Share Market Highlights 17 January 2024: Sensex slumps 1,600 pts, Nifty settles below 21,600 as banking stocks drag the market

Rupak De, Senior Technical Analyst at LKP Securities:

“Bank Nifty experienced a sharp decline on the back of sell off in the heavyweight HDFCBANK. The index sharply fell below the 38.20% Fibonacci Retracement level of the previous leg of rally (from 43,230 to 48,347). Additionally, the index retreated within the area of the previous swing high after a consolidation breakdown on the daily chart. The sentiment may remain weak, with immediate support at 45,900-45,930. A drop below 45,900 could potentially initiate a further correction towards 45,500. On the upside, resistance is identified at 46,350.”

The rupee slipped 1 paisa to settle at 83.13 (provisional) against the US dollar on Wednesday amid massive selling in domestic equity markets and a strong greenback overseas.

“UK inflation picked up unexpectedly for the first time in 10 months, a setback that’s likely to temper discussion about when the Bank of England can reduce interest rates.

The Consumer Prices Index rose 4% from a year earlier in December, up from a 3.9% rise the previous month. That was above expectations for a slight fall to 3.8%.

Core inflation stripping out food and energy held at 5.1% same as previous month against a consensus expectation of 4.9%.

Food inflation continued to slow, dropping to 8% from 9.2% in November. That was more than offset by an increase in alcohol and tobacco prices, which rose by 12.8% from a year ago. The sharp increase in alcohol and tobacco prices was largely due to tax rises. Tobacco prices rose by 4.1% between November and December compared with a 0.3% rise between the same two months last year.” said Amit Goel, Co-Founder and Chief Global Strategist at Pace 360

Jateen Trivedi, VP Research Analyst, LKP Securities: 

“Rupee traded flat in range of 83.10-83.16 with dollar index rising and sell off in capital markets rupee weakness can continue towards 83.25-83.30. US RETAILS data will be in focus in evening which can give dollar new triggers. Range for rupee can be seen between 82.90-83.30”

Rupak De, Senior Technical Analyst, LKP Securities: 

“Nifty witnessed a significant decline driven by profit-taking following its record high of 22,124 in the previous trading session. Wednesday’s profit booking led the index to the 21-day Exponential Moving Average, a crucial short-term moving average. Sentiment could potentially deteriorate further if Nifty drops below 21,550, where the 21EMA is situated. On the downside, a breach of 21,550 may result in the index descending towards 21,350. Conversely, on the upside, resistance is observed at 21,650.”

Jaykrishna Gandhi, Head - Business Development, Institutional Equities, Emkay Global Financial Services on markets:

“Last week Nifty had a runaway rally as we kick start earnings season with large cap IT names beating estimates on margins helped by cost optimisation. Management commentary around discretionary spending remained weak.

This week markets took a turn today with Nifty banks falling ~4% as HDFC bank share price slipped 7% on concerns around slowdown in deposit growth. As talks around rate cuts continue and as banks struggle with balancing credit growth vs margins, we are likely seeing a tactical rotation towards good quality NBFCs.

As street is baking in good earnings growth for most mid cap names, Incrementally flows will be driven on how close actual releases come vs expectations built.”

Vinod Nair, Head of Research, Geojit Financial Services:

“A nosedive correction in banking stocks, along with concerns over delays in US FED rate cuts, impacted market sentiments. The addition of discouraging Chinese growth data and rising US bond yields, also resulted in widespread profit-booking. Given the elevated valuations, coupled with the fact that optimism regarding earnings and GDP growth for FY24 is already reflected in the market, triggered the correction.“

Today, the benchmark indices witnessed a sharp selloff, the nifty ends 454 points lower while the Sensex was down by 1614 points. Among Sectors, all the major sectoral indices were traded in the red but bank nifty and financial indices corrected sharply, both the indices shed over 4 percent. Technically, after a gap down open, the market witnessed intraday recovery but due to consistent selling pressure at higher levels, it again corrected sharply. A reversal formation on daily charts and bearish texture on intraday charts indicating weak sentiment is likely to continue in the near future. We are of the view that, the current market texture is weak but oversold hence, we could see pullback rally if the nifty succeeds to trade above 20 day SMA. For traders now, 21650/71850 or 20 day SMA (Simple Moving Average) would be the key level to watch out. Below the same, the weak sentiment is likely to continue. Below which, the index could slip till 21465-21400/71200-71000. On the other side, above 20 day SMA or 21650/71850 the market could bounce back till 21725-21750/72000-72100: Shrikant Chouhan, Head- Equity Research, Kotak Securities.

China Industrial Production Y-o-Y DEC

In December, industrial production increased by 6.8% compared to the previous year, surpassing November’s 6.6% growth and exceeding the expected steady reading of 6.6%. The production and supply of electricity, thermal power, gas, and water rose by 4.3% in December, while the value of mining added 2.3%, said Amit Goel, Co-Founder and Chief Global Strategist at Pace 360.

For the entire year of 2023, output experienced a 4.6% increase, improving from the 3.6% growth in 2022 but falling short of the pre-pandemic 5.7% pace seen in 2019, he added.

Appended are the Post-market views by Avdhut Bagkar Technical and Derivatives Analyst, StoxBox:

Indian equity indices declined sharply today amid a selloff as heavyweight banks slumped after HDFC Bank posted its Q3 results. Concerns escalated among investors due to heightened tensions in the Middle East and fading expectations of a rate cut by the US Federal Reserve. All sectoral indices were in the red, with the banking and financial services sectors leading the decline by dropping more than 2%. Among individual stocks, shares of RVNL surged around 10% after the railway firm said it has formed a joint venture with Jakson Green Private Limited to explore opportunities in solar power projects in India and abroad.

The Nifty 50 index opened with a dip cut of over 200 points and traded with a negative bias throughout the session. The weakness has taken over the positive bias, and if the index fails to recoup losses, the bears may find opportunities to seize control. Technically, 21700 becomes the immediate resistance followed by 21850 level. On the downside, 21500 needs to be watched for a decisive breakdown.

NATCO Pharma Limited has invested approximately $2 million in Cellogen Therapeutics Private Limited. Shares were down by 1.84% to ₹817 on the BSE.

The BSE Sensex plunged 1,628.01 pts or 2.23% to settle at 71,500.76. The NSE Nifty slumped 460.35 pts or 2.09% to end at 21,571.95. 

