 maintained 'buy', four 'hold' and three 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 33.9%.

Shares of Orchid Pharma Ltd. rose 4.6% in intraday trade to Rs 419.75 apiece after the company approved a draft scheme of amalgamation and arrangement between itself, Dhanuka Laboratories Ltd., and the respective creditors and shareholders.

The scheme is subject to regulatory approval. In an exchange filing post market hours Thursday, Orchid Pharma said that the amalgamatic is in accordance with resolution plan and is aimed at creating a much larger company with sales potential of Rs 1,400-1,500 crore and Ebitda of Rs 200-250 crore.

The scheme does not involve payment of any cash consideration.

Trading volume on the stock was 1.7 times the 30-day average volume, for this time of the day. The stock tested the 100-day moving average resistance at Rs 418.68 in intraday trade.

Greenlam Industries Ltd. has received permission to resume manufacturing activity at its Behror plant in Rajasthan. The company had temporarily closed down the manufacturing activities at the plant on directions from Commission for Air Quality Management in National Capital Region and adjoining areas on December 10.

The company also released the transcript of the virtual investor and analyst meet held on Thursday in which the company outlined capital investment plans across segments.

Shares of Greenlam Industries rose nearly 3.7% to Rs 1,824.95 apiece before paring some of the gains.

Of the eight analysts tracking the company, six maintained 'buy', one 'hold' and one 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied a downside of 15%

Shares of Hindustan Unilever Ltd. shed over 3%, the steepest decline in more than three weeks, to Rs 2,237.

• Trading volume on the stock was 1.7 times the 30-day average volume, for this time of the day.

• Relative strength index on the stock was 29, suggesting it may be oversold.

• Of the 38 analysts tracking the company, 31 maintained 'buy', five maintained 'hold' and two 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 30%

• Liabilities are due from FY2026-27 to FY2031-32 with an interest rate of 10%.

• Airtel acquired 128.4 MHz spectrum for Rs 19,051 crore in 2014 auction.

• Pre-payment will likely result in interest cost savings of at least Rs 3,400 crore.

Source: Exchange Filing

India's stock benchmarks tumbled on Friday, dragged by all sectors barring information technology, amid concerns over faster tapering of monetary stimulus by global central banks and the economic impact due to omicron variant of covid-19 virus.

The S&P BSE Sensex shed 1.3% (750 points) to 57,151.05. The 30-stock gauge fell nearly 1.5% in intraday trade, testing 57,000 levels. The NSE Nifty Index also declined by similar magnitude to 17,004.95. The 50-stock gauge slipped below 17,000 in intraday trade for the first time since December 6.

The broader indices almost mirrored their larger peers with the S&P BSE MidCap shedding 2% and S&P BSE SmallCap falling 1.5%. Barring S&P BSE Information Technology and Teck, all the other 17 sectoral indices declined with S&P BSE Realty slipping over 3%.

The market breadth was skewed in the favour of bears. About 954 stocks advanced, 2,290 decllined and 102 remained unchanged.

Shares of I.T. services firm Persistent Systems Ltd. rose over 5.5%, the biggest intraday gain in almost three weeks, to a record Rs 4,752.1 apiece amid the rally in the sector following the upward revision of revenue guidance by global peer Accenture.

Persistent Systems has been selected by Germany's ATOSS to transform its customer relationship management with the help of salesforce integrations. ATOSS is a software provider for workforce management. It has over 10,000 customers across the world.

Persistent will first implement sales cloud to replace and redefine the current sales and service processes at ATOSS. This will enable digital transformation of ATOSS through standardisation and optimisation of business processes

Of the 32 analysts tracking the company, 20 maintained 'buy', seven 'hold' and five 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied a downside of 8.4%. Trading volume on the stock was 6.4 times the 30-day average volume, for this time of the day.

The Indian rupee is poised for fourth weekly decline as equities tumbled amid expectations of faster withdrawal of monetary stimulus by the global central banks.

• USD/INR climbed 0.2% to 76.2225 on Friday, up 0.6% this week.

• Benchmark 10-year yields rose 1bp Friday to 6.39%.

• SoftBank Group Corp. will continue to invest in India's digital companies, undeterred by the recent plunge in Paytm.

• SoftBank has so far invested $14 billion in India

• SoftBank expects digital market to keep booming on strong retail demand.

• There is no market in the world that can massify technology as India is doing.

• SoftBank founder Masayoshi Son believes in Indian market and would invest in Indian growth.

• India will be a very large digital market, in the long run.

• SoftBank aims to invest $5 billion to $10 billion in India next year.

Source: Manoj Kohli, Country Head of SoftBank India to Bloomberg TV

Shorter-term India sovereign securities declined in Friday morning trading.

• The 5-year yield rose 1.6bps to 5.71%

• The 10-year yield rose 1.3bps to 6.388%

• The 20-year yield remained unchanged at 6.872%

• The 5-year-10-year yield spread was 67.8bps, vs previous close 68.1bps

• The NSE Nifty 50 Index fell 1.3%

Source: Bloomberg

BLOOMBERG EXCLUSIVE

• Government is considering changes that would make it easier to lower its stake in state-run banks.

