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Benchmark indices closed with minor gains as the RBI kept interest rates unchanged at 6.5%, in line with expectations. IT stocks witnessed significant losses on a weekly basis that weighed on the Sensex and the Nifty. For the week, the Sensex gained 0.13% to close at 62,625.63. The Nifty 50 index added 0.16% to close at 18,563.40.
Broader markets outperformed headline indices. The BSE Midcap index advanced 0.82% to close at 27,518.19. The BSE Smallcap index rose 1.64% to close at 31,391.99.
Top losers among Nifty sectoral indices were IT [-3.32%], PSU Bank [-1.41%], FMCG [-1.2%], Media [-1.18%], and Pharma [-0.31%]. Top gainers were Auto [1.65%], Energy [1.61%], Realty [1.55%], Metal [1.4%], and Private Bank [0.49%].
For the week, FIIs were net sellers for Rs 18,177.4 crore, while DIIs were net buyers for Rs 1,949 crore in the cash segment.
Company News
State Bank of India (SBI): The largest lender in India said that it will raise up to Rs 50,000 crore through debt instruments from Indian as well as overseas markets in the current fiscal. SBI board has given the approval for raising funds in INR or any other convertible currency by issue of debt instruments including Long Term Bonds, Basel III compliant Additional Tier 1 Bonds, Basel III compliant Tier 2 Bonds, up to an amount of Rs 50,000 crore through private placement mode to Indian and/or Overseas investors during FY24, according to its exchange filing.
Adani Group: The group said that it has repaid loans aggregating $2.65 billion to complete a prepayment programme to cut overall leverage. In a credit note, Adani Group said that it has made a full prepayment of $2.15 billion of loans that were taken by pledging shares in the group’s listed firms and also another $700 million in loans taken for the acquisition of Ambuja Cement. “The prepayment was done along with interest payment of $203 million,” the Adani Group said.
Bajaj Finserv: The financial services company launched its new mutual fund business under Bajaj Finserv Mutual Fund. Bajaj Finserv Mutual Fund will launch a comprehensive set of products across fixed income, hybrid and equity categories to meet the needs of diverse investor profiles ranging from retail and high net worth individual (HNIs) to institutions. To begin, the company will launch a set of fixed income, liquid, overnight and money market products to cater to the institutional segment and company treasuries.
One 97 Communications (Paytm): The fintech company said that its lending business witnessed a 169% YoY growth in disbursement to Rs 9,618 crore ($1.2 billion) for April and May 2023. It had disbursed 85 lakh loans worth Rs 9,618 crore in April and May. Paytm said that its loan distribution business in partnership with large lenders continues to witness robust growth with total disbursements through our platform. Merchant payment volumes (GMV) in the said period was at Rs 2.65 lakh crore ($32.1 billion), year-on-year growth of 35%.
Larsen & Toubro (L&T): The infrastructure behemoth said that the Buildings and Factories (B&F) Business of L&T Construction has secured ‘significant’ EPC orders in India. According to L&T’s classification, the value of the said contract lies between Rs 1,000 crore to 2,500 crore. The company has secured orders from a developer to construct commercial towers at two locations in Mumbai.
The contract includes construction of tallest commercial building in India of 300.05 meter in height which includes four-level basements and 2 towers of 70 floors & 50 floors respectively with combined BUA of 3.4 million square feet (sq ft). The towers are to be done in 40 months. Further, the contract also entails construction of large commercial building of 5.1 million sq ft which includes four-level basements and 2 towers of 19 floors each with combined BUA of 5.1 million sqf.t. The construction of towers is expected to be completed within 35 months.
SBI Cards and Payment Services: The company said its board has approved the fundraising of up to Rs 3,000 crore via the issuance of non-convertible debentures (NCDs). The fundraising will take place in one or more tranches, on a private placement basis.
Indian Energy Exchange (IEX): Shares of the company tanked 15% in intraday trade on NSE, following media reports that the Power Ministry of India has directed CERC to initiate the process of market coupling. The proposed changes could potentially erode IEX’s competitive edge by reducing its trading volumes. Shares of the company closed 10.15% lower at Rs 122.6 apiece.
Spicejet: The company said that it will partner with FTAI Aviation to restore fleet under CFM56 revitalization program. FTAI Aviation is a leading aftermarket provider of engine services, and under this program, FTAI Aviation will provide SpiceJet with up to 20 engines for lease, inclusive of maintenance services. With FTAI Aviation managing the engines, SpiceJet will strengthen its resource allocation and focus on delivering an exceptional travel experience while maximizing their operational potential.
HCL Technologies: The company said that it has launched a test lab in Chennai (India) to enable global telecom infrastructure original equipment manufacturers (OEMs) to test and validate 5G solutions. The facility is equipped with high-end scanners that enable global OEMs to test large cellular base stations as well as small form factor antennas used in mobile phones, smart gadgets, health monitoring systems and remote surveillance systems.
Tata Consultancy Services (TCS): The IT behemoth launched data exchange and marketplace platform — Dexam — on Google Cloud. Dexam is a software-as-a-service product that enables data exchange across enterprises and ecosystems.
