Morning Update: Among sectors, IT, Metal, power and Bank are trading in the red, while buying is seen in the oil & gas and realty name. HCL Technologies, Coal India, Hero MotoCorp, Tata Consumer and ONGC were among major gainers on the Nifty, while losers were Infosys, Wipro, Axis Bank, SBI and Adani Enterprises.
Sensex- down 363 Points at 66044
Nifty 50 – down 105 points at 19690
Indian Market
FII AND DII
| FII sold | 1,862.57 Cr |
| DII purchased | 1,532.08 Cr |
Indian Market News
- Asian markets were trading in the negative, with the Hang Seng index losing 1.3% and the Straits Times and Kospi each losing 0.7 percent.
- As Treasury yields increase and investors digest inflation news, Wall Street falls.
- The Sensex and Nifty are expected to open down on negative global signals; the GIFT Nifty is expected to remain flat.
- China Trade Data: Exports were down 6.2 percent in September, while imports were down 6.2 percent year on year.
- Oil prices rise as US sanctions and stockpile predictions boost supply fears.
- Catamaran Venture of Narayana Murthy acquires a 1.12% stake in Gokaldas Exports.
- According to Infosys Net profit increased by 3% year on year in Q2FY24, although revenue forecast was narrowed at the upper end.
- HCLTech’s second-quarter net profit increased 9.92% year on year to Rs 3,833 crore, while revenue increased 8%.
- Retail inflation falls to 5.02% in September, the lowest level in three months.
- In August, industrial growth reached a 14-month high of 10.3%.
Global Market Check
Gift Nifty
The GIFT Nifty, which has gained 14 points, signals a promising beginning for the larger index. After reaching a high of 19,696 points, GIFT Nifty futures were at 19,688 points.
US Markets
Stock futures were little moved on Thursday evening as traders braced for major bank earnings. S&P 500 futures and Dow Jones Industrial Average futures oscillated near the flat line. Nasdaq 100 futures inched higher by 0.07 percent.
All three major indices closed the day’s trading session in the red, with the Dow losing more than 173 points. The S&P 500 sank 0.62 percent, while the tech-heavy Nasdaq Composite lost 0.63 percent.
Even though the three major averages closed Thursday with losses, they are each on pace for weekly gains. The S&P 500 is up 0.9 percent, while the Dow is up about 0.7 percent for the week. The Nasdaq Composite is the outperformer of the three, up 1 percent through Thursday’s closing.
European Markets
European stock markets closed higher Thursday as they built on good global momentum this week. The regional Stoxx 600 index closed 0.1 percent higher, with sectors divided between positive and negative territory.Oil and gas stockpiles gained 1.3 percent even as the International Energy Agency warned of enormous uncertainty in oil markets owing to the Israel-Hamas war. Travel and leisure declined 0.9 percent as various airlines cancelled flights to Israel.
Focus has been on whether the US Federal Reserve may be finished with interest rate hikes after a string of dovish pronouncements from officials, even as the producer price index came in hotter than expected and Fed minutes suggested one more hike may be needed.
Asian Markets
Hong Kong’s Hang Seng index surged 1.86 percent, while China’s benchmark CSI 300 ended 0.95 percent higher at 3,702.38. In Australia, the S&P/ASX 200 climbed 0.21 percent to settle at 7103.1. In Japan, the Nikkei 225 ended 1.75 percent higher at 32,494.66, while South Korea’s Kospi finished up 1.21 percent at 2,479.82. Both benchmarks were at their respective highest closing levels since September 25.
Overnight in the US, all three major indexes closed in the green. The Dow Jones Industrial Average increased 0.19 percent, or 65.57 points, to settle at 33,804.87. The S&P 500 gained 0.43 percent, ending at 4,376.95. The Nasdaq Composite climbed 0.71 percent to settle at 13,659.68. Economists surveyed by Dow Jones are anticipating a 0.3 percent month-over-month increase for the upcoming US inflation report, and a 3.6 percent jump from the prior year.
Oil Prices
Oil prices gained on Thursday, reversing earlier dips, on optimism that U.S. interest rates had peaked, but a weaker demand growth prediction for next year from the International Energy Agency and larger U.S. stocks prevented any gains.
Brent prices jumped by 57 cents, or 0.66 percent, to $86.32 a barrel, while U.S. West Texas Intermediate crude gained 21 cents, or 0.25 percent, to $83.68 a barrel. World markets gained as the dollar and bond market borrowing costs held steady ahead of U.S. inflation data and European Central Bank meeting minutes that will add to the hotly fought argument on where interest rates are going.
Dollar Index
The Dollar index traded 0.06 percent down in futures at 106.49, but the value of one dollar maintained near Rs 83.29.