Top gainers on the NSE at 3.20 pm were HCL Technologies Ltd (1.39%), SBI Life Insurance Company Ltd (0.92%), LTI Mindtree Ltd (0.66%), Tata Consultancy Services Ltd (0.63%), and Infosys Ltd (0.53%)

Top losers on the NSE include HDFC Bank Ltd (-8.50%), Tata Steel Ltd (-4.15%), Kotak Mahindra Bank Ltd (-3.68%), Hindalco Industries Ltd (-3.37%), Axis Bank Ltd (-3.35%)

Of a total of 3,887 stocks that were actively traded on the BSE, 1,258 advanced, while 2,540 declined and 89 stocks remained unchanged. A total of 277 stocks hit a 52-week high and 17 stocks hit a 52-week low at 3.15 pm on Wednesday

Mas Financial Services Ltd plans to issue 2 bonus shares for crossing ₹10,000 crore in consolidated AUM. A resolution to raise funds up to ₹700 crore through a Qualified Institutions Placement, to support the company’s next phase of growth, has also been approved. the shares were up 1.64 per cent at ₹977 on the BSE.

Indian Renewable Energy Development Ltd has signed an MoU with Indian Overseas Bank for co-lending in Green Energy Financing. Its shares were up by 2.85 per cent at ₹122.90 on the BSE.

Shakti Pumps (India) Ltd has invested ₹13.16 crore in its wholly-owned subsidiary, Shakti EV Mobility Pvt Ltd, focusing on electric vehicle motors and chargers. The company plans to issue equity shares in consideration for the investment, with the total consolidated investment reaching ₹26.92 crore.

Tata Motors has launched the electric version of the Punch at an introductory price of Rs 10.99 lakh. The Punch.ev will be introduced in three personas, with a separate version for a longer range. The price of the electric vehicles will go up to Rs 14.49 lakh. Read more

Nova Agritech Ltd’s initial public offering will open on Monday, January 22; the price band is set at ₹39 to ₹41 a share. The issue closes on January 24, 2024. Investors can bid for a minimum of 365 equity shares, and in multiples of 365 equity shares thereafter.

The issue with a face value of Rs 2 per equity share consists of a fresh issue of equity shares worth up to Rs 112 crore and an offer-for-sale of up to 77.58 lakh shares by Nutalapati Venkatasubbarao.

The benchmark BSE Sensex fell 1,414.85 points, or 1.93 per cent, to 71,713.92, while the broader NSE index lost 388.3 points, or 1.76 per cent, to 21,644, as a drop in top private lender HDFC Bank after its quarterly results dragged high-weightage financials, while Asian peers eased after China’s quarterly growth fell short of expectations.

PSP Projects Ltd has secured a contract for the construction of the Gati Shakti Vishwavidyalaya for Rail Vikas Nigam Ltd at Vadodara, Gujarat. The contract is valued at ₹630.90 crore.

The PSP Projects stock rose by 1.33 per cent on the NSE, trading at ₹752.05 as of 1:32 pm; RVNL stock surged by 3.96 per cent, trading at ₹232.40. 

MosChip Technologies’ shift towards Turnkey ASIC solutions contributed to a 31% rise in EBIDTA. The shares were down by 2.27% to ₹102.14 on the BSE.

Sun Pharma will market the patented medicine, it reduces the risk of complications in patients with chronic kidney disease associated with type 2 diabetes, under the brand name Lyvelsa. The shares were down by 1.10% to ₹1299.10 on the BSE.

Exhicon’s shares were down by 2.39% to ₹429.50 on the BSE.

Summary:

• The central government will table its interim budget in early February before the general elections.
• Stronger tax revenue collections will help absorb the increase in spending in FY24.
• This year’s fiscal deficit target at -5.9% of GDP is expected to be met despite a softer nominal GDP.
• The risk of competitive populism has abated.
• We expect few relief measures for the rural/ farm sector whilst the capex push persists.
• The FY25 fiscal deficit target might stand at -5.3% of GDP, prioritising fiscal consolidation.
• The Budget is unlikely to influence the policy rate path.

Today’s market fall is led by Banks on the back of HDFC Bank results, showing heightened levels of credit/deposit (CD) ratio beyond RBI’s comfort levels. This is the case with most other banks as well. Thus, the markets expect either margin pressure, in case banks go in for aggressive deposit mobilization, a slowdown in lending growth, or both. This development can lead to some de-rating of the sector. After the significant up move we have witnessed recently, markets are taking a breather, especially since market valuations are higher than historical multiples. Thus, in the near term, we expect heightened levels of volatility in the markets while we remain constructive on the Indian markets from the medium to long-term perspective due to strong economic growth.

“With the upcoming 2024 central election, expectations are high for a well-balanced budget that combines growth-focused measures with populist initiatives. The government’s commitment to growth strategies, evident in improved road connectivity, enhanced rail infrastructure, and initiatives such as localizing imports and developing value chains for electronics or electric vehicles, is anticipated to persist in the upcoming budget. This continuity will reflect the government’s clear vision and approach towards fostering economic development. To continue momentum for the residential sector, a cut in tax rates is crucial as it will provide an impetus to homebuyers’ purchasing ability”.

Life Insurance Corporation of India (LIC) has resumed operations at its Mauritius branch with effect from January 17, 2024, after the passing of Cyclone Belal. 

The LIC stock traded at ₹898.05 on the NSE, up by 0.62 per cent as of 1:04 pm.

Adani Group announced investments of ₹12,400 crore in Telangana. Officials of Telangana Government and Adani Group representatives signed agreements in this regard in the presence of Chief Minister A Revanth Reddy and Adani Group Chairman Gautam Adani.

AI-powered fintech company Infibeam Avenues Ltd has appointed Rajesh Kumar SA as the Chief Executive Officer (CEO) of Phronetic.AI, the company’s artificial intelligence business. 

The Infibeam stock rose by 2.10 per cent on the NSE, traded at ₹26.70 as of 12:42 pm.

Karnataka Bank’s shares were up by 1.52% to ₹268 on the BSE.

LIC reports no damage due to the cyclone. Shares were up by 1.10% to ₹902.35 on the BSE.

