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Dalal Street closed lower for the week weighed by negative sentiments due to elevated inflation and rising interest rates. Markets declined in the first four days of the week. However, Indian markets rallied on Friday after the Reserve Bank of India (RBI) raised benchmark repo rate by 50 basis points on Friday, along expected lines.
For the week, the Sensex fell 1.16% to 57,426.92. The Nifty 50 index declined 1.34% to 17,094.35. For the month, the Nifty 50 index fell 3.74% and the Sensex tanked 3.54%.
The BSE Midcap index dropped 1.65% to 24,853.94 and the BSE Smallcap index lost 1.25% to 28,452.91.
Top loser among Nifty sectoral indices were Metal [-4.3%], Energy [-3.47%], Auto [-3.01%], Realty [-2.92%] and Financial Services [-2.45%]. Top gainers were Pharma [2.86%] and IT [1.46%].
For the week, top laggards in Nifty 50 index were Adani Ports [-10.2%], Hero MotoCorp [-7.7%], Adani Enterprises [-6%], JSW Steel [-5.6%] and Maruti Suzuki [-5.5%]. Top gainers in the Nifty 50 index were Power Grid [4.8%], Dr Reddy’s [4.8%], Cipla [4.4%], HCL Tech [4.1%] and Airtel [3.7%].
During the week, FIIs sold for Rs 15,862.5 crore in the cash segment and DIIs bought for Rs 15,988.3 crore.
Indian rupee touched 81.94 against the US dollar on Wednesday, but rebounded to end at 81.35 against the US dollar on Friday.
Company News
Reliance Retail: The retail arm of Reliance Industries launched a premium fashion and lifestyle store brand AZORTE in Bengaluru as it aims to make a mark in the luxury market segment. The size of the store is around 18,000 square feet and it will compete with the likes of Mango and Zara. The store will cater to millenials and Gen-Z, according to Akhilesh Prasad, CEO of fashion and lifestyle at Reliance Retail.
Further, the retail arm of Reliance Industries has announced the launch of Reliance Centro, a fashion and lifestyle departmental store. The first Reliance Centro store was launched in Vasant Kunj, Delhi.
Tata Motors: The company plans to invest about Rs 2,000 crore in its commercial vehicle business per annum going ahead in order to drive in new models based on various kinds of powertrains, according to company’s Executive Director Girish Wagh. The company strengthened its pickup line with the launches of Yodha 2.0, Intra V20 bi-fuel and Intra V50 models as it is looking to transition to electric mobility through vehicles powered by CNG and other alternative fuel options.
The automaker has launched Tiago EV at a base price of Rs 8.49 lakh. The electric hatchback will have seven variants and the expensive variant is priced at Rs 11.79 lakh. The company is offering Tiago EV in two different battery packs — 19.2 kWh and 24 kWh battery packs. The 19.2 kWh battery will have a range of 250 km on a single full charge, while the larger battery will have a range of 315 km. Tata claims that the car can accelerate from 0 to 60 kmph in 5.7 seconds.
Vodafone Idea: In an exchange filing, the company informed that the company has been in discussion with Indus Tower for softer payment terms, which are continuing, but have not been concluded as yet. The company also said that it would keep the stock exchanges informed on any development with respect to the same. Shares of the Vodafone Idea rose 6.47% in intraday trade on Friday.
State Bank of India (SBI): The country’s biggest lender has filed a corporate insolvency petition against construction firm Jaiprakash Associates Limited (JAL) for a debt default of Rs 6,892.48 crore, businessline reported. The lender filed the petition before the Allahabad Bench of the National Company Law Tribunal (NCLT) on September 20. Currently, JAL has a outstanding debt estimated at about Rs 26,000 crore and has failed to convince its lenders of a restructuring proposal outside the IBC.
Hindustan Aeronautics Limited (HAL): The company has set up a Rs 208 crore Integrated Cryogenic Engine Manufacturing Facility (ICMF) in Bengaluru that would cater to the entire rocket engine production under one roof for Indian Space Research Organisation. The state-of-the-art ICMF is set up over an area of 4,500 square metres housing over 70 hi-tech equipment and testing facilities for manufacturing cryogenic (CE20) and semi-cryogenic (SE2000) engines of Indian rockets. President Droupadi Murmu inaugurated the facility on Tuesday.
Hero MotoCorp: The company said it will invest about Rs 490 crore in US-based Zero Motorcycles to jointly develop electric motorcycles. The country’s largest two-wheeler maker said it is finalising a collaboration agreement with the California (US)-based manufacturer of premium electric motorcycles and powertrains.
Adani Enterprises (AEL): The company has announced that its wholly owned subsidiaries — Budaun Hardoi Road, Hardoi Unnao Road and Unnao Prayagraj Road — have achieved financial closure for the greenfield Ganga Expressway project in Uttar Pradesh. The project concession period is for 30 years with traffic link extension provision of 6 years, including three years construction period, the company stated. Adani Enterprises has secured Rs 10,238 crore from the lenders to finance the construction of the Ganga Expressway.
Tata Consultancy Services (TCS): The company is helping CareScout, a Genworth Financial company, in its purpose-led journey to help American families access quality long-term care in a timely and effortless manner by connecting them with the right care facilities through a marketplace. The marketplace offers a seamless self-onboarding experience to CareScout users, with smart notifications and alerts assisting them to complete their profiles.
Adani Green Energy: The company has commissioned 600 MW of Wind-Solar Hybrid power plant ”Hybrid Power Plant” at Jaisalmer, Rajasthan. The plant has Power Purchase Agreements (PPA) with SECI at Rs 2.69/kwh for 25 years. This Hybrid Power Plant has been implemented consisting of 600 MW Solar and ~150 MW Wind plants.
Tata Communications: The company has launched a dedicated private 5G Global Centre of Excellence (CoE) in Pune to accelerate Industry 4.0 applications and capabilities for enterprises. With trials in progress, Tata Communications will be able to demonstrate private 5G use cases such as automated quality inspection of equipment using video and image analytics, inventory management and asset tracking, warehouse theft detection, AR/VR-based remote worker collaboration, and video-powered retail purchase.
FSN E-Commerce Ventures (Nykaa): The company announced that its board will consider and approve the issuance of bonus shares to the equity shareholders of the company. The bonus shares would be issued in the ratio as the board may deem fit and the board will seek shareholders’ approval by way of postal ballot for the same.
Larsen & Toubro (L&T): The company’s Buildings & Factories business division has secured an order to construct a new Medical College & Hospital at Golaghat, from the Assam Government on an Engineering, Procurement and Construction (EPC) basis. The total built up area will be 9.44 lakh Sq. ft. and the project is to be executed as per NMC norms within 36 months. The company classified the project as a significant project that would be wrth between Rs 1,000 crore and 2,500 crore. The company also secured an order from a prestigious client to construct commercial space at Bengaluru with an approximate built-up area of 10 lakh square feet.
Adani Enterprises: The company said that it has raised Rs 100 crore by allotment of non-convertible debentures on private placement basis. The company allotted 1,000 rated, listed, secured, redeemable, principal protected market linked non-convertible debentures (MLD) of face value of Rs 10 lakh each aggregating up to Rs 100 crore on private placement basis. The company also said that these debentures will be listed on the wholesale debt market segment of BSE.
Power Grid: The Indian Government has rejected a proposal for Power Grid to buy a controlling stake in power financier REC, The Economic Times reported citing Power Minister RK Singh.
IndiGo: The airline announced the induction of its first freighter aircraft converted from a passenger plane. The induction of A321 P2F (passenger to freighter) will help the airline offer cargo services on both domestic and international routes, IndiGo said. The aircraft will be able to service markets between China in the east and the Gulf in the west, as well as the Commonwealth of Independent States , the airline said. IndiGo also said it will be utilising the same pool of pilots and engineers that fly and service its current fleet for the cargo plane.
Adani Power: The Competition Commission of India (CCI) has approved the acquisition of 100% equity of Diliigent Power and DB Power by Adani Power. DB Power operates a coal-based thermal power plant with an installed capacity of 1,200 MW per hour in Chhattisgarh and Diliigent Power is primarily engaged in the activities of a holding company.
Adani Ports and Special Economic Zone (APSEZ): The company said that it has incorporated a wholly-owned subsidiary Adani Aviation Fuels Limited (AAFL) to carry on the business of sourcing, transporting, supplying and trading of aviation related fuels. The subsidiary was incorporated with an initial authorized share capital of Rs 5,00,000 and paid-up share capital of Rs 5,00,000 each to, interalia, carry on business of sourcing, transporting, supplying & trading of Aviation related fuels, constructing, developing, managing, maintaining, building, equip, hiring of infrastructure related to the business within and outside India.
Indian Oil Corp: The oil refiner has set up a subsidiary to pool funds of its overseas units in order to meet capital and trade finance needs, according to its exchange filing. The new subsidiary, Finance Company, will have its office in International Financial Services Centre (IFSC) at Gujarat International Finance Tec-City (Gift City). Companies based in GIFT City get a 100% income tax exemption for 10 years. The company plans to carry out activities like fund pooling of foreign companies and utilize it for carrying out trade financing for IndianOil and group companies. It also plans to carry out Global Treasury Operations and utilize IFSC to raise capital and debt from overseas market.
Torrent Pharmaceuticals: The company has entered into definitive agreements to acquire 100% of Curatio Healthcare for Rs 2,000 crore to strengthen its presence in the dermatology segment, it said in a regulatory filing. Sequoia-backed Curatio has a portfolio of over 50 brands that are marketed in India.
Axis Bank: The lender will invest between Rs 49.9 crore and Rs 69.9 crore to acquire 9.94% stake in Fairfax-backed Go Digit Life Insurance. Axis Bank has entered into an indicative and non-binding term sheet with Go Digit Life Insurance for the proposed investment by picking up equity in the insurer in two tranches, subject to regulatory approval.
Mahindra Logistics: The company announced the acquisition of the B2B express business of Gurugram-based logistics firm Rivigo Services. The company expects the acquisition will help Mahindra to accelerate its capabilities in this space. Mahindra Logistics will acquire the express business through a business transfer agreement (BTA), including the customers, team and assets of Rivigo’s B2B express business and its technology platform.
Jubilant FoodWorks: The company had acquired 29.42% stake in Roadcast and the acquisition of the remaining 10.58% stake is likely to be completed by October 26, according to the agreement signed between the two companies.
Economy News
India’s central bank raised repo rate by 50 basis points to 5.9% to fight persistent inflation. The RBI has increased the benchmark policy rate by 190 bps in the current financial year.
The RBI said inflation is projected at 6.7% in FY23. For Q2, Q3 and Q4, inflation is estimated at 7.1%, 6.5% and 5.8% , respectively. Inflation based on Consumer Price Index for Q1FY24 is projected at 5%.
Meanwhile, real GDP growth for FY23 is projected at 7%, compared to earlier projection of 7.2%. For Q2, Q3 and Q4, GDP growth is estimated at 6.3%, 4.6% and 4.6%, respectively. For Q1FY24, GDP is predicted at 7.2%. To read more on RBI’s assessment and outlook on inflation and economic growth, click here
India’s current account deficit (CAD) widened to $23.9 billion in April-June 2022 from $13.4 billion in January-March 2022, according to data released by the Reserve Bank of India (RBI) on September 29. The current account had recorded a surplus of $6.6 billion in April-June 2021. In percentage terms, the CAD in April-June 2022 was 2.8% of GDP, up from 1.5 % of GDP the previous quarter.
Meanwhile, India’s external debt during the first quarter of 2022-23 declined by $2.5 billion to $617.1 billion over end-March 2022, the RBI said on Thursday. The external debt to GDP ratio declined to 19.4% at end-June 2022 from 19.9% at end-March 2022.
Global Markets
The US markets declined for the third consecutive week as investors were worried that the aggressive rate hike policy and hawkish outlook by the Federal Reserve would push the country’s economy into recession. For the week, the S&P 500 fell 2.89%, the Dow tanked 2.91% and the Nasdaq index slumped 2.69%. For the month, the S&P tanked 9.32%, the Dow slumped 8.82% and the Nasdaq plunged 10.5%.
Japanese markets fell as investor were concerned over the bleak global economic growth outlook. The Nikkei 225 index fell 4.48% and the broader Topix index dropped 4.18%.
In the economic front, the au Jibun Bank Flash Japan Manufacturing Purchasing Managers’ Index (PMI) slipped to a seasonally adjusted 51 in September compared with 51.5 in August.
The US dollar continued to strengthen against Asian currencies weighing on market sentiment. Japan’s yen ended at 144.74 against the US dollar for the week.
Meanwhile, Japan’s central bank released minutes of the monetary policy meeting on Wednesday that showed policymakers voting 8–1 to maintain a negative benchmark interest rate of -0.1%.
Chinese stock markets fell ahead of a week-long holiday due to inflation worries and recession risks. In addition, weak factory output data also weighed on market sentiments. The Shanghai Composite index fell 2.07%, the CSI 300 index lost 1.33% and Hang Seng tanked 3.96%.
China’s official factory activity data unexpectedly expanded in August, beating estimates. China’s official manufacturing Purchasing Managers’ Index surprisingly grew in September to 50.1. The official non-manufacturing PMI came in at 50.6 in September, down from 52.6 in August.
However, the private Caixin survey showed the manufacturing purchasing managers’ index (PMI) fell to 48.1 in September from 49.5 in August, below the 50-point reading which indicates the manufacturing sector contracted.
The broad, capitalization-weighted Shanghai Composite Index fell 2.1% and the blue-chip CSI 300 Index, which tracks the largest listed companies in Shanghai and Shenzhen, shed 1.4%.
Eurostat data showed that Euro zone inflation hit a new record high of 10% in September up from 9.1% in August. The numbers also came above consensus projections of 9.7%.