Weekly Market Analysis: Benchmark equity indices snap 4-week losing trend; RIL, TCS, L&T and Vodafone Idea in news

Benchmark indices snapped four weeks of losing trend and registered strong gains during a volatile week as investors looked for bargain buying. The Sensex rose 2.24% and the Nifty jumped 2.37% on a weekly basis.

For the week, top gainers among Nifty sector indices were Media [6.7%], Pharma [6.3%], IT [3.4%], Realty [3.3%], PSU Bank [3.02%]. All sector indices in BSE and NSE closed in the green.

FIIs sold heavily during the week in the cash segment. For the week, FIIs were net sellers for Rs 24,688.5 crore and DIIs were net buyers for Rs 17,729 crore.

Brent Crude was trading $112.67 per barrel and WTI Crude (the US Crude) was trading at $109.33 per barrel.

Company News

Reliance Industries Ltd: Shareholders of the company voted to transfer its gasification operations into a wholly owned unit, Reliance Syngas, the company said in an exchange filling. The Scheme of Arrangement between Reliance Industries, its shareholders, creditors and Reliance Syngas was placed before the stakeholders for approval. Shareholders voted in favor of the arrangement with 99% of votes.

Meanwhile, the company’s Jamnagar facility is lifting crude processing and deferring planned maintenance to take advantage of surging demand for diesel, according to people with direct knowledge of the matter, Bloomberg reported. It’s already sending fuel shipments to Europe, and this will increase in the coming months, said the sources.

Tata Consultancy Services (TCS): The IT major is planning to revamp the organisation structure to align with customers more closely, as it aims to achieve USD 50 billion revenue by 2030, a source aware of the development said, according to PTI. With this new structure, TCS plans to focus on the customer journey, starting from acquisition incubation, growth and transformation.

Meanwhile, TCS has begun buying back its shares from March 9 and the buyback will run till March 23. The 14-day long buyback offer is priced at Rs 4,500 per equity share.

Larsen & Toubro (L&T): The company announced that its construction arm has secured ‘significant’ orders for its various businesses. The company classifies orders worth Rs 1,000-2,500 crore as significant. The company has secured an engineering, procurement and construction (EPC) order from IRCON International Ltd. It has also secured an order from a global FMCG manufacturer for design and construction of a food processing facility in Gujarat, India. In addition, the business has also secured an order to expand a super specialty hospital in Kolkata by 250 beds on design & build basis.

In other news, the company’s heavy civil infrastructure business vertical of its construction arm won a ‘significant’ order from Delhi Metro Rail Corporation. The contract is to design and construct Underground Metro Project of Phase IV of Delhi MRTS. L&T classified orders worth between Rs 1,000 crore and Rs 2,500 crore as ‘significant’ orders.

L&T announced the launch of L&T SuFin, an integrated e-commerce platform for B2B industrial products and services. According to the company, the B2B e-commerce platform is expected to empower businesses, especially MSMEs, to enable them source their industrial supplies pan India, digitally and cost-effectively.

Vodafone Idea Ltd: Promoter Vodafone plans to infuse up to Rs 3,375 crore into debt-ridden Vodafone Idea Ltd as part of the company’s proposed raising of funds worth Rs 14,200 crore. Aditya Birla Group also plans to pump in up to Rs 1,125 crore, according to a regulatory filing. The telecom operator will seek shareholders’ approval for raising up to Rs 14,500 crore as well as increase its authorised share capital to Rs 75,000 crore at its the Extraordinary General Meeting (EGM) to be held on March 26.

Future Group companies: Future Lifestyle Fashions has received termination notices for sub-leased properties from Reliance entities in relation to 34 “Central” stores and 78 “Brand Factory” stores of the company. These stores have been historically contributing approx. 55% to 65% of retail revenue operations of the company. Similarly, Future Retail stores have been served notices to terminate the lease of its 835 stores.

Titan Ltd: The company has invested $20 million in Great Heights, a Delaware-based company that owns lab-created diamonds brand ‘Clean Origin’. Titan will get 17.5% voting rights in Great Heights through the investment. Titan says it will get a “ring-side view of the fast-growing lab grown diamond and direct to consumer sectors through the investment.

Bharti Airtel and Axis Bank: The two companies announced their strategic deal to strengthen India’s digital ecosystem through a range of financial solutions. Airtel and Axis Bank launched ‘Airtel Axis Bank Credit Card’. The two firms plan to bring several financial offerings and digital services for Airtel’s 34 crore customers, including co-branded credit card with pre-approved instant loans, BNPL offerings. The partnership is expected to improve penetration in tier-2 and tier-3 markets and enhance adoption to digital payments.

Meanwhile, Airtel has entered into an agreement resulting into acquisition of aggregate 9 per cent equity stake in Avaada CleanTN Project, a special purpose vehicle formed for the purpose of owning and operating the Captive Power Plant.

Exide Industries: The battery manufacturer has entered into a long-term technical collaboration agreement with China’s SVOLT Energy Technology Co Ltd for lithium-ion cell manufacturing. Under the agreement, SVOLT will grant Exide an irrevocable right and licence to use, exploit and commercialise necessary technology and know-how owned by SVOLT for lithium-ion cell manufacturing in India.

Economy News

Data showed Index of Industrial Production (IIP) for the month of January 2022 grew by 1.3% on an annual basis, compared with 0.7% annual growth in December 2021. IIP during the the Apr-Jan period grew by 13.7% on an annual basis.

Global Markets

In the US markets, stocks moved lower for another week amid huge volatility due to the Russian invasion of Ukraine. The Nasdaq fell more than 20% from its recent peak, hinting that the Nasdaq Composite index has moved into bear market. For the week, Nasdaq tanked 3.53%, the Dow lost 1.99%, the S&P 500 plunged 2.88%.

Major consumer staples shares like Coca-Cola, PepsiCo, etc., fell as the companies announced that they were suspending business operation in Russia. During the week, oil prices shot up to $139 per barrel due to the ongoing war in Europe and rising prices of other commodities weighed on market sentiments.

A couple of economic data was released in the US. The consumer price index rose 0.8% month-on-month and 7.9% year-on-year in February. Weekly jobless claims came in slightly above expectations, at 227,000, but remained at low levels.

Japan’s stock markets declined over the week, as the Russia-Ukraine conflict worsened continuing to dent investors’ risk appetite and due to soaring global commodity prices. The Nikkei 225 index fell 3.17%, and the broader Topix index shed 2.46%.

Chinese markets also posted a weekly loss, mirroring global markets, amid a resurgence in COVID-19 outbreaks and the war in Ukraine, which weighed on industrial metals and agricultural commodities. Shanghai Composite index plunged 3.98% and the blue-chip CSI 300 Index slumped 4.21%. Hang Seng index tanked 6.17% on a weekly basis.

China on Friday imposed fresh lockdown on 9 million (90 lakh) residents in the northeastern industrial centre of Changchun after a new COVID-19 outbreak.