What happened last week?
Indian Markets made record highs last week. Nifty was up by 2% last week and closed at 24010. Nifty shot up 6.5% in June.
The rally was primarily driven by Index Heavyweights - Reliance, IT and Banking Stocks ← Reliance Jio & Bharti Airtel have announced significant tariff hikes of 10-27% on their prepaid and postpaid plans, effective from July 3-4, 2024. The tariff increases are expected to provide an additional ₹20,000 crore in operating profits for the telecom industry once fully absorbed.
The Midcaps and Smallcaps underperformed Nifty last week. There is another way to look at this. Nifty was lagging behind other indices over the last couple of weeks and it caught up with Next 50 and Midcaps last week.
Indian government bonds were added to JPMorgan's GBI-EM index on June 28, 2024, with a 1% weight expected to increase to 10% by March 2025. The news about the inclusion came last October (2023) and it has finally happened.
Just re-iterating what it means to us and the country.
It opens up India’s government bond market to a wider pool of global investors attracting foreign inflows → which will help lower borrowing costs for the Government → which eventually strengthens the rupee → leading to a lower Current Account deficit.
Speaking of Current Account Deficit → India recorded a $5.7 billion current account surplus in Q4 FY24, equivalent to 0.6% of GDP, versus a 1% deficit in the previous quarter, driven by higher service exports said the RBI.
RBI also released the Financial Stability report stating that the Banks and NBFCs are in good shape.
Indian banks have high capital ratios, multi-year low bad loans, and decade-high return ratios, indicating strong resilience.
Stress tests show banks would have sufficient capital to withstand even a severe stress scenario.
India's external debt to GDP ratio fell to 18.7% in FY24, the best level in 13 years, down from 19% the previous year, according to RBI data released on June 25.
It seems like nothing can go wrong with India right now. That makes me a bit cautious as well.
The Union budget 2024 is to be presented by Finance Minister Ms Nirmala Sitharaman in the last week of July 2024. → Option premiums might get costlier → Good to keep a tab on IV in monthly options.
Let us now dive deeper into FII DII Data.
FII DII Positions Analysis
FIIs bought ₹13261 Cr and DIIs sold ₹1452 Cr in the cash market. Over the last couple of weeks, we pointed out that FIIs are bullish. They continue to be net buyers in the cash market.
Below is the activity of FIIs across the cash market, Index Derivatives, and Stock Derivatives segments. FIIs continue to hold long positions in Index and Stock Derivatives. They have added longs throughout the last week.
Evidence suggests FIIs continue to be bullish.
Nifty Analysis
Both Price and Max Pain shot up last week. It started rising on Tuesday and Nifty remained bullish throughout the week. All the dips were bought into. Sentiment remained flat on Friday. Nifty still in bulls territory.
Note: We will follow the direction of the black and blue line below. If both black and blue lines are moving upwards, then the market is bullish. If both the black and blue lines are moving downwards then the market is bearish.
Stocks Coverage
Key Stock Announcements Last week
Note: All the news items below include only the core business activities.
New Orders & Projects:
RVNL received North Central Railway's acceptance for a significant contract.
ITD Cementation India secures INR 1,082 crore marine contract in Gujarat.
Ramky Infrastructure secures INR 131.19 crore contract from PowerGrid.
Kalpataru Projects International secures INR 2,333 crore orders.
Time Techno gets new INR 55 crore LPG cylinder order from IOCL.
Intellect signs 7-year deal with Vancity for digital banking platform.
Sanghvi Movers Ltd. announces INR 180 crore contracts in energy sectors.
NBCC (India) Ltd. awarded INR 100 Crore PMC contract for REC Limited.
VPRPL awarded INR 68 Crore contract for water treatment plant.
L&T wins order for 185 MW Solar PV Plant with energy storage.
Partnerships, Acquisitions & Investments:
Microsoft and Proximus forge 5-year alliance enhancing digital and cloud services.
Genesys International partners with NNG for advanced auto solutions in India.
Gateway Distriparks Limited acquires 6,00,000 shares of Snowman Logistics.
Asian Paints completes acquisition of 24.3% stake in SCIB Chemicals, Egypt.
JSW Infrastructure to acquire 70.37% of Navkar Corporation Limited.
Airtel secures 97 MHz spectrum investing INR 6,857 crore for enhanced services.
Dr. Reddy's to acquire Nicotinell® and global NRT brands portfolio for GBP 500 mn.
PI Industries to acquire Plant Health Care Plc for £32.78 mn.
SJVN signs MoU with AM Ammonia for renewable energy collaboration.
Imagica announces acquisition of MPIPL, a water park company for INR 208 crore.
Swan Energy acquires 49% equity in TOPL from IFFCO for INR 440 crore.
Amara Raja collaborates with Gotion-InoBat for advanced battery technology licensing.
ixigo expands PhonePe partnership, adds flight, bus, train bookings exclusively.
Business Operations:
Datamatics achieves ISO 42001:2023 for AI management systems.
Globus Spirits expands portfolio with new whisky and vodka brands in Uttar Pradesh.
IndusInd Bank promotes MSME growth with tailored banking initiatives nationwide.
Brigade Group launches Brigade Insignia in Bengaluru, promising luxury residences.
SBI issues INR 10,000 crore bonds at 7.36%, oversubscribed 4 times.
JSW Steel to invest USD 110 mn in Baytown plant for offshore wind.
Schaeffler India launches Planetary Gear Systems for hybrid vehicles.
Satin Creditcare expands microfinance presence in Northeast India.
MapmyIndia launches ClarityX for AI-driven enterprise analytics.
Route Mobile enables WhatsApp-based metro ticketing in Nagpur, Pune, Hyderabad, Delhi.
Paytm expands travel market share with partnerships & solutions.
Key Upcoming Events
July 1 (Monday): HSBC India Manufacturing PMI
July 2 (Tuesday): Fed Chair Powell Speech
July 3 (Wednesday): FOMC Minutes, HSBC India Services PMI, US Initial Jobless Claims
July 4 (Thursday): UK General Election
July 5 (Friday): India Foreign Exchange Reserves Data
The rest of the information is delivered through Dalal Street Breakfast on every market day at 8 AM. Check it out here!
Disclaimer: I am Anand Ganapathy K, a SEBI registered Research Analyst with SEBI registration number INH000016630. This weekly update highlights market trends and upcoming events for your awareness. It does not recommend buying or selling stocks mentioned in this newsletter.
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