Author: Sandeep Singh

PNB shares hit 52-week high after govt nod for UTI AMC stake sale

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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[wealthdesk shortname=”PNB” isinid=”INE160A01022″ bseid=”532461″ nseid=”PNB” sector=”Banks – Public Sector” exchange=”nse”]

Punjab National Bank (PNB) — India’s third largest state-run lender after SBI and Bank of Baroda — received clearance of the government’s disinvestment department to exit UTI Asset Management Company (AMC) in single or multiple tranches. The news sent the PNB stock to a 52-week high.

PNB shares jumped by as much as Rs 4.9 or 9.5 percent to Rs 50.8 apiece in early deals on BSE. UTI AMC rose by as much as Rs 50.8 or 7.4 percent to Rs 740.2.

The Finance Ministry’s Department of Investment and Public Asset Management (DIPAM) approved the divestment in part or in whole, according to a regulatory filing. The proposed transaction requires nod of regulators including SEBI.

PNB aims to realise the gain from its investment in UTI AMC. The timing of the divestment is yet to be finalised, it said.

As of September 30, Punjab National Bank held a 15.22 percent stake in the AMC, whereas State Bank of India, Bank of Baroda and Life Insurance Corporation (LIC) held 9.98 percent each. The four promoters together held 45.16 percent in UTI AMC, which is the investment manager to UTI Mutual Funds schemes and provides support to the Specified Undertaking of the Unit Trust of India (SUUTI).

UTI Asset Management Company had a turnover of Rs 1,060.3 crore for the year ended March 2022.

PNB shares have rewarded investors with a return of 27.4 percent in the past one month — a period in which the Nifty50 benchmark has gained 4.7 percent.

Catch latest market updates with CNBCTV18.com’s blog

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Sensex drops over 300 pts from day’s high and Nifty50 slips below 18,450 as D-Street enters December F&O series

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian equity benchmarks succumbed to selling pressure following a positive start on Friday, as Dalal Street entered a new monthly derivatives series after finishing the previous one more than four percent higher. Losses in IT, FMCG and consumer durable shares weighed on the market though gains in financial and oil & gas stocks lent some support.

Both headline indices slipped as much as 0.2 percent in the first few minutes of trade after scaling fresh 52-week highs. The Sensex dropped 148.8 points to 62,123.8 at the weakest level of the day so far — retreating 323.9 points from its intraday high. The Nifty50 slid to as low as 18,445.1, down 39 points or 0.2 percent from its previous close.

A total of 29 stocks in the Nifty50 basket struggled below the flatline in early deals. Tata Consumer, HUL, Bajaj Finance, Nestle, PowerGrid, Kotak Mahindra Bank, Asian Paints, Eicher, Britannai and Adani Enterprises — trading around one percent lower each — were the top laggards.

The HDFC twins, HUL and Kotak Mahindra Bank were the biggest drags on both main gauges.

On the other hand, HDFC Life, Larsen & Toubro, Axis Bank, Apollo Hospitals, Coal India, Bharat Petroleum, IndusInd, NTPC, ONGC and Maruti Suzuki — rising around 1-2 percent — were among the blue-chip stocks that rose the most.

The Nifty Bank — which has SBI, HDFC Bank, Kotak Mahindra Bank, ICICI Bank and Axis Bank among its 12 member stocks — gained as much as 0.6 percent to an all-time high of 43,339.2 during the session.

“Many favourable factors have come together to push the market to record levels: the FOMC minutes indicating smaller rate increases, the sharp correction in crude oil, FIIs turning buyers, reports of impressive credit growth and capex revival, and even the bad news of record COVID spread in China is turning out to be good news for India since it will accelerate the China Plus One policy,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Brent crude was steady at $85 a barrel, having retreated almost 39 percent from a peak in March. Lower oil prices are beneficial for India, which meets the lion’s share of its petroleum requirement through imports.

Overall market breadth was in favour of the bulls, as 1,911 stocks rose and 1,016 fell in morning trade on BSE.

Globally, concerns remained on the impact of steep hikes in COVID-era interest rates on economic growth.

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Stock Market Highlights: Sensex and Nifty50 end higher led by Reliance, Tata Motors and HDFC Life

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Stock Market Highlights: Indian equity benchmarks BSE Sensex and NSE Nifty50 ended choppy session in the green on the first trading session of the December F&O series. The headline indices slipped into the red after opening with minor gains amid mixed moves across global markets as investors assessed the future course of interest rates. Both headline indices finished the November series more than four percent higher the previous day.

Catch highlights of the November 25 session here:

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Trade setup for Nov 25: Nifty50 poised for higher levels as D-Street enters December F&O series

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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He sees lower-end support for the index at 42,600. “Broader participation will resume in the market.”

