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Indian equity indices closed lower in a choppy week as investors were cautious amid the ongoing Ukraine-Russia conflict and sustained selling by FIIs. The benchmark indices opened gap down on Monday but recovered to close higher at the end of the week on Friday. However, it ended lower than last week’s (Feb 11, 2022) closing number. For the week, the Sensex closed 0.55% lower at 57,832.97 and the Nifty ended 0.57% lower at 17,276.30.
India VIX, a metric for measuring expected volatility in the equity market, jumped 18.7%.
FIIs continued to sell their holdings in the cash segment. FIIs sold for Rs 12,215.6 crore during the week. DIIs were net buyers and they bought for Rs 10,592.2 crore in the week.
The selling was broad-based as no sectoral indices had a significant increase during the week. Only, S&P BSE Energy index rose 1.1% and BSE Consumer Durables index increased marginally by 0.6%.
Economy News
India’s benchmark inflation rate, measured by the Consumer Price Index (CPI) rose to a seven-month high of 6.01 per cent on a yearly basis in January 2022, data released by the Ministry of Statistics and Programme Implementation showed. The CPI-based retail inflation was 4.06 percent in January 2021 and 5.66 per cent in December 2021. The RBI has forecast that CPI inflation will average 5.7 percent in the first quarter of 2022.
Meanwhile, inflation based on Wholesale Price Index (WPI) remained at double digits in January for the 10th month in a row, as firms struggle with rising input costs. Wholesale prices in January 2022 rose 12.96% from the year-ago period, but was less than December’s 13.56% and November’s 14.87% rise in 2021, government data showed.
To read more on latest inflation data, click here
Company News
Reliance Industries Ltd (RIL): The company’s telecom arm Jio has announced its foray in satellite-based broadband communication with a tie up with Luxembourg-based firm SES. The two companies will form a joint venture with Jio Platforms Ltd and SES owning 51 per cent and 49 per cent stake, respectively.
In a separate news, the energy conglomerate deferred shutdown of its oil-refining unit at its Jamnagar complex in Gujarat to capitalise on high fuel margins, reported Bloomberg news. The shutdown was initially scheduled for three weeks in March. However, maintenance works have been postponed to September.
Meanwhile, RIL lists its existing foreign currency bonds aggregating over $7 billion on India INX, the largest such listing by a private entity in India INX and GIFT IFSC. This includes the $4 billion jumbo bonds raised recently in January 2022, which was termed as the largest ever foreign currency bond issuance by an Indian entity.
InterGlobe Aviation (IndiGo): The company’s co-promoter Rakesh Gangwal on Friday resigned from the board of directors of the parent company, InterGlobe Aviation. Gangwal said that he would be gradually reducing his equity stake in the company over the next five years. Gangwal and his associates own 36.61% in InterGlobe.
Separately, the airline will seek shareholders’ approval for appointment of co-founder Rahul Bhatia as the Managing Director as well as for availing advisory services from Non-Executive Director Gregg Albert Saretsky. The remote e-voting process for the shareholders will be open from February 17 till March 18, according to a regulatory filing. The results of the postal ballot will be declared on or before March 20.
SpiceJet Ltd: Kalanithi Maran and KAL Airways informed the Supreme Court that SpiceJet’s offer of Rs 600 crore towards full and final settlement of the share transfer dispute was not acceptable. Maran told the top court that the dues to their side comes up to Rs 900 crore.
In other news, the airline posted a consolidated net profit of Rs 42.45 crore in Q3FY22 compared with a net loss of Rs 66.77 crore in the year-ago period. Total revenue from operations stood at Rs 2,262.65 crore as against Rs 1,691.64 crore in the corresponding period last fiscal.
Future Retail: The company’s lenders have permitted Future Retail to make interest payments of over Rs 100 crore (about $ 14 million) on the foreign currency denominated bonds. It has already missed repayment due last month and the 30-grace period ends early next week.
Indian Oil Corporation (IOC): The oil marketing company raised Rs 1,500 crore debt through a bonds issue at a coupon rate lower than government bonds. IOC priced its five-year rupee bonds at a coupon rate of 6.14 per cent tighter than a similar maturing government bond that is trading at an annualised yield of 6.29 per cent. IOC Director (Finance) Sandeep Gupta said that the money raised is for general corporate purposes.