Gold Prices
Gold prices reversed gains on Thursday as dollar and Treasury yields moved higher after U.S. consumer prices rose more than expected in September and stoked worries that the Federal Reserve could keep rates higher for some time.
Spot gold slipped marginally by 0.1 percent to $1,872.29 per ounce, after achieving its strongest level since Sept. 27 earlier in the session. US gold futures slipped 0.1 percent at $1,885.50. The consumer price index gained 0.4 percent last month after a 0.3 percent gain in August, the Labour Department reported. However, year-on-year consumer prices have fallen down from a peak of 9.1 percent in June 2022.
News updates
RBI likely to conclude evaluating bidders for IDBI Bank by October-end
India’s central bank is poised to hasten a key step of vetting IDBI Bank’s possible purchasers and finish it by October end, helping speed up the sale of a majority share in the lender, two government officials said.
The federal government, which owns 45.48 percent of IDBI Bank, and the state-owned Life Insurance Corp of India, which holds 49.24 percent, jointly seek to sell 60.7 percent of the lender. The Reserve Bank of India (RBI) initiated the vetting process known as ’fit and proper criteria’ in April, after Kotak Mahindra Bank, the Prem Watsa-backed CSB Bank and Emirates NBD presented their initial proposal to purchase a majority share in IDBI Bank.
Infosys Q2 results beat street but weak guidance sends ADRs crashing 7 percent in New York trading
Infosys’ September quarter numbers exceeded expectations, but negatives like narrowing revenue growth guidance and a weak outlook may put the stock under pressure when it opens for trade. New York-listed Infosys ADR shares fell 7% to $16.25. Mehta Equities Senior VP Prashanth Tapse believes revised guidance would put pressure on prices to sustain while maintaining margins. Infosys closed at Rs 1464.55 on BSE, down 2%.
Inflation numbers far below predictions but uncertainty still lingers, say experts
The reduction in India’s headline retail inflation in September 2023 was significantly below market predictions but uncertainty still persists, experts warned. Additionally, experts claimed that the central bank is projected to retain a protracted pause in repo rate in the fiscal year (FY) 2023-24.
“The moderation in core inflation indicates that generalization of price pressures has not taken place. Hence, the Reserve Bank of India (RBI) is projected to continue on lengthy pause in FY24,” said Gaura Sen Gupta, Economist, IDFC First Bank.
Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank remarked, “The CPI inflation moderated more than our forecasts. However, rising crude oil prices and persistence of price pressures on cereals and pulses remains to be monitored for. Overall we expect the MPC to continue in a protracted pause mode at least into mid next year.”
Industrial growth hits 14-month high of 10.3 percent in August
India’s industrial output expanded by 10.3 percent in August, according to figures issued by the Ministry of Statistics and Programme Implementation on October 12. At 10.3 percent, the current industrial growth statistic as per the Index of Industrial Production (IIP) is the highest in 14 months.
It is also significantly above the consensus projection of 9.1 percent. Industrial growth had come in at 5.7 percent in July – now revised to 6.0 percent – and was -0.7 percent in August 2022. For the first five months of 2023-24, India’s industrial output is up 6.1 percent year-on-year, down from 7.7 percent in April-August 2022 when the statistics was bolstered by a positive base effect.
HCLTech’s net personnel addition drops by 2,299 in Q2FY24
HCLTech’s net personnel addition has fallen by 2,299 in the second quarter ended September 30 for the fiscal year 2024, as the company is focusing on boosting utilization rates to sustain operating margin guidance amidst a tough business climate.
Fresher addition for the quarter was at 3,630, up from last quarter’s 1,597. Total headcount stood at 221,139. HCLTech expects to onboard 10,000 freshers in FY24. This is the second consecutive quarter of headcount drop for HCLTech. The company’s personnel in Q1 has reduced by 2,506. The company, however, added 1,597 freshers during Q1. HCLTech’s attrition for Q2 remained at 14.2 percent compared to 16.3 percent reported last quarter. In Q2FY23, attrition stood at 23.8 percent.
Stock in News
Infosys: The second-largest exporter of IT services in India, reported a 4.5 percent sequential increase in net profit for the quarter ended September FY24 at Rs 6,212 crore, with revenue increasing 2.8 percent QoQ to Rs 38,994 crore. Operating results exceeded analysts’ predictions. Constant currency sales growth was 2.3 percent for the quarter, up 2.2 percent QoQ to $4,718 million in dollar terms.
HCL Technologies: The IT services provider outperformed experts’ predictions and increased its net profit for the three months ending in September FY24 by 8.4% to Rs 3,832 crore. When compared to the prior quarter, revenue for the quarter climbed by 1.4 percent sequentially to Rs 26,672 crore, with dollar revenue increasing by 0.8 percent and constant currency revenue increasing by 1 percent.