Foreign institutional investors (FIIs) returned to net buying of Indian shares on Thursday after four days of selling, according to provisional exchange data.

A total of 21 stocks in the BSE 500 universe — the broadest index on the bourse — touched the milestone on Thursday:

52-week lows

On the other hand, nine stocks hit 52-week lows:

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Gurugram-based tyre giant is relying on ultra-high performance market for better margin ahead

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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[wealthdesk shortname=”Apollo Tyres” isinid=”INE438A01022″ bseid=”500877″ nseid=”APOLLOTYRE” sector=”Tyres” exchange=”bse”]

Gurugram-based Apollo Tyres — one of the country’s major makers of tyres and second only to MRF in sales — is optimistic on sustained growth in its ultra-high performance business. Its performing well in the segment, where its share has risen to 42 percent, Apollo Tyres Vice Chairman and MD Neeraj Kanwar told CNBC-TV18.

“That’s really good for the company because it does expand our profit… The focus on ultra high performance tyres is giving us very good growth,” he said. 

His remarks come at a time when the prices of key materials used in the tyre industry have eased after peaking out earlier this year. Rubber and crude oil are two main inputs used for the making of tyres.

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Kanwar said Apollo Tyres saw healthy growth in the July-September period, with revenue growth coming in at 17 percent.

Earlier this month, Apollo Tyres reported a rise of 11.9 percent in net profit to Rs 194.4 crore for the three-month period compared with the corresponding quarter a year ago. Its revenue increased to Rs 5,956 crore — up 17.3 percent on a year-on-year basis.

Both profit and revenue far exceeded Street expectations. Analysts in a CNBC-TV18 poll had pegged the company’s quarterly net profit at Rs 159 crore and revenue at Rs 5,749 crore.

Apollo Tyres’ margin — or the degree to which a business makes money — came in at 12 percent, better than the analysts’ estimate by 70 basis points.

He said the company’s volumes in Europe increased nine percent, and its growth of 14 percent in passenger cars was on account of:

• R&D efforts
• Focus on ultra-high performance tyres

While growth in the India business has aided the profitability for Apollo Tyres, the company is focused on improving its product mix to sustain its pricing policy.  “I’m happy to say that we’ve also had a margin expansion in India… We’ve been holding up on our prices while our truck volumes have gone down. Today, our mantra is very clear on profitable growth,” he said.

Kanwar also said the launch of its Vredestein brand in India is receiving a good response. Apollo Tyres announced the launch of premium European brand Vredestein in India last month.

Apollo Tyres have largely remained flat in the past one month — a period in which the Nifty50 benchmark has risen 4.2 percent.

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Sensex and Nifty50 clock record closing highs aided by financial and IT shares — rupee gains to 81.63 vs dollar

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian equity benchmarks soared to record closing highs on Thursday, finishing the November derivatives (F&O) series more than four percent higher, led by broad-based buying. Dalal Street tracked gains across major markets around the globe after minutes of the Fed’s last policy meeting suggested a slowing pace of hikes in COVID-era interest rates soon.

Both headline indices surged around 1.5 percent in the final hour of the session. The Sensex jumped 901.8 points to touch an all-time high of 62,412.3 in intraday trade, and the Nifty50 climbed to as high as 18,529.7, up 262.5 points from its previous close — coming within 75 points of its record high.

As many as 44 stocks in the Nifty50 basket strengthened for the day. Apollo Hospitals, HDFC Life, Bharat Petroleum, Infosys, Tata Consumer Products, HCL Tech, PowerGrid, Wipro, Tech Mahindra and TCS — ending between 2.3 percent and 4.6 percent — were the top gainers.

Infosys, the HDFC twins, ICICI Bank and TCS were the biggest boosts for both main gauges.

The Nifty Bank — whose 12 constituents are 12 major lenders of the country — gained as much as one percent to a record 43,163.4 during the session.

“Investors cheered the latest FOMC meeting minutes that hinted that the rate hike cycle may be slowing down. Optimism was further boosted by falling crude prices, over talk of a possible price cap on Russian oil and a rise in US stockpiles, and the declining dollar index,” said Vinod Nair, Head of Research at Geojit Financial Services.

Overall market breadth favoured the bulls, as 1,935 stocks rose and 1,570 fell at the close on BSE.

The rupee appreciated 0.3 percent to end at 81.63 against the US dollar.