• Proposals, if approved, would allow government to lower its holding in state-run banks to 26% from 51%.

Source: People with knowledge of the matter.

Ministry of Chemicals and Fertilisers has given its nod for the setting up of new 1,200 MTPA plant at Rashtriya Chemicals & Fertilizers Ltd.'s Thal unit in Raigad in Maharashtra.

• The estimated project cost is at Rs 914.58 crore.

• The project is expected to be completed in 36 months. The decision regarding applicability of surplus ammonia policy is awaited from the Ministry.

Source: Exchange Filing

Burger King India Ltd. approved the acquisition of controlling stake in PT Sari Burger Indonesia.

In an exchange filing after market hours Thursday, Burger King said it will acquire 83.24% stake from current shareholders of PT Sari Burger at an enterprise value of $183 million.

Post the acquisition, Burger King will infuse $40 million fresh capital by way of subscription to fresh shares issued by PT Sari Burger, towards supporting future business needs, expansion plans and further acquisitions.

Shares of Burger King shed over 2.8% in intraday trade to Rs 149 apiece. Of the 10 analysts tracking the company, seven maintained 'buy', two maintained 'hold' and one maintained 'sell' recommendations. The overall consensus price of analysts tracked by Bloomberg implied an upside of 30.7%.

RateGain Travel Technologies pre-market discovery price at Rs 364.80 vs IPO price of Rs 425 per share.

Source: Bloomberg

Shares of I.T companies like Tata Consultancy Services, Infosys, Wipro, HCL Technologies and Tech Mahindra rose in an otherwise tepid market, after their global peer Accenture upgraded its annual guidance by 700bps. Accenture continues to benefit from cloud transformation and the strong commentary indicates the stickiness of the demand for I.T. services.

Here's Motilal Oswal on what Accenture's commentary means for Indian I.T. firms

Motilal Oswal

• Accenture's strong commentary of strength in spends, traction for digital, cloud reinforces confidence on demand sustainability.

• Demand aided by factors such as (i) digital adoption, (ii) multi-year cloud transformation journey, which will open up new opportunities.

• Accenture's sharp increase in guidance indicates the pace of demand momentum in the sector. Need to closely watch Indian I.T. firms' FY23 guidance as growth expectations rise.

• Accenture's commentary on better pricing echoes the view of Indian I.T. services peers.

• Decline in attrition in Accenture was surprising and suggests some moderation in the supply crunch.

• Maintains positive stance on I.T. sector and expects sustained growth with stable margin

• Infosys, HCL Tech and Tata Consultancy Services remain the preferred picks in I.T. space.

India's stock benchmarks opened little changed, as gains in information technology stocks were offset by losses in dragged by consumer durables and auto stocks, amid concerns over impact of faster tapering, omicron variant and geopolitical tensions following U.S. sanctions on China.

The S&P BSE Sensex opened flat at 57,855.41. The NSE Nifty 50 also traded largely unchanged at 17,238.69.

The broader indices underperformed their larger peers with S&P BSE MidCap shedding 0.5% and S&P BSE SmallCap slipping 0.3%. Barring S&P BSE Information Technology and Teck indices, all the other 17 sectoral indices compiled by BSE Ltd. declined.

The market breadth was skewed in the favour of bears. About 1,074 stocks advanced, 1,315 declined and 93 remained unchanged.

Indian bond traders are awaiting a weekly government bond sale, which will see Rs 24,000 crore of debt on offer. The rupee is heading for a fourth weekly decline.

• USD/INR has gained 0.4% this week to close on Thursday at 76.0938.

• Benchmark 10-year yields rose 1bp Thursday to 6.38%

• Global funds sold a net Rs 1,470 crore of India stocks Thursday, according to NSE; they sold Rs 1,180 crore of sovereign bonds under limits available to foreign investors, and withdrew Rs 468 crore of corporate debt.

• State-run banks bought Rs 104 crore of sovereign bonds on December 16: CCIL data. Foreign banks bought Rs 915 crore of bonds.

Source: Bloomberg

India's I.T. stocks may move after global peer Accenture increased its full-year revenue forecast.

In Focus: Tata Consultancy Services Ltd., Infosys Ltd., Tech Mahindra Ltd., HCL Technologies Ltd. and Wipro Ltd.

• Affle India Ltd.: DAM Capital Advisors initiated coverage of the stock with an 'outperform' recommendation; target price at Rs 1,489.

• Bata India: Kotak PCG (Retail) initiates coverage with ‘buy’ recommendation, price target set at Rs 2,380.

Source: Bloomberg

India’s Power Ministry has asked banks to tighten norms introduced by Power Finance Corp and REC Ltd. before lending to state electricity distribution utilities, the Economic Times reported, citing a letter written by Alok Kumar, a top bureaucrat in the department, last month.

• Huge debt and outstanding payables of distribution companies to their creditors is a concern, posing a challenge to the power sector, the newspaper quoted Kumar saying in the letter.