A robust margin performance in the September quarter (Q2FY25) led to a 12 per cent rise in the stock of defence major Bharat Electronics (BEL). While the stock has given up most of those gains in the recent market correction, analysts are positive on the company due to its strong order book, new order inflows, and margin trajectory. The near-term trigger has been the operating performance in Q2FY25.
The listed information technology (IT) subsidiaries of engineering giant Larsen & Toubro (L&T), LTIMindtree (LTIM) and L&T Technology Services, have seen sharp upmoves over the past fortnight, with returns ranging from 14 to 18 per cent. Both have outperformed the peer index, the National Stock Exchange Nifty IT, which has gained about 8 per cent, while the benchmark Nifty 50 is up 4 per cent during this period.
With sentiment for the automotive (auto) sector turning positive, stocks of two-wheeler auto majors have been hitting their 52-week highs. Hero MotoCorp, Bajaj Auto, TVS Motor Company, and Eicher Motors recently reached their yearly highs on strong sales in the festival season and the expectation of faster growth rates ahead. Since the start of this month, listed two-wheeler majors have delivered returns in the 12-17 per cent range, compared to the 7 per cent gains for the S&P BSE Auto Index and 3 per cent for the benchmark S&P BSE Sensex.
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The stocks are largely from sectors such as chemicals, finance and cement, which struggled earlier but the worse seems to be behind them.
Stock Market News today, PSU banks: The year 2024 was a roller-coaster ride for Indian stock markets, marked by volatility driven by the Lok Sabha elections, Union Budget 2024, a slowdown in corporate earnings, and sticky inflation. Geopolitical tensions - particularly between Israel and Iran in West Asia - along with various stimulus announcements by China and yen carry trade rocked the equity markets throughout the year.
The rupee tumbled 3 per cent against the US dollar in 2024 as concerns over slower economic growth and a stronger greenback in global markets weighed, but it was among the least volatile currencies in the world and the headwinds may be less intense in the coming year.
Gold prices hit a fresh record high of Rs 84,900 per 10 grams in the national capital on Friday, driven by robust domestic demand and strong global cues, according to the All India Sarafa Association. The precious metal of 99.9 per cent purity continued its ascent for the third straight session, jumping by Rs 1,100 to hit a new peak of Rs 84,900 per 10 grams.
Risks emerging from the US have left automotive investors worried. US President Donald Trump has announced 25 per cent tariffs on automotive imports, while global electric carmaker Tesla has taken its first steps towards entering India. While these developments are sentimentally negative for related stocks, it may be too early to conclude the eventual impact, analysts said.
Mutual funds are sitting on a huge cash pile of Rs 22,908 crore (Rs 229.08 billion). The absolute cash levels for all existing equity funds rose by 17.4 per cent to Rs 16,642 crore (Rs 166.42 billion) in February 2008 from Rs 14,176 crore (Rs 141.76 billion), in January 2008. Even the cash as a percentage of the total corpus increased to 8.7 per cent in January 2008, from 7.6 per cent in December 2007. The rising cash levels indicate the cautious outlook of the fund managers.
The stock of auto component major Bosch was up 2.5 per cent on Wednesday and in the process hit its 52-week high. Expectations of higher volumes of medium and heavy commercial vehicles' (M&HCV), rise in content supplies on account of BS VI stage 2 implementation from April, and improved profitability are some of the positives