Adani Wilmar: The company reported 66% jump in consolidated net profit at Rs 211 crore for the quarter ending December 2021, as against a net profit of Rs 127 crore in the year-ago period. The company’s consolidated revenue from operations rose 40% to Rs 14,379 crore in Q3FY22, as compared to Rs 10,229 crore in Q3FY21.
Ashok Leyland: The truck maker is expecting a strong comeback in the commercial vehicle segment this year as it looks to consolidate its position in the intermediate commercial vehicle (ICV) segment and reap benefits of enhanced demand for its modular AVTR range. The company is also betting on overall improvement in the economic situation and a gradual easing of supply chain issues to cross 30 per cent market share in the commercial vehicle (CV) segment in FY23.
Nestle India: The food and drink processing company posted revenues at Rs 3,739 crore in Oct-Dec 2021 quarter, up 9% YoY from Rs 3,432.5 crore in the year-ago period. Its net profit fell 20% to Rs 387 crore in the reported quarter from Rs 483 crore in the corresponding quarter last fiscal. EBITDA was up 11% at Rs 865.6 crore in the quarter, compared with Rs 776.9 crore in the year-ago period.
Hero MotoCorp: The Delhi High Court has formed an arbitral tribunal in a dispute between Hero Electric and Hero MotoCorp. The court has formed a arbitration panel of three retired judges — Indu Malhotra, Deepak Mishra and Indermeet Kaur — to decide on whether Hero Electric has exclusive rights to use the Hero trademark for its electric vehicles.
Wipro: The IT major has won a deal worth $150 million to drive transformation for ABB’s Information Systems digital workplace services. The agreement, which is for five years, will help ABB’s Information Systems deliver enhanced, consumer-grade digital experiences for its 105,000 employees in over 100 countries.
Vedant Fashions (Manyavar): The company had a good stock market debut with shares of the company getting listed at Rs 935 per share on NSE, an 8 per cent premium over its issue price of Rs 866 per share. However, the company shares closed at Rs 933.55 apiece, which is below its opening price. The brokerage firm Nomura also hiked price target for the sewage and water treatment solutions provider on securing new orders, higher operating margin and debt reduction.
Axis Bank and Zee Learn Ltd: Zee Learn received a communication from Axis Bank, for invocation of corporate guarantee of Rs 91.62 crore granted in favour of Digital Ventures Pvt on Sept. 25, 2014. Zee Learn has been asked to pay the said amount within seven days from the receipt of the letter. Learn is evaluating necessary steps for further action.
FSN E-Commerce Ventures (Nykaa): The company’s institutional investors have rejected proposed changes to the company’s Articles of Association (AoA) that sought to give special rights to promoters to nominate one-third of the directors and the chairperson of the board irrespective of their shareholding. The institutional investors include mutual funds, insurance companies and foreign portfolio investors.
Global Markets
Benchmark indices fell for the second consecutive week due to concerns over a Russian invasion of Ukraine and high inflation. Shares of Meta Platforms continued its downward spiral and closed 6.1% lower for the week.
There was also contradictory comments from various American policymakers. While, St. Louis Fed President James Bullard said there may be a full percentage point increase of federal funds rate by July, the minutes from the Fed’s latest meeting released on Wednesday was generally perceived as dovish.
For the week, the S&P 500 was down 1.58%, the Dow lost 1.90%, the Nasdaq fell 1.76%.
In Asian markets, Chinese equity indices closed higher as positive comments from government officials and lower-than-expected inflation data boosted investors’ optimism.
China’s inflation for January based on consumer price index rose 0.9% as compared with the year-ago period. Chinese producer inflation for January rose 9.1% as compared with a year earlier.
For the week, the Shanghai Composite Index added 0.8% and the CSI 300 Index gained 1.1%.
Japan’s stock markets closed lower for the week, as geopolitical tensions in Europe and fears of more aggressive monetary policy tightening by the Fed weighed on overall market optimism. The Nikkei 225 index fell 2.07% and the broader TOPIX index was down 1.95%.
Meanwhile, Japan’s economy expanded 5.4% on an annualized basis in the final quarter of 2021, according to government data. Japan’s January exports numbers were below expectations as official data released on Thursday showed only a 9.6% year-on-year rise for that month.