“While no big bang announcements are expected in the interim budget, we expect the thrust toward infrastructure spending and manufacturing PLIs to continue in the full budget announcement later in the year. Given the sharp run up in markets, especially in the mid and small cap space, investors are advised to focus on asset allocation and invest with realistic return expectations. Don’t invest purely on the basis of superlative returns in the recent years.”

While 244 stocks hit 52 week high, 16 stocks hit 52 week low at 12.10 pm on Wednesday.

NSE top gainers at 12 pm include - HCL technologies Ltd (1.33%), SBI life insurance company ltd (0.79%), Infosys (0.75%), Tata consultancy services Ltd (0.45%), Bharat petroleum corporation Ltd (0.23%)

Top losers on the NSE include- HDFC Bank Ltd (-6.89%), Kotak Mahindra Bank Ltd (-3.26%), ICICI Bank Ltd. (-2.72%), Tata steel Ltd (-2.66%), Axis Bank Ltd (-2.50%)

Retail investors piled into Adani Group companies as their shares cratered in the wake of the Hindenburg Research’s scathing report last January. A year later, they’re still keeping the faith.

Individual holdings in nine of the group’s 10 stocks at the end of December are higher than they were before the short-seller’s attack on the conglomerate, exchange data compiled by Bloomberg show. 

HDFC Bank

Rating: ACCUMULATE

Target Price : ₹1889

Upside : 13%

CMP : ₹1679 (as on 16 January 2024)

Near term likely to be challenging; recovery, the key

HDFC Bank’s (HDFCB IN) Q3 PAT of ₹16,370 crore was broadly in line with our estimates following higher other income (stake sale in Bandhan Bank) and lower tax, even as core profitability fell short of expectations. The key highlight was higher-than-expected strain on NIM (even on trimmed expectations), given higher funding cost pressures. Given the regulator’s focus on CD ratio and HDFCB already at 110%, with LCR of 110%, the bank has much to balance (growth versus NIM conundrum). While one may argue on bottoming of earnings, we believe recovery may take longer and the stock may see time correction till investors find merit in execution. 

Much to ponder on as focus on NIM trajectory sustains

Earlier, HDFCB had indicated that higher liquidity and ICRR impacted NIM, which was expected to improve, However, despite using many levers (LCR down to 110%; LDR at 110%), the bank, at best reported stable NIM. With many variables at play, viz. transitionary liquidity requirement (scale has its own challenges while running tight liquidity), changing loan construct, and systemic challenges on deposits, we believe NIM recovery may take longer (not to mention, any rate change at the system level may push this down further). 

Monitor deposit mobilization as system pressure likely to sustain

We believe FY25 may be characterized by the nature of balance sheets and deposit franchises. Add to that, the merger for HDFCB has made deposit mobilization quintessential and essentially, the most discussed point by investors. With current liquidity scenario and regulator’s focus on CD ratio, we believe systemic aggression on deposits may sustain amidst HDFCB’s heightened needs post-merger. Thus, sustained deposit mobilization will be the key to confidence building. Also, its investment in deeper geographies may mean that it is structurally equipped to deliver strong outcomes while managing merger deliverables. Productivity from these branches may be critical to shaping investment outlook. Given HDFCB’s execution skill, we would rather be believers.

“India’s largest private sector lender, HDFC Bank Ltd., reported decent Q3FY24 results, with net profit beating market estimates. Amidst the NIM compression experienced by the banking industry, the private lender managed to sustain it on a sequential basis. Though the bank took a hit in its capital due to higher risk weights on unsecured loans, we believe that the growth in unsecured loans has been modest. 

With the aim of the bank to have over 13,000 branches in the next three to five years, we remain optimistic about building momentum on deposit growth in the long run. This will improve its CASA ratio going forward. Also, PAT improved in Q3FY24 due to lower taxes and higher treasury gains. Going forward, due to the bank’s legacy of healthy credit profiling, we do not see any further deterioration in its asset quality and expect it to be stable. Also, due to the bank’s vast branch network, its subsidiaries can access large cross-selling opportunities, thus indirectly supporting the topline growth. However, the effect of synergies due to the merger is still to be reflected in the bank’s numbers, and a wide gap is seen between advances growth and deposit growth. 

Thus, our outlook remains positive in the medium to long term, with the effect of synergies of the merger a key monitorable in the forthcoming quarters.”

• Goldman Sachs lowers forecast for Brent crude oil prices next year by $10 to a range of $70-$90 a barrel
• Expects Brent crude oil prices to peak at $85 a barrel by June 2024 before falling back to an average of $81 or $80 a barrel over the next two years
• Non-OPEC oil production in 2023 higher than expected, affecting oil prices
• Strong supply from the United States further strengthens downward pressure on oil prices
• Oil prices expected to fluctuate between $70 and $90 next year
• Goldman Sachs predicts Saudi Arabia is unlikely to engage in a “price war” and release new supply to push down oil prices
• Strong U.S. supply driven by non-price factors
• Saudi Arabia has less incentive to fight a price war compared to 1985
• International oil prices have fallen by about 20% since September last year

Tata Consultancy Services (TCS) has partnered with Macquarie University to launch the TCS GoZero Hub, a research and innovation centre to guide Australian organisations towards net zero carbon emissions. 

According to the press statement, the hub will focus on five themes aligning with the central themes of COP28, such as energy transition, carbon management, nature-positive future, circular economy and sustainable waste management, and climate adaptation and resilience. 

Adani Enterprises Limited (AEL) will invest over ₹5,000 crore in a 100 MW data centre, which would be powered by renewable energy, over the coming 5-7 years.

AEL will work closely with local MSMEs and start-ups to develop a globally competent supplier base for the project. It would provide employment, both direct and indirect, to 600 people.

Adani Green Energy Limited (AGEL) will invest over ₹5,000 crore to set up two pump storage projects (PSPs) –850 MW at Koyabestagudem and 500 MW at Nacharam.

Ambuja Cements will invest ₹1,400 crore to set up a 6 MTPA cement plant in the next five years. The unit would be set up across 70 acres and would significantly enhance Ambuja’s capability. It will provide employment for over 4,000 people, both directly and indirectly.

Adani Defence Systems and Technologies Limited will invest over ₹1,000 crore in 10 years to set up a comprehensive ecosystem for the research, development, design, manufacturing and integration of counter drone and missile systems at the Adani Aerospace Park. The ecosystem developed through these projects would significantly enhance the defence capability of India and would provide employment to over 1,000 people.

Birlasoft Ltd, a part of the CK Birla Group, is recognized as a ‘Leader’ in ‘Data Management and Cloud Computing’ and ‘Next-Gen IT/OT’ Services in North America by ISG Provider Lens Oil and Gas Industry – Services and Solutions Report 2023. The shares were up by 1.38% to ₹ 790.90 on the BSE.

Quint Digital Limited disclosed its plan to undertake investments up to $2 million in the global media space, following the Overseas Portfolio Investment Scheme under Foreign Exchange Management Rules, 2022. Shares were down by 0.11% to ₹142.45 on the BSE.

“The price of gold has declined, driven by strength in US Treasury yields and the US Dollar Index. Cautionary statements from the Federal Reserve, amid expectations of a rate hike cycle, coupled with statements from European Central Bank (ECB) officials dismissing the likelihood of early rate cuts amid signs of strength in the US economy, have thus eroded the recent gains made in the yellow metal.

On the geopolitical front, a heightened sense of instability in the Red Sea region, marked by an escalation in attacks and counterattacks, has bolstered the demand for gold, contributing to the support of the yellow metal’s prices.

Today, the market will focus on upcoming statements from Federal Reserve members and closely monitor the upcoming inflation data from the UK while keeping a watch on escalating geopolitical tensions.

Participation in gold has settled at elevated levels. This may lead to an extended rally in gold once participation expands further. We believe that gold will consolidate at its current prices. Nonetheless, it remains a favorable investment opportunity and should be accumulated during price corrections.

Currently, we are observing a rally up to ₹63,500. On the downside, gold may experience a correction down to ₹61,150 levels.”

“Since domestic prices are at a near-record high, there are chances of a correction possibly in the first quarter of 2024. However, a weak rupee and expectations of jewellery demand would offer downside support and hence it may preserve its positive outlook in the coming year as well.

At the same time, gold in the international market is likely to face some headwinds so it may trade in a tight range with minimum chances for major rallies or liquidation. US policy decisions, firm equities, and the performance of US assets would be the downside obstacles while the chances of low interest rates, geopolitical uncertainties, and central bank purchases are likely to dent major liquidation in prices.”

“Indian households possess up to 25,000 tonnes of gold which lies idle and can be leveraged as an immediate and reliable source of financing to meet immediate personal or business needs. Granting ‘priority sector status’ to gold loans and allowing a ‘Gold linked credit line via UPI’ can go a long way to help households/small business owners meet their financing needs and monetise idle gold jewellery.

We believe giving priority sector status to eligible gold loans will benefit the bottom of the pyramid and enhance financial inclusion. Typically small borrowers need loans under ₹50,000 (about 20 grams of gold collateral) for short durations like a year. Herein gold loan NBFCs can play an important role to fulfill the needs of small borrowers, self-employed, micro business owners, and help address their finance needs or working capital needs. Gold loans against jewellery also is a vital funding source for MSMEs. Gold loans provided by banks to farmers do get priority sector status, but not gold loans provided by NBFCs. Extending priority status to all micro gold loans (under ₹50,000) by removing the current distinction between NBFCs and banks can enable gold loan NBFCs access to increased funding.

Gold linked credit line enabled via UPI

While banks offer credit line to companies like an overdraft, Banks don’t have a small credit line product for a common man which can help address monthly short term finance needs and as a result the common man either keeps huge balance in savings account, or resorts to a credit card or a personal loan to meet immediate gaps in monthly finance needs. 

We believe that a ‘gold linked credit line via UPI’ will be ideal for common man. For this extending the UPI linkage (payment system) by NBFCs is the first requirement, and once this is allowed, gold loan NBFCs can extend a credit line to common man. Unlike a credit card, this product will work like a secured credit extended by NBFCs and also attract lower interest rate (of 12%-18%) as compared to a higher interest rate (of ~36%) on a credit card.”

The partnership focuses on joint research programs, academic initiatives, and workshops, with a primary emphasis on addressing challenges related to Municipal Solid Waste management and environmental sustainability. The shares were up by 0.83% to ₹235.95 on the BSE.

PTC Industries Ltd’s subsidiary, Aerolloy Technologies Limited, signed a Long Term Purchase Agreement with Dassault Aviation for the supply of Titanium Cast parts for the Rafale Multirole fighter aircraft and Falcon business jet program. The shares were up by 6.72% to ₹7434.45 on the BSE.

The January futures contract of Nifty 50 opened today’s session lower at 21,743.70 versus yesterday’s close of 22,029.50. It is now trading at 21,820, down nearly 1 per cent.

The current level of 21,820 is a support. Just below this lies the 20-day moving average at 21,750. Therefore, the price band of 21,750-21,820 is a support band.

Silver prices declined as the U.S. dollar lingered near a one-month high, driven by comments from U.S. Federal Reserve officials who tempered expectations of aggressive interest rate cuts. The market widely anticipated that the U.S. central bank would maintain its policy rate at the end of its upcoming meeting. According to the CME Fedwatch tool, traders estimated a 70% probability of an interest rate cut in March.

BofA Global Research’s January Global Fund Manager Survey (FMS) showed that respondents are very optimistic on rate cuts and macro “soft” landing but cash levels in January rose from 4.5 per cent to 4.8 per cent amid tempering of bond market optimism. 

Both bond and equity investors say the US Fed will be the number one driver of price this year amid a record optimism on rate cuts. Just 3 per cent expect higher rates. 

FMS investors are still overweight equities, but allocation dropped 6ppt this month to net 9 per cent OW. FMS investors have been OW equities for three months now, after an 18-month period of underweight allocation that ran from May’22 through October ‘23. Current allocation is 0.6 standard deviation below its long-term average.

L&T secured orders in India and Oman. In Navi Mumbai, a repeat order from Maharashtra’s Government Planning & Development Authority involves the construction of EWS Housing comprising 14 towers. Additionally, L&T Oman is awarded a contract for a Mixed-Use Development project in Muscat, including a 3-star hotel, serviced apartments, and a residential apartment-office block. The shares were up by 0.87% to ₹3604 on the BSE.