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Fed minutes hint at a slower pace of rate hikes. Here’s what’s in it for India

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Minutes of the Fed’s latest policy meeting suggest the US central bank may soon ease the pace of hikes in COVID-era interest rates, sending positive signals to global markets. Investors worldwide have waited eagerly for any sign of some moderation, if not an early end, to the current cycle of rate hikes.

“A substantial majority of participants judged that a slowing in the pace of increase would soon be appropriate,” said the November 1-2 meeting minutes of the Fed’s rate-deciding panel.

The minutes come when major central banks rapidly increase rates just as much to tame inflation without hampering economic growth amid warnings of at least a mild global recession. While inflation is at a 40-year high in the US, in India, it has remained above the upper end of the RBI’s comfort zone for three quarters in a row.

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What to make of the latest minutes?

Fed officials leaned towards a 50 bps increase next month — following four back-to-back hikes of 75 bps each on top of a cumulative 75-bps raise in March-May, concluding that some moderation should help minimise the risk of over-tightening.

Though Fed officials acknowledged signs of inflation abating, some expressed concern about risks to the financial system should the Fed continue with its current pace of policy tightening.

The post-COVID hikes in the world’s largest economy mark the US central bank’s most aggressive tightening drive since the 1980s to counter uncomfortably high inflation.

Many analysts believe concerns about a demand slowdown owing to a record addition in daily COVID infections in China and the consequent lockdowns may also build a case for easier rate hikes. Most of them see the US interest rates peak around five percent by the middle of 2023. 

“Rising COVID cases in China will certainly impact global growth in 2023. Therefore central banks of major economies will have to slow down rate hikes to prevent a global recession,” VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, told CNBCTV18.com.

What’s in it for emerging markets like India?

Experts have pinned hopes on India’s relative resilience to other emerging markets, drawing optimism from macroeconomic indicators on critical areas such as manufacturing and bank credit growth.

Global economic activity is undergoing a sharper-than-expected slowdown, with higher inflation in developed countries than their emerging market counterparts, SBI Chairman Dinesh Kumar Khara told CNBC-TV18.

“Financial conditions in most of the regions have got tightened. Russia’s invasion of Ukraine and the lingering COVID-19 pandemic weigh heavily on the outlook. However, in such an uncertain and fragile global economic environment, the Indian economy has shown its resilience all these years,” the SBI chief said.

Morgan Stanley expects GDP growth in Asia to improve by 4.6 percent in the second half of 2023, from 3.5 percent currently, he said.

Some say easing crude oil prices — owing to the recent slump amid concerns about falling demand in China, the world’s second-largest oil consumer — support economies like India, which meets the lion’s share of its oil demand through imports.

India’s capex cycle has begun, and the economy should grow by 6.2% next year & 6.5% in FY25, says @MorganStanley’s Chetan Ahya. He tells @latha_venkatesh that he expects a small rate cut from RBI by the end-2023 1/2 pic.twitter.com/nCJb1QpAy5

— CNBC-TV18 (@CNBCTV18News) November 17, 2022

“Many of the risk factors for India appear to be subsiding, especially with crude oil cooling off, which is a big positive for Indian banks… A pause will follow an expected reduction in the pace of (rate) hikes, but positive for global markets,” AK Prabhakar, Head of Research at IDBI Capital Markets, told CNBCTV18.com.

“One can expect huge capex in the Budget with more spending on infrastructure and defence, which is an opportunity in the Indian market,” he said.

Catch the latest market updates with CNBCTV18.com’s blog

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Nifty50 back above 18,300 led by financial, IT and FMCG shares as November F&O series draws to a close

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Indian equity benchmarks began the last trading session of the November futures & option (F&O) series in the green, led by gains in financial, IT and FMCG shares, mirroring strength across global markets after Fed minutes hinted at less aggressive hikes in benchmark interest rates soon.

Both benchmark indices rose as much as 0.3 percent in the first few minutes of trade. The Sensex gained 194 points to touch 61,704.6 at the strongest level of the day so far, and the Nifty50 climbed to as high as 18,327, up 59.8 points from its previous close.

Barring four stocks, ITC, ONGC, ICICI Bank and Adani Ports, which were flat, all of the Nifty50’s constituents began the day in the green.

Reliance, Bharti Airtel, HDFC, HDFC Bank and Infosys were the biggest boosts for both main gauges. Gains across sectors backed the upmove in the market.

“The US market construct of rising equity, falling bond yields and a falling dollar continues to favour the bulls. Additionally, for India, steadily falling crude oil prices are another positive… In India, macroeconomic news confirms the resilience of the economy with investment gaining momentum,” said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Overall market breadth favoured the bulls, as 928 stocks rose and 538 fell in early deals on BSE.

The rupee inched higher to 81.72 against the US dollar.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow