Weekly Market Report: Major indices rise as inflation eases; RIL, Airtel, SBI and Adani Ports in news

Major domestic equity indices ended higher for the fifth straight week with marginal gains, aided by cooling inflation and easing crude prices. The Nifty 50 index rose 0.34% to 17,758.45 and the Sensex closed 0.31% higher at 59,646.15.

In broader markets, Nifty Midcap 100 rose 0.64% and Nifty Smallcap 100 increased by 0.38%.

On the weekly time frame, the Nifty index formed an indecisive candle resembling a gravestone doji after four bullish candles. On the daily chart, a strong bearish candlestick was formed on Friday.

During the week, FIIs bought for Rs 3,128.9 crore in the equity segment, while DIIs sold for Rs 1,808.8 crore.

Top weekly gainers among Nifty sectoral indices were Realty [1.61%], FMCG [1.15%], Energy [1.12%], Media [1%] and Metal [0.51%]. Top weekly loser were PSU Bank [-1.07%] and Pharma [-0.5%].

Company News

Reliance Industries Ltd (RIL), ONGC and Oil India: The government on late Thursday increased windfall profit tax on diesel export to Rs 7 per litre from Rs 5 per litre earlier. Besides, the government has again imposed Rs 2 per litre tax on export of aviation turbine fuel after scrapping it earlier this month. However, the government has reduced the windfall tax on domestically produced crude oil to Rs 13,000 a tonne from Rs 17,750 a tonne earlier.

Bharti Airtel, Reliance Jio and Vodaofne Idea: Airtel said that it has paid Rs 8312.4 crores to the Department of Telecom towards dues for spectrum acquired in the recently concluded 5G auctions. Airtel has paid 4 years of 2022 spectrum dues upfront. Airtel believes that this upfront payment coupled with the moratorium on spectrum dues and AGR related payments for four years will free up future cash flows and allow Airtel to dedicate resources to single-mindedly concentrate on the 5G roll out, according to its exchange filing.

Meanwhile, Reliance Jio and Vodafone Idea paid Rs 7,864 crore and Rs 1,680 crore, respectively. Adani Enterprises, which has acquired spectrum for captive private networks, is reported to have paid Rs 18 crore.

State Bank of India (SBI) and Bajaj Hindusthan Sugar: SBI has filed an insolvency petition in the National Company Law Tribunal (NCLT) against Bajaj Hindusthan Sugar. The petition has been filed at the Allahabad bench of the National Company Law Tribunal under the Insolvency and Bankruptcy Code. Bajaj Hindusthan Sugar owes nearly Rs 4,800 crore to banks like SBI, Punjab National Bank, Indian Bank and Central Bank of India.

Adani Ports & SEZ : Shares of the company rose 4.6% on Friday after the Indian government introduced the draft Indian Ports Bill, 2022, to consolidate and amend the laws relating to ports in India. The bill has been issued for stakeholder consultation, the Ministry of Ports, Shipping and Waterways said. The ministry intends to receive feedback and suggestions on the draft IP Bill 2022 from all the stakeholders and the bill document can be accessed from the websites of the MoPSW and Sagarmala.

In other news, the company’s subsidiary, Adani Logistics, has signed an agreement to acquire the ICD “Tumb” (Vapi) from Navkar Corporation Ltd for an enterprise value of Rs 835 crore. The deal includes acquisition of the operational ICD with capacity to handle 0.5 million TEUs. The associated 129 acres of land provides an additional expansion path to increase capacity and cargo in near future as additional industrial corridors and logistic parks get added along these DFC routes.

Mahindra & Mahindra (M&M): The automaker and Volkswagen Group have signed a term sheet for the supply of Modular Electric Drive matrix (MEB) electric components for M&M’s electric platform INGLO, the M&M’s new electric SUV family.M&M and Volkswagen will also explore other opportunities for collaboration, including e-mobility, vehicle projects, charging and energy solutions and cell manufacturing. The announcement comes after M&M unveiled its new electric SUV family at the Mahindra Born EV vision event in United Kingdom on Monday.

Hindustan Aeronautics Limited (HAL): The state-owned defense company has signed an MoU for establishing an office in Kuala Lumpur (Malaysia). The office in Malaysia will help HAL in tapping the new business opportunities for Fighter Lead-in Trainer (FLIT) LCA and other requirements of Royal Malaysian Air Force (RMAF) like Su-30 MKM and Hawk upgrades, the company said.

Travel and Hotel companies: Shares of travel and hotel companies rose after the Indian government approved increasing the limit of Emergency Credit Line Guarantee Scheme (ECLGS) by Rs 50,000 crore. With this, the limit rose to Rs 5 lakh crore from Rs 4.5 lakh crore earlier. The additional amount has been sanctioned exclusively for hospitality- and travel-related industries. The additional amount would be made applicable to companies these sectors till March 31, 2023.

IEX and Power companies: Power System Operation Corporation has asked three power exchanges including IEX, PXIL and HPX to restrict electricity trading by 27 discoms in 13 states having outstanding dues towards gencos, PTI reported.

Indian Railway Catering and Tourism Corporation (IRCTC): Shares of the company has jumped after the company announced plans to monetise its passenger data bank. IRCTC is looking to monetise its bank of passenger data while conducting business with private and government companies. The company aims to raise up to Rs 1,000 crore through this exercise. The company has just floated a tender to appoint a consultant to look for possible alternatives to monetise its data.

Tata Chemicals: Shares of the company jumped to an all-time high after the company gave a strong business outlook. The share price of Tata Chemicals has appreciated by 38 per cent in the lsat one month after the company reported better-than-expected earnings for the quarter ended June 2022 (Q1FY23). However, the share price retreated to close 0.53% higher from Thursday’s closing price.

Oil and Natural Gas Corp (ONGC): The state-owned oil explorer and producer said that it signed a Heads of Agreement (HoA) with global petroleum giant ExxonMobil Corp for deepwater exploration in India’s East and West coasts. “The collaboration areas focus on the Krishna Godavari and Cauvery Basins in the eastern offshore and the Kutch-Mumbai region in the western offshore. There has been a scientific exchange of exploration data in the last few years, which has led to this partnership,” ONGC said in an exchange filing.

GAIL (India): The public sector company received the board approval for additional fundraising of $3.125 billion via external commercial borrowing and up to Rs 25,000 crore via non-convertible debentures. The new fund raising comes on top of Rs 25,000 crore already borrowed by the company.

Max Healthcare: Singapore state fund GIC, US-based financial services firm Capital Group, and a few other institutions picked up KKR’s 26.8 per cent stake in hospital chain Max Healthcare via block deals. Max Healthcare promoters, led by Abhay Soi, will now own 24 per cent in the company.

Economy News

India’s inflation based on wholesale price index (WPI) stood at 13.93% in July 2022 compared with 11.57% in July 2021. The WPI grew 15.18% in June 2022. The slower pace of inflation was due to cheaper vegetables, milk and fuel.

The food index consisting of ‘food articles’ from primary articles category and ‘food product’ from manufactured products segment have decreased from 178.4 in June 2022 to 174.4 in July 2022. The rate of inflation based on WPI food index decreased from 12.41% in June 2022 to 9.41% in July 2022.

Primary articles, which constitute 22.6% of the WPI index, grew 15.04% in July 2022. Manufacturing products, which constitute 64.2% of the index rose 8.16% and fuel and power category jumped 43.75%.

Global Markets

The US markets fell for the week as investors gauged how aggressive the Federal Reserve may raise key interest rates to tame inflation. For the week, the S&P 500 dropped 1.2%, the Dow fell 0.2%, and the Nasdaq slumped 2.6%.

Chinese stock markets declined during the week as investors’ sentiments were dampened by weak economic data and higher COVID-related cases. The Shanghai Composite index dipped 0.6% and the CSI 300 index dropped 1% and Hang Seng slumped 2%.

According to data released by Chinese agencies, retail sales in July grew 2.7% year-on-year, while industrial output increased 3.8% YoY. Both the numbers were below market expectations.

Japanese markets ended higher helped by positive economic data. The Nikkei 225 index rose 1.3% and the Topix gained 1.1%.

Japan’s gross domestic product expanded by an annualized 2.2% in the second quarter of 2022, according to the government’s preliminary reading. Further, Japan’s industrial production rose by a seasonally adjusted 9.2% in June, according to the country’s Ministry of Economy, Trade, and Industry.