Piramal Critical Care (PCC), a division of Piramal Pharma Ltd, has launched 10mg/10mL (1 mg/mL) concentration of Zinc Sulfate for Injection USP in the US.

The launch will enable further expansion of the existing Zinc Sulfate Injection product line and the overall generic injectables portfolio, a regulatory filing by Piramal Pharma said.

The Piramal Pharma stock traded at ₹139.45, up by 0.90 per cent on the NSE as of 9:36 am. 

Bajaj Auto on Tuesday unveiled the Husqvarna Svartpilen 401 and Vitpilen 250. 

Husqvarna Motorcycles built their reputation in Motocross by winning the first five FIM Motocross World Championship titles in the 60s.Steeped in Swedish heritage, with a legacy that spans over a century, Husqvarna offers both performance and style.

The media arm of Adani Group on Wednesday said it increased its stake in IANS India by subscribing to fresh shares issued by the news agency worth 50 million rupees ($601,801).

AMG Media Networks, a unit of Indian billionaire Gautam Adani’s flagship firm Adani Enterprises has increased its ownership of IANS shares with voting rights to 76 per cent, and nearly all non-voting shares, up from 50.5 per cent each earlier.

The rupee depreciated 3 paise to 83.15 against the US dollar on Wednesday, tracking a strong greenback against major rivals overseas and massive selling in domestic equity markets.

However, inflow of foreign funds in domestic equity markets and softening crude oil prices in the international markets resisted a steep fall in the domestic currency, forex traders said.

A stronger dollar made crude oil futures to trade lower on Wednesday. Meanwhile, the latest GDP numbers from China showed growth in Q4 of 2023. At 9.50 am on Wednesday, March Brent oil futures were at $77.75, down by 0.69 per cent; and March crude oil futures on WTI (West Texas Intermediate) were at $71.92, down by 0.83 per cent. January crude oil futures were trading at ₹5975 on Multi Commodity Exchange (MCX) in the initial trading hour of Wednesday morning against the previous close of ₹6003, down by 0.47 per cent; and February futures were trading at ₹6019 as against the previous close of ₹6037, down by 0.30 per cent.

Tata Consultancy Services (TCS) reported a growth of $2 billion in brand value, reaching $19.2 billion in the 2024 Global 500 IT Services Ranking by Brand Finance with an 11.5% year-on-year increase, the shares were up by 0.99% to ₹3899 on the BSE

Shriram Finance Limited plans to issue $750 million 6.625% Senior Secured Notes due 2027 under a $3.5 billion Global Medium Term Note Programme, with an issue price of 99.961%. The Social Bonds will be listed on the Global Securities Market of the Indian International Exchange. Shares were down by 0.01% to ₹2309 on the BSE.

Gold prices experienced a decline as the US dollar strengthened following comments from Federal Reserve Governor Christopher Waller. Waller’s remarks raised concerns that the Fed might not pursue interest rate cuts as aggressively as initially anticipated. While he acknowledged the likelihood of interest rate cuts this year, Waller emphasized the importance of a careful and measured approach, discouraging a rushed implementation of monetary policy relaxation. Simultaneously, comments from several top bank officials in Europe suggested that rate cuts are unlikely in the near future. 

UBS on GAIL: Upgrade to Buy on Company, raise target price at ₹190/sh (Positive)

MS on Ambuja Cement: Upgrade to overweight on Company, raise target price at ₹600/sh (Positive)

MS on ACC: Upgrade to Equal weight on Company, raise target price at ₹2400/sh (Positive)

MS on Ultratech: Maintain overweight on Company, raise target price at ₹12000/sh (Positive)

MS on Dalmia Bharat: Maintain overweight on Company, raise target price at ₹2750/sh (Positive)

MS on Grasim: Maintain overweight on Company, raise target price at ₹2430/sh (Positive)

MS on Shree Cement: Maintain Equal weight on Company, raise target price at ₹28500/sh (Positive)

MOSL on Cipla: Maintain Buy on Company, target price at ₹1540/sh (Positive)

Citi on Bharti Airtel: Maintain Buy on Company, target price at ₹1270/sh (Positive)

Citi on Indus Tower: Maintain Buy on Company, target price at ₹265/sh (Positive)

CLSA on Hero Motocorp: Maintain Buy on Company, raise target price at ₹4964/sh (Positive)

CLSA on HDFC Bank: Maintain Outperform on Bank, raise target price at ₹2025/sh (Positive)

Bernstein on HDFC Bank: Maintain Outperform on Bank, target price at ₹2200/sh (Neutral)

MS on HDFC Bank: Maintain Overweight on Bank, target price at ₹2110/sh (Neutral)

Citi on HDFC Bank: Maintain Buy on Bank, cut target price at ₹2050/sh (Neutral)

Jefferies on HDFC Bank: Maintain Buy on Bank, target price at ₹2000/sh (Neutral)

HSBC on HDFC Bank: Maintain Buy on Bank, target price at ₹1950/sh (Neutral)

DAM on HDFC Bank: Maintain Buy on Bank, target price at ₹2000/sh (Neutral)

Incred on HDFC Bank: Maintain Add on Bank, target price at ₹2000/sh (Neutral)

MOSL on HDFC Bank: Maintain Buy on Bank, target price at ₹1950/sh (Neutral)

MOSL on LTTS: Maintain Buy on Company, target price at ₹6220/sh (Neutral)

UBS on Bajaj Finance: Maintain Sell on Company, target price at ₹6800/sh (Neutral)

MS on ICICI Lombard: Maintain Overweight on Company, target price at ₹1750/sh (Neutral)

MS on Federal Bank: Maintain Equal weight on Bank, target price at ₹165/sh (Neutral)

CLSA on TVS Motors: Maintain Sell on Company, raise target price at ₹1438/sh (Positive)

Nuvama on HDFC Bank: Downgrade to Hold on Bank, cut target price at ₹1730/sh (Negative)

Nomura on HDFC Bank: Maintain Neutral on Bank, cut target price at ₹1625/sh (Negative)

MS on LTTS: Maintain Underweight on Company, target price at ₹4600/sh (Negative)

Citi on LTTS: Maintain Buy on Company, cut target price at ₹4065/sh (Negative)

CLSA on Bajaj Auto: Downgrade to Sell on Company, cut target price at ₹6315/sh (Negative)

CLSA on Eicher Motors: Downgrade to Sell on Company, cut target price at ₹3716/sh (Negative)

● From Price Action Perspective: 

Profit booking was visible from higher levels yesterday, and as a result, Nifty lost 0.29% yesterday primarily due to profit taking in IT sector, Reliance and Pharma. Banknifty, for a change, outpeformed the broader markets by closing flat largely in anticipation of decent numbers from HDFCBANK. 

