Weekly Market Analysis for Feb 05-09, 2024
Interim Budget, Vikshit Bharat 2047, Infrastructure boost, US Fed announcement, Solid Earnings season, 36% fall in PayTM shares last week and much more...
What happened last week?
After 2 weeks of fall, Nifty bounced back last week. It even made an all-time high of 22126 before closing lower at 21853.
Last week there were 2 major events - India Interim Budget and US Fed meeting. Indian markets managed to close in green post the 2 major events.
Our Honorable Finance Minister, Ms Nirmala Sitharaman, presented the Interim Budget for 2024-2025 with the vision of ‘Vikshit Bharat by 2047’. Here are some highlights.
On track for 7.0% real GDP growth in FY25, positioning India to become the third-largest global economy with a GDP of $5 trillion by 2025.
Commitment to continued infrastructure development, with 11.1% increase in Capital Expenditure (CAPEX) to INR 11.1 lakh crore. India's CAPEX has nearly doubled in the last three years, reaching 3.4% of GDP.
The government is committed to fiscal consolidation, targeting a fiscal deficit of 5.1% of GDP for 2024-25, with a further reduction to below 4.5% by FY26, aiming for stability and sustained growth.
Railways get a boost with an allocation of ₹2.4 Lac Crores. No wonder the rail stocks were up significantly before the budget. Here are some highlights.
Conversion of 40000 normal bogies to Vande Bharat trains.
Three major economic railway corridors: (1) Port connectivity corridor (2) Energy, mineral and cement corridor (3) High traffic density corridor
Urban Transformation through Metro Rails and NamoBharat.
No Changes in Direct and Indirect Tax Rates.
The budget signals a long-term vision of a developed India by 2047, emphasising inclusive development, fiscal prudence, and strategic investments in infrastructure.
The US Fed announced its decision to maintain interest rates between 5.25 to 5.50% refraining from rate cuts at the moment.
India VIX (Volatility Index) dropped from 16 levels to 14.7 by the end of the week post the 2 major events.
All eyes in the coming week will be on the RBI as it will announce its Monetary Policy Decision on Feb 8th.
Q3 FY2024 Results season is in progress. Around 25% of the listed companies have announced their results and a majority of them (~60%) have shown positive growth in Revenue and Profit. Solid season.
Here are some Indian Economy related developments:
Government to sell rice under its own Bharat brand on Amazon, Flipkart, ONDC etc. The price is set at ₹29 per kg.
India manufacturing PMI rose to 56.5 in January notably higher than the December 2023 number of 54.9.
PayTM shares plunged 36% last week as RBI issued notice to cancel the operating licence of PayTM Payments bank from Feb 29. PayTM shares fell from 750 to 487. However, some institutions such as Morgan Stanley have pounced on this opportunity to accumulate shares at 487.
Quite an eventful week. Let us now dive deeper into FII DII positions.
FII Positions Analysis
FIIs sold ₹2000 Crores and DIIs bought ₹10100 Crores in the cash market.
In January, FIIs sold ₹36000 Crores and DIIs bought ₹26000 Crores in the cash market.
Although this heavy selling by FIIs caused huge volatility in Nifty in January, the prices on January 1 (21727) and January 31 (21725) were almost the same. FII selling of ₹36000 Crores did not bring the Nifty down on a monthly closing basis.
Last week we saw that the DIIs were not heavily hedged despite a fall. They had already indicated that they were willing to buy in the cash market. They are still not heavy on hedges. They are willing to buy more if required.
FIIs significantly reduced their short positions on the Index as price moved upwards.
FIIs have also built significant long positions in Stock Derivatives.
Overall both FIIs and DIIs are bullish.
Nifty Analysis
Both price (momentum) and max pain (sentiment) are shooting upwards indicating bullishness.
Key Upcoming Events
February 5 (Monday):
Results: Ashok Leyland, Tata Chemicals
IPO: Apeejay Surrendra Park Hotels subscription opens.
India Services & Composite PMI Data
February 6 (Tuesday):
Results: Britannia, Godrej Properties, Trident
February 7 (Wednesday):
Results: Apollo Tyres, PowerGrid, Lupin, Trent
IPO: Rashi Peripherals subscription opens.
February 8 (Thursday):
Results: LIC, Apollo Hospitals, Biocon, PFC
RBI Interest Rate Decision
February 9 (Friday):
Results: Tata Power, Godrej Industries, Pfizer
Bank Loan & Deposit Growth Data
Key Stock Announcements from Last Week
New Orders, Contracts & Projects
KEC International Ltd. has secured new orders worth Rs. 1,304 Crores in the Transmission & Distribution, Civil, and Cables segments.
Power Mech Projects Limited received orders worth Rs. 644.91 Crores, including contracts for construction works from Rail Vikas Nigam Limited and O&M services from Neyveli Uttar Pradesh Power Limited.
Krsnaa Diagnostics has been shortlisted by the Commissionerate of Health Services, Maharashtra, Government of Maharashtra, for providing MRI and CT scan services in district hospitals.
Azad Engineering Limited secures a 7-year contract with Rolls-Royce for producing critical engine parts for military aircraft engines.
BEL secures orders worth Rs 847 Cr, featuring a major contract with CBIC. Additional orders of Rs 182 Cr bring the total cumulative orders for the fiscal year to Rs 28,494 Cr.
Suzlon Energy Limited announces the acquisition of a 642 MW wind power project order from Evren.
L&T Construction secures a Solar Photovoltaic Plant order in Dubai, UAE.
Cochin Shipyard Limited (CSL) has secured a Rs. 500 crore order from a European client for constructing a hybrid Service Operation Vessel (SOV) catering to the offshore wind farm industry.
Divgi TorqTransfer Systems secured Rs 212 Crores worth of orders from North American automotive transmission manufacturers for precision components.
H.G. Infra Engineering Limited is declared L-1 bidder by South Central Railway for the doubling of track project in Nanded Division, with an estimated cost of Rs. 447.11 Crore.
Ion Exchange (India) Limited has been awarded a contract from Material Construction Trading FZCO, UAE, for a Desalinated water unit project in North Africa valued at INR 152.46 crores plus VAT.
Partnerships, Acquisitions & Investments
Tata Consultancy Services (TCS) announced a 15-year expansion of its partnership with Aviva, UK’s leading insurance provider, to transform Aviva’s UK Life business using TCS BaNCS-based platform.
Zodiac Energy entered into a power purchase agreement (PPA) with Uttar Gujarat VIJ Company (UGVCL) for the procurement of solar power on a long-term basis, part of the allotted capacity of 26.8 MW by UGVCL to Zodiac Energy.
GAIL (India) signed a long-term LNG purchase agreement with ADNOC Gas for around 0.5 MMTPA of LNG deliveries starting from 2026 for 10 years across India.
Karnataka Bank and Northern Arc Capital entered into an MOU to offer customer-centric financial solutions to retail borrowers.
Glenmark Pharmaceuticals has collaborated with Pfizer to launch Abrocitinib in India for the treatment of moderate-to-severe atopic dermatitis.
Gujarat Gas signed a Memorandum of Understanding (MoU) with Hindustan Petroleum Corporation (HPCL) for providing liquid fuels, automotive lubricants, greases, and specialties at Gujarat Gas outlets.
Business Operations
Reliance Jio added 34.47 lakh subscribers in November 2023, reaching 455.82 million subscribers.
Bharti Airtel added 17.47 lakh subscribers in November 2023, reaching 255.07 million subscribers.
Vodafone Idea posted a net loss of Rs 6,986 crore for the December FY24 quarter, narrowing from the previous quarter, with revenue falling 0.4% sequentially to Rs 10,673.1 crore.
Dishman Carbogen received the Attestation of Inspection from the European Directorate for the Quality of Medicines and HealthCare (EDQM) Authority.
Hero MotoCorp reported a 21.6% YoY increase in total sales for January 2024, with domestic sales rising 20.5% and exports surging 74.6%.
Eicher Motors’ Royal Enfield recorded a 2% YoY growth in motorcycle sales for January, reaching 76,187 units, while export sales declined by 20% to 5,631 motorcycles.
Ashok Leyland recorded sales of 15,939 units in January 2024, falling 7% YoY.
Management Changes
Yes Bank’s Country Head of Institutional and Government Banking, Arun Agrawal, resigned for personal reasons, effective January 29.
OnMobile Global appointed Radhika Venugopal as Chief Financial Officer, effective from April 1, 2024, with the resignation of Asheesh Chatterjee.
Indian Overseas Bank appointed Joydeep Dutta Roy as Executive Director till October 20, 2024.
UTI Asset Management Company re-appointed Imtaiyazur Rahman as the Managing Director and CEO for another term of two years from June 13, 2024, till June 12, 2026.
Mazagon Dock Shipbuilders appointed Sanjeev Singhal as Chairman and Managing Director for one month, effective February 2024, in addition to his current role as Director (Finance).
Dixon Technologies announced the resignation of Nirupam Sahay as President and COO of the lighting solutions business, with Amit Mittal assuming responsibility for the vertical.
Umang Dairies’ business head, Manish Upadhyaya, resigned as Chief Executive Officer and all key managerial personnel with effect from January 31, 2024, citing personal reasons.
Key Buying and Selling Deals
One 97 Communications Ltd (PayTM): Morgan Stanley Asia (Singapore) Pte. - ODI bought 5,000,000 shares at ₹487.2.
Policybazaar: Pi Opportunities Fund II sold 4,643,528 shares at ₹985.07. Claymore Investments (Mauritius) Pte. Ltd. sold 24,430,015 shares at ₹992.8.
Tips Industries: SBI Mutual Fund bought 6,425,721 shares at ₹380.
India Pesticides Limited: Quant Mutual Fund - Quant Active Fund sold 576,800 shares at ₹376.12.
Eris Lifesciences: Bhikhalal Chimanlal Shah sold 1,280,000 shares at ₹913.09.
Salasar Techno Engineering: Nomura Singapore Limited sold 3,470,000 shares at ₹28.2.
Indus Towers: Silverview Portfolio Investments Pte Ltd and Canada Pension Plan Investment Board collectively sold 130,803,065 and 57,669,394 shares at ₹210.21 and ₹212.15, respectively.
Swan Energy Limited: 2I Capital PCC sold 2,500,000 shares at ₹657.27.
Pricol Limited: Societe Generale bought 824,704 shares at ₹408.05.
Tourism Finance Corp: Quant Mutual Fund bought 600,000 shares at ₹208.57.
Venus Pipes & Tubes: Ashish Kacholia sold 1.03 lakh equity shares, equivalent to half a percent stake, in the company via open market transactions at an average price of Rs 1,511.68 per share.
Regulatory
One 97 Communications (Paytm) is facing further regulatory action from the Reserve Bank of India (RBI), with restrictions on deposits, credit transactions, and top-ups in customer accounts after February 29, 2024.
Panacea Biotec faced Official Action Indicated (OAI) classification from the USFDA for its Baddi, Himachal Pradesh facility, implying expectations of further corrective actions.
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