Weekly Market Analysis: Sensex, Nifty gain on positive economic data; RIL, Kotak Mahindra Bank, Asian Paints in focus

Benchmark Indian indices closed higher on a weekly basis as a slew of positive economic data lifted investors’ sentiments. However, the threat of Omicron variant of the coronavirus and consistent selling by Foreign Institutional Investors capped gains.

For the week, the Sensex rose 1.03% to close at 57696.46 and the Nifty closed 1% higher 17196.70.

Among various sectoral indices, the gainers for the week were Nifty IT [3.6%], BSE Consumer Durables [2.8%], BSE Industrials [2.1%], BSE Capital Goods [1.9%] and Nifty Metal [1.3%]. Top losers were Nifty Pharma [-2.6%], BSE Healthcare [-1.9%], Nifty Energy [-0.4%], BSE Utilities [-0.4%] and Nifty FMCG [-0.1%].

Top gainers on a weekly basis in Nifty 50 were TCS [-0.1%], HCL Tech [-1.1%], IndusInd Bank [5.5%], Bajaj Finserv [4.8%] and Tata Motors [4.3%]. Top losers were Cipla [-5.7%], Divi’s Laboratories [-3.7%], Dr.Reddy’s Labs [-3.3%], Aitel [-2.85], Hero MotoCorp [-2.7%].

In the cash segment, Foreign Institutional Investors sold for Rs 15809.1 crore and Domestic Institutional Investors bought for Rs 16450 crore.

Economy News

The country’s GDP rose 8.4% year-on-year in the second quarter of fiscal year 2022. Gross Value Added, also known as GVA, rose 8.5%. Agriculture, Forestry & Fishing rose 4.5%, Manufacturing was up 5.5% while, Trade, Hotels, Transport, Communication & Services related Broadcasting gained 8.2% and Financial, Real Estate & Professional Services was up 7.8% in the second quarter.

The combined Index of Eight Core Industries stood at 136.2 in October 2021, a rise of 7.5% compared with October 2020 figure. The growth rate of the Index for July 2021 is revised to 9.9% from its provisional level 9.4%.

The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) increased to 57.6 in November from 55.9 in October, indicating a healthy improvement of the sector. This was higher than long-run average of 53.6.

The seasonally adjusted IHS Markit India Services Purchasing Managers’ Index was fractionally lower at 58.1 in November, from 58.4 in October.

To read more on the latest economic data, click here

Company News

Reliance Industries Ltd: The oil-to-telecom conglomerate issued a clarification and categorically denied a news report which said that the company is considering an offer for British telecom company BT Group Plc. The Economic Times reported that Reliance might make an unsolicited offer to buy into BT Group or will try to get a controlling share in it, according to unnamed sources familiar with the matter.

Kotak Mahindra Bank: The Reserve Bank of India has granted its approval to LIC to increase its holding in the lender up to 9.99% % of the paid up equity share capital of the bank. The approval is valid for a period of one year.

Asian Paints: The company will invest Rs 960 crore to expand its production capacity of its facility located at Ankleshwar in Gujarat. The manufacturing facility of paint will be increased to 2.5 lakh KL and resins and emulsions to 85,000 MT. The expansion is expected to be completed in the next 2-3 years.

Larsen & Toubro [L&T]: The company has signed a partnership agreement with ReNew Power (ReNew) to tap the emerging green hydrogen business in India. Both the companies will jointly develop, own, execute and operate green hydrogen projects across the country.

Tata Power: The company received received a Letter of award [LoA] from Solar Energy Corporation of Inmdia Ltd. to build 100 MW EPC Solar Project. The total contract value of the project is approximately Rs 945 crore and it is expected to be completed within 18 months.

Adani Ports and Special Economic Zone [APSEZ]: The company in an exchange filing has expressed its disappointment on MSCI’s decision to drop the company from some of its Climate Change indices. However, the company said it will stay completely open to engaging with their investors and with MSCI to ensure complete alignment on the sustainability agenda.

Dish TV and Airtel: Dish TV rejected media reports suggesting telecom operator Airtel is in early talks to pick up a majority stake in it. Dish TV said in a regulatory filing that it was not aware of the transaction. According to the news report, Airtel is looking to buy 5.93% stake from Dish TV’s promoter group and 25.63% stake owned by YES Bank Ltd.

Maruti Suzuki: The carmaker said that it is planning to increase vehicle prices from January 2022 to offset the impact of rise in various input costs. The price increase would vary from model to model, the auto major said, without sharing the details.

Jet Airways: The airline is in talks with Boeing, Airbus for $12 billion order, according to Bloomberg news report. Jet Airways is expected to to buy at least 100 narrowbody aircrafts, said new owners Murari Lal Jalan and Kalrock Capital. The group will invest around $200 million via equity and debt in the airline over the next six months.

Paytm: The company’s CEO said that it is expecting to increase revenue and monetisation methods on its platform in the next few quarters. He said that the company is witnessing scale in system deployment and non-UPI revenue, where merchant gives revenue charges, MDR (merchants discount rate) for payments and credit led financial service.

Nykaa [FSN E-Commerce Ventures]: Indian cosmetics-to-fashion retailer is planning to more than triple its offline stores to 300, according to founder and Chief Executive Falguni Nayar, Reuters reported. Nayar said the company was targeting 100 cities.

Global News

The US markets retreated for the week as investors and traders were concerned over the news that the Federal Reserve would accelerate tapering of its monthly bond purchase and faster spread of Omicron variant of the virus. For the week, the S&P 500 fell 1.22%, the Dow was down 0.92% and the Nasdaq plunged 2.62%.

Japan’s stock markets fell for the week, as investors’ sentiments were dampened because the country decided to close its borders to foreign nationals due to the spread of Omicron variant of the coronavirus. The Nikkei 225 index fell 2.51% and the broader Topix index was down 1.37%.

Chinese stock indices recorded a weekly gain after data showed the country’s factory activity improved in November as raw material prices fell and electricity rationing lessened. The official manufacturing Purchasing Manager’s Index (PMI) increased to 50.1 in November, up from 49.2 in October, data from its statistics agency showed. China’s CSI 300 index gained 0.84% and Shangahia Composite index climbed 1.22%. 

Further, trade tensions between China and the US resurfaced after ride-hailing app Didi announced that it would de-list from New York Stock Exchange.