Dr. Reddy’s Laboratories: Following the conclusion of its product-specific pre-approval inspection at the aforementioned plant, the United States Food & Drug Administration (US FDA) has issued a Form 483 with 9 observations for the company’s manufacturing facility in Bachupally, Hyderabad. The company’s biologics production facility was the subject of a product-specific pre-approval inspection (PAI) by the US health authorities from October 4 to 12.
Maruti Suzuki India: The board of directors will meet on October 17 to discuss the issuance of equity shares of the firm to Suzuki Motor Corporation on a preferential basis, according to Maruti Suzuki India, the largest automaker in the nation. For the purchase of a 100% equity investment in Suzuki Motor Gujarat Private Limited by Suzuki Motor Corporation, equity shares other than cash will be issued as payment.
SJVN: Subsidiary SJVN Green Energy has got a Letter of Award (LOA) from Rajasthan Urja Vikas Nigam (RUVNL) for the building of a 100 MW solar power project at a rate of Rs 2.62 per unit. The construct, own, and operate (BOO) model will be used for the development of the solar project. This project’s development is expected to cost about Rs 600 crore.
IRCON International: IRCON has been given Navratna Status by the Department of Public Enterprise. Among the CPSEs, IRCON will be the 15th Navratna.
One 97 Communications: The Reserve Bank of India (RBI) fined Paytm Payments Bank, a division of mobile payment giant Paytm, Rs 5.39 crore for failing to follow Know Your Customer (KYC) regulations.
InterGlobe Aviation: India’s domestic aviation traffic in September grew 18.3 percent compared to the same month previous year, according per data issued by the Directorate General of Civil Aviation (DGCA). Air traffic surged by 29.1 percent to 11.28 crore passengers in the January–September period compared to last year’s data. IndiGo maintained to top the market with 63.4 percent market share, up 10 bps over August, while SpiceJet’s market share remained steady at 4.4 percent in September MoM.
Angel One: The retail stock brokerage house has produced the highest ever business performance for the quarter ended September FY24, with profit climbing 42.6 percent to Rs 304.5 crore and revenue jumping 40.6 percent to Rs 1,048 crore compared to the year-ago period. The board has declared a second interim dividend of Rs 12.7 per share for the current fiscal.
GMR Airports Infrastructure: The company has registered a 23 percent on-year gain in passenger traffic and a 4 percent reduction on a month-on-month basis at 94.16 lakh for September, while aircraft movements grew by 14 percent YoY and declined 4 percent MoM to 62,230.
Mahindra Lifespace Developers: The Mahindra Group company has bought 5.38 acres of land in Wagholi, Pune. The land is expected to have a development potential of about 1.5 million square feet of saleable area.
IRB Infrastructure Developers: The Mumbai-based infrastructure company has concluded formal agreements with affiliates of GIC as financial investors and STPL. The company will also act as the project manager for STPL to implement the Samakhiyali Santalpur BOT project for Rs 2,092 crore. Samakhiyali Tollway (STPL) was incorporated in March 2023 for the implementation of the project of upgradation to six lanes with paved shoulder of NH-27 from Samakhiyali to Santalpur section in Gujarat on BOT (toll) basis.
Lupin: The pharma major has received tentative approval from the United States Food and Drug Administration (US FDA) for its abbreviated new drug application for Calcium, Magnesium, Potassium, and Sodium Oxybates oral solution to market a generic equivalent of Xywav oral solution from Jazz Pharmaceuticals Ireland in the US. This product will be manufactured at Lupin’s Somerset factory in the US. Lupin is exclusive first-to-file and may be able to acquire a 180-day exclusivity period upon product launch. The net product sales for this oral solution were $958.4 million for the year ending December 2022 and $604.3 million for the first six months of 2023.
Plada Infotech Services: The business process outsourcing (BPO) services company will offer its equity shares on the NSE Emerge on October 13. The issuance price is Rs. 48 per share. Its equity shares will be offered for trading in the trade-for-trade segment.
Panacea Biotec: The United States Food and Drug Administration (US FDA) has performed an inspection of the Baddi plant in Himachal Pradesh of the company’s wholly-owned subsidiary, Panacea Biotec Pharma, between October 3 and October 12. After the abovementioned inspection, the US FDA issued a Form 483 with nine observations that are connected to improvements in existing procedures and are addressed.
Kesoram Industries: The cement company registered a combined net loss of Rs 58.4 crore for the quarter ended September FY24, versus a loss of Rs 59.05 crore in the comparable period last fiscal. Net revenue from operations climbed by 12.8 percent to Rs 953.8 crore compared to the year-ago period.
BGR Energy Systems: The product business section of the company has obtained the single largest order from Mangalore Refinery and Petrochemicals for the provision of air-cooled heat exchangers (ACHE). The contract value is Rs. 112.75 crore.
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