Embassy Office Parks REIT: The company announced that it has raised Rs 1,050 crore non-convertible debentures (NCDs) at 7.77% coupon rate. Embassy REIT will utilize the proceeds to refinance bank loans, which are due for an interest reset in the coming months. The NCDs will be listed on the wholesale debt market of Bombay Stock Exchange (BSE). The rating agency CRISIL has assigned “AAA/Stable” rating to these debentures.
Suzlon Energy: The renewable energy company said in an exchange filing that it has become the first Indian wind energy company to cross 20 GW of wind energy installations through 12,467 wind turbines installed across 17 countries.
Tata Power: Tata Power Renewable Energy through its subsidiary TP Vardhaman Surya received a Letter of Award (LoA) to set up 966 MW RTC (round-the-clock) hybrid renewable power for Tata Steel. The project has a hybrid renewable capacity of 379 MW solar and 587 MW wind power. Tata Steel will invest 26% equity in the said project. The project will be commissioned by June 1, 2025.
Tata Elxsi: The Tata Group company has partnered with the Indian Space Research Organisation (ISRO) to enable the upcoming Gaganyaan Mission. With this partnership, Tata Elxsi has designed and developed Crew Module Recovery Models (CMRM) for recovery team training of the space mission. Further, the company expanded its automotive and smart mobility focus in North America with the launch of an innovation hub and nearshore engineering centre in Troy, Michigan.
Mazagon Dock Shipbuilders: The state-owned shipbuilding company has signed a non-binding MoU with Thyssenkrupp Marine Systems, for cooperation and preparation for submarine project P75-I, in India. Thyssenkrupp Marine Systems would contribute to the engineering and design of the submarines as well as the consultancy support to this joint project, while Mazagon Dock would take responsibility for constructing and delivering the respective submarines.
Economy News
The Reserve Bank of India (RBI) monetary policy committee (MPC) kept the repo rate unchanged at 6.5%. The standing deposit facility (SDF) rate remains unchanged at 6.25% and the marginal standing facility (MSF) rate and the Bank Rate at 6.75%, RBI Governor Shaktikanta Das said.
The RBI estimated CPI-based inflation at 5.1% for 2023-24, with Q1 at 4.6%, Q2 at 5.2%, Q3 at 5.4% and Q4 at 5.2%. Further, the RBI said that real GDP growth is projected at 6.5% for FY24, with Q1 at 8%, Q2 at 6.5%, Q3 at 6% and Q4 at 5.7%.
The S&P Global India Services PMI Business Activity index fell from 62.0 in April to 61.2 in May, but still indicated strong growth.
India’s foreign exchange reserves fell for a second consecutive week to a one-month low of $589.14 billion as of May 26th. Gold reserves also fell by $225 million to $44.902 billion.
India received 57% lower rainfall than average in the first week of June, weather office data showed on Wednesday, after the monsoon’s onset over its southern coast was delayed by the formation of a cyclone. India received 9.9 mm rainfall against the normal 23.1 mm, according to the state-run India Meteorological Department (IMD).
Global Markets
The US markets closed with modest gains ahead of the Federal Reserve’s policy meeting and rate announcement on Wednesday [June 14, 2023]. Technology stocks rallied. For the week, the S&P 500 index gained 0.39%, Nasdaq rose 0.14% and the Dow Jones index advanced 0.34%.
On the economic front, the Labor Department reported that weekly jobless claims had jumped to 261,000, its highest level since October 2021. The Institute for Supply Management’s Services Prices moderated to 56.2, its lowest level since May 2020. Further, the gauge for overall activity in the services sector fell to 50.3, indicating subdued growth.
Chinese stock market ended mixed as investors were worried over the country’s economic rebound after the latest inflation data. The Shanghai Stock Exchange index inched up 0.04%, while the CSI 300 declined 0.65% and the Hang Seng index surged 2.32%.
On the economic front, China’s consumer price index rose 0.2% in May from a year earlier, compared with April’s 0.1% expansion. Core inflation, which excludes volatile food and energy prices, slowed to 0.6% from April’s 0.7% on an yearly basis. The producer price index fell a worse-than-expected 4.6%, compared with a decline of 3.6% in April. The latest inflation numbers indicated risks of deflation, weakening domestic and overseas demand, tepid property market and unemployment concerns.
Further, China’s services sector picked up in May, with the Caixin/S&P Global services purchasing managers’ index rising to 57.1 from 56.4 in April. China’s exports in May 2023 declined 7.5% YoY, while imports saw a smaller fall of 4.5% YoY. The country’s trade surplus in May was $65.81 billion, down 16.1%.
Japanese stock markets rose as investor sentiments were boosted by the country’s economic growth trajectory. The Nikkei 225 index gained 2.4% and the broader Topix index rose 1.9%. The yen was trading higher at JPY 139 range against the US dollar, as the ongoing monetary policy divergence between between the dovish Bank of Japan (BoJ) and the other major central banks. The weak yen supported Japanese exporters.
Japan’s economy grew an annualized 2.7% in the first quarter of the year, expanding further than earlier estimates of 1.6% made last month, government data showed. Japanese economy continues to witness robust spending. Japan’s service sector saw a record rate of expansion in May, with the au Jibun bank services purchasing managers’ index registering 55.9, surpassing the previous record of 55.4 in April.