● Decoding Asset Relationships:

The Dollar index broke above its 13-day range, marking a potential change in sentiment in the currency basket as it approached 103.35 levels. US 10-year Bond yields too experienced uptick as it comfortably sustained above 4.05% in tandem with the dollar index.

Meanwhile, Brent Crude remains steady between $80-75 a barrel. 

● Quick Check on Global Markets:

The S&P 500 opened with a downwards gap, experiencing price rejection near its life high zone closer to 4800. This is the second price rejection in a fortnight. Overall, Momentum is bullish, but for fresh momentum to emerge, it is essential for the index to surpass this level of 4800. 

On the downside, the previous swing low of 4700-4690 zone could act as an important support.

● Key Nifty levels:

A single day of red in the market does not necessarily indicate a downtrend. The global cues from coming from the recovering dollar index and selling pressure in S&P 500 may gather like clouds on the horizon, but it may not indicate a signal to go aggressively short just yet. Rather, it could be a warning to decrease leveraged positions and hedge existing long positions. It also could signal an elongated period of consolidation going ahead into the quarterly numbers. 

Going forward, from a short-term perspective, post the gap down, support is likely to be seen at 21700-21730 level & resistance on the upside will be closer to 22000-22030. 

In case 21700 is breached, 

Index could slide towards 21550-21510 zone on the downside. 

Above 22030, the Index could resume its uptrend towards 22220-22280 zone. 

However, since HDFCBANK Bank numbers are not on expected lines and ADR is trading with a deeper cut, expect the initial trading sentiment to get hit. Also, with IT too coming under pressure, we could witness some additional profit booking in the coming few sessions. 

● OI data Interpretation for weekly series, 

The open interest for January futures declined by 1.41% while the price fell 0.49%. This indicates partial, long unwinding of positions.

Nifty PCR_OI has cooled off to 1.11 levels. 

Put writing seen in 22000 and 21900 strikes while 22100 as well as 22300/22500 calls have seen aggressive writing. 

Overall, the range for the coming few sessions could be 21700 on the downside & 22150 on the upside.

● Key Bank Nifty Levels:

HDFC bank’s quarterly earnings were released yesterday, and what was notable was a prominent lack of expansion in Net Interest Margins. This is likely to put a damper in the banking sector as a whole as the markets digest this development.

Going forward, the zone of

48300-48250 is likely to act as a resistance & till this holds, index can experience profit booking upto 47600-47700 zone.

In case 47600 breaks, Index can retest its next support placed at 47100-47000.

Above 48300, Bank Nifty could witness a sharp extension of the rally towards 48600-48800. 

For the next weekly Expiry,

In banknifty’s case, too, the near expiry experienced a decline of 0.48% while, on a cummulative basis, the futures OI surged by 0.34%, indicating opening up of minor short positions ahead of HDFCBANK’s numbers. 

FIIs sold 2557 contracts when it came to banknifty.

Banknifty’s PCR is weaker at 0.92. 

Significant Open Interest buildup is witnessed in 48300-48500 calls and 48100-48000 puts, implying a range of 47700 and 48600 for the coming few sessions. 

However, in case BN slips below 47600-47650, Short-covering in Puts could be witnessed, which could put further pressure on the Index. 

Next few sessions are going to be crucial for Bank Nifty as numbers of ICICIBANK and Kotak Bank are also scheduled to be released in next 3 days. 

● Sectors & stocks in Momentum:

The most influential stocks whose quarterly earnings are due today are Asianpaints, ICICI Pru, LTIM and OFSS. 

Oil and Gas constituents such as Ongc, Petronet, Gugasltd, Bpcl and Aegischem have formed favourable chart structures on daily as well as weekly timeframes. 

From the broader market, bullish setups were observed in Titan, Itc, Tatamotors, Irfc, Sail, Bankindia, Biocon, Policybzr, Escorts, Nmdc, Lichsgdin, Cochinship, Amber, Intellect, Nationalum, Idbi, Idfc and RVNL. 

● FII - DII data Synopsis

In the Cash Segment, 

FIIs bought to the tune of 656.57 cr, while DIIs sold to the tune of 369.29 cr. 

FIIs’ Long Short Ratio for Index Futures slightly weakened to 65.56 as on a net basis, they sold 2096 index futures. 

On the stock futures front, FIIs have sold to the tune of 9797 contracts, while on the Options Front, FIIs bought 10850 call contracts and bought 271500 Put Option contracts. Buying of these put options could be a potential hedge against the overall existing Index Futures and Stock Futures Long positions. 

NSE top losers at 9.30 include- HDFC Bank Ltd (-5.96%), Hindalco Industries Ltd (-3.11%), Tata Steel Ltd (-2.26%), Bajaj Auto Ltd (-1.96%), DR. Reddy Laboratories Ltd (-1.40%)

Top losers at 9.30 were HDFC Bank Ltd (-5.96%), Hindalco industries Ltd (-3.11%), Tata steel Ltd (-2.26%), Bajaj Auto Ltd (-1.96%), DR. Reddy laboratories Ltd (-1.40%)

HDFC BK Review

CLSA

Buy, TP ₹2025

Mixed qtr 

NIM stable, but deposit traction & branch opening weak

Loan growth & asset quality good; 1-off credit costs

Cut est. 3%-5% on a/c of lower deposit & loan growth

2 key things to monitor- ability to raise deposits & NIM trajectory

MS

OW, TP ₹2110

F3Q24 PAT of ₹16,400 crore grew by 2% QoQ, beating MSe by 4%, owing to lower taxes

NII up 4% QoQ, in-line 

Margins stable QoQ as expected

Core PPoP up 3% QoQ (in-line) 

Credit costs higher largely owing to 1-time contingency provisions

Bernstein

O-P, TP ₹2200

1st YoY EPS decline in a decade, sums up a disappointing qtr

Reported very Qtr— NIMs flat QoQ, borrowings grew faster than deposits & bank had to once again use lower tax expense route to maintain its 2% RoA

HSBC

Buy, TP cut to ₹1950 

Moderate NIM expansion est. to c15bp over FY2024-26e (c30bp earlier); few NIM levers remain

With a NIM recovery being potentially back-ended, HDFCB’s near-term earnings est. 

Cut EPS by 0.8/7.8/5.8% for FY24/25/26e

Jefferies

Buy, TP ₹2000

Core PBT at ₹20,700, up 4% QoQ, in line 

But net profit at ₹16,400 ahead with lower tax rate & higher treasury 

Key miss was in QoQ flat NIMs even as impact of ICRR & surplus liquidity receded

L&T Tech Review

MS

UW, TP ₹4600

Q3 a miss vs. MSe, but management commentary constructive on demand

Believe STK would need material acceleration in growth in F25, absent which it could underperform.

Reported revenue growth of 0.9% qoq in constant currency terms (vs. 2.1% est.)

CITI

Sell, TP ₹4065

Soft rev growth at 0.9% in cc(Citi: 2% in cc)

EBIT margins slightly better 

Forward looking indicators –

a) FY24 overall cc rev guidance maintained at 17.5% to 18.5% 

b) headcount declined 2.4% qoq 

Nomura

Reduce, TP cut to ₹3880

3Q misses both at rev & margin levels

4Q ask rate a steep one; for achieving FY24E revenue growth guidance of 17.5-18.5%

Stock is currently trading at 38x FY25F & 33x FY26F EPS

UBS resumes coverage on Bajaj Finance

SELL, TP ₹6800

High share in consumer finance; mounting competition underappreciated

Consensus is overestimating ROA profile of Bajaj Finance

Yield to be under pressure in urban consumer financing (37% of standalone AUM; 45% interest earned & over 60% of core fee income in FY23)

High mkt share in consumer finance – 50%

Bajaj’s high-yield consumer segment AUM to grow 4-6% below consensus in FY23-26E

1/3rd of fee, forming 28% of PBT in FY23; could be under pressured by competition

We est 21% CAGR in EPS over FY23-26E vs 28% in FY20-24E

FY25/FY26E is 9%/15% lower than consensus

JFS’s expansion could put pressure on consumer loans in medium term

Quality of customer base is peaking; cross-selling is key to incremental growth

MS on Cement

Believe industry is in middle of a multiyear demand upcycle

Although capacity addition remains strong, utilization levels are expected to remain high

This consequently should drive margin expansion over next couple of yrs , & hence further re-rating

Upgrade Ambuja to OW, TP raised to ₹600 from ₹390

Upgrade ACC to EW, TP raised to ₹2400 from ₹1650

Ultratrech – OW, TP Raised to ₹12000 from ₹9300

Dalmia– OW, TP Raised to ₹2750

Grasim– OW, TP Raised to ₹2430 

Shree Cement – EW, TP Raised to ₹28500

Citi On Banks

Business Updates Reflect Further LDR Expansion & LCR Contraction

Incremental Levers Point To Further NIM Downside

Lower FY25/26 NIM Ests For Kotak Bk. HDFC, Axis, Federal & ICICI

Prefer Prvt Bks, Followed By NBFCs Over PSU Bks 

Downgrade SBI To Sell, TP cut to ₹600 From ₹700

Downgrade Federal To Neutral, TP Cut To ₹135 From ₹170

Upgrade M&M Fin To Buy, TP Cut To ₹310

Upgrade Chola Invst To Buy, TP Raised To ₹1510 From ₹1200

CLSA on 2Ws

Downgrade Bajaj Auto & Eicher Motors to Sell from U-P

Believe stocks (ex Hero) are overvalued following recent rally

Turn cautious as valuations are pricing in double-digit volume growth over next few years, which think is unlikely

Bajaj Auto - Downgrade to SELL, TP ₹6315 (13% downside potential)

Cut FY24/25CL vol assumptions by 4.7%/6.3% 

Eicher Motors - Downgrade to SELL, TP cut to ₹3716 from ₹4129

Expect new competitors (Harley/Triumph) to gain market share

Hero Motocorp - O-P, TP Raised to ₹4964 from ₹4127

Increase vol est. in premium motorcycle & electric scooter segments

TVS Motors - Sell, TP ₹1438 (30% downside potential)

Decrease FY24/25CL volume est by 2.0/4.1%

Karnataka Bank: Company enters into co-lending partnership with ClixCapital to provide loans to Indian MSMEs 

RVNL: Company forms 49:51 joint venture with #JaksonGreen for solar projects in India and oversees:

ICICI SEC Q3: Total Income at ₹1322.0 crore versus ₹879.0 crore YoY, ₹1249.0 crore QoQ. Net Profit at ₹466.0 crore versus ₹281.0 crore YoY, ₹424.0 crore QoQ

IREDA: The Company has signed MoU with Indian Overseas Bank for Co-lending in Green Energy Financing

PNC Infratech: Company gets Letter of Acceptance for road construction project worth ₹1,174 crore.

UltraTech Cement: Incorporates Meghalaya unit Letein Valley Cement for limestone mining 

Adani Energy Solutions: Company’s smart-metering contracts include 8 projects with a contract value of ₹25,100 crore. 

GR Infraprojects: Company executes concession agreement with NHAI for ₹1085.5 crore four-laning project in Uttar Pradesh. 

GMR Airports: Total passenger traffic at airports at 1.1 crore, up 15.3% year-on-year.

Newgen Software: Management says robust profitability and significant cash flow generation. 

*ICICI Lombard: Company has registered a 22.4 percent on-year growth in net profit at ₹431 crore.

Godrej Prop: Company has acquired an additional 1 acre of land parcel in Yeshwanthpur, Bengaluru. 

Piramal Pharma: Company announced the launch of a new concentration of zinc sulfate injection in the US market

HDFC BANK: NII at ₹28471.0 crore versus Poll of ₹29079.0 crore, Net Profit at ₹16373.0 crore versus Poll of ₹15693.0 crore 

LTTS: Net Profit at ₹336.2 versus poll of ₹332 cr, Revenues at ₹2422 versus poll of ₹2454 cr 

TCS: Company to train entire staff of over 5 lakh software engineers on upcoming Generative AI opportunity.

TV18 Broadcast: Company posted a five percent on-year decline in consolidated revenue at ₹1,676 crore for the quarter ended December FY24. 

DCB Bank: The private sector said the RBI approved the appointment of Praveen Achuthan Kutty as its Managing Director and CEO. 

Network18: The company reported a loss of ₹107.87 crore for the third quarter that ended December 31, 2023

Newgen Software Technologies stock has surged by five per cent, hitting a 52-week high on the NSE, at ₹901.05 on Tuesday. 

The company reported its consolidated net profit for the quarter ended December 2023 at ₹68.34 crore as against ₹47.3 crore in December 2022.

Jubilant Foodworks Ltd has announced that its board has approved further investments of up to ₹25 crore (or its equivalent in Euro) in Jubilant Foodworks Netherlands B.V. (JFN), wholly owned subsidiary of the company. 

As per the stock exchange filing, the proposed investment in JFN will be utilised towards funding the interest payments on credit facilities availed from The Hongkong and Shanghai Banking Corporation Limited for acquisition of stake in DP Eurasia N.V. and general corporate purposes.

Wonderla Holidays Ltd has announced that Gaurav Sondhi has joined the company as its Vice President of Sales.

He brings over 12 years of dynamic experience, including his recent role as the Head of Partnerships and Alliances at Zomato Entertainment Limited.

US-based investment management firm GQG Partners has increased stake in cigarette-to-soap maker ITC, adding more than 15 crore shares as foreign portfolio investors.

The name of Goldman Sachs GQG Partners International Opportunities Fund, which bought over 13.1 crore shares representing 1.05 per cent stake in ITC during the third quarter this fiscal, has emerged for the first time in the shareholding of the diversified conglomerate.

HDFC Bank posted a 33.5 per cent year-on-year rise in net profit for Q3 FY24 at ₹16,370 crore, on the back of robust growth in both net interest income and other income. Sequentially, the profit after tax was 2.5 per cent higher.

Net interest income (NII) rose 23.9 per cent y-o-y and 4.0 per cent q-oq to ₹28,470 crore. Other income for the quarter was up 31 per cent y-o-y and 4 per cent q-o-q to ₹11,140 crore, led by strong growth in fees and commissions, and trading and mark to market gains.

Life Insurance Corporation (LIC) has made the most of the rally in the Adani group stocks in the December quarter and booked profits in three companies — Adani Ports and Special Economic Zone, flagship and incubator Adani Enterprises and Adani Energy Solutions.

During the quarter, the state-owned life insurer’s stake in Adani Ports went to 7.86 per cent from 9.07 per cent, in Adani Enterprises to 3.93 per cent from 4.23 per cent and in Adani Energy to 3 per cent from 3.68 per cent. It sold about 2.6 crore share in Adani Ports, 30 lakh shares in Adani Enterprises and 80 lakh shares in Adani Energy.

Shares of Life Insurance Corporation of India for the first time crossed the listing price on Tuesday, though it is still ruling below the allotted price for retail investors. After hitting an all-time high of ₹900 since listing, the stock on Tuesday closed at ₹892.50.

JustDial has reported robust revenue growth of 20 per cent y-o-y despite seasonally weak Q3. This beat our estimates of 17.7 per cent by 200bps. Growth was led by continued momentum in paid campaigns (up 8.6 pe cent y-o-y/1 per cent q-o-q) and total active listings (up 18.8 per cent y-o-y/4 per cent q-o-q).

Elara Securities has reiterated its ‘Buy’ call due to strong cash chest, improving operational parameters and robust deferred revenue growth, indicating better revenue growth outlook.

Federal Bank posted its highest ever quarterly profit of ₹1,006.74 crore in Q3 FY24, higher by 25 per cent on year and six per cent on quarter. Net Interest Income (NII) was up 8.53 per cent to ₹2,123.36 crore, also a quarterly record.

Net advances were up 18 per cent y-o-y and 3 per cent q-o-q to ₹1.99-lakh crore. Retail advances grew 20 per cent on year, business banking loans by 18 per cent, commercial banking loans 26 per cent and corporate advances by 14 per cent.

L&T delivered a sharp rise in order wins from Saudi Arabia after its improved focus on compliance with IKV (in-kingdom value) guidelines. BNP Paribas is expecting similar gains in the UAE and Qatar as compliance with ICV (in-country value added) rises with more localisation.

Aster DM Healthcare’s decision to separate its India and Gulf Cooperation Council (GCC) businesses has received a positive nod from the global and domestic proxy advisory firms such as Glass Lewis, IiAS, SES and ISS.

SES said that the transaction is in line with compliance and they do not identify any major concerns regarding the proposed segregation of the India and GCC businesses.

Himadri Speciality Chemical, a global speciality chemical conglomerate, on Tuesday, reported a 71.17 per cent year-on-year jump to ₹107.89 crore in its standalone net profit for the third quarter this fiscal.

In the third quarter last fiscal, the Kolkata-based company’s net profit had stood at ₹63.03 crore. The company’s revenue during the period under review rose 1.46 per cent y-o-y at ₹1052.51 crore (₹1,037.39 crore), according to a stock exchange filing.

The board of the Federal Bank will look at both internal and external candidates as suggested names to be submitted to the RBI to succeed MD and CEO Shyam Srinivasan following the end of his term in September 2024.

Relying on a robust medium-term GDP growth outlook and sound external finances, Fitch has affirmed India’s sovereign rating at ‘BBB-’ with stable outlook.

‘BBB-’ is last investment grade and stable outlook means it can upgraded to a notch above provided economic situations improve from here. Foreign investors rely on such rating before deciding about putting money in a country.

The short-term outlook is bullish for Bharat Petroleum Corporation (BPCL). The stock rose 2.85 per cent on Tuesday and closed on a strong note. 

Here are the intraday supports and resistances for widely traded stocks such as Reliance Industries, ITC, ONGC, Infosys, HDFC Bank, TCS, and SBI

Tokyo stocks opened higher on Wednesday, helped by a cheaper yen against the dollar, per a report by AFP. The benchmark Nikkei 225 index was up 0.85 percent, or 302.43 points, at 35,921.61 in early trade, while the broader Topix index added 0.65 percent, or 16.35 points, to 2,520.33, the report added. Overnight, Wall Street stocks fell as markets weighed mixed results from large banks while US Treasury yields and the dollar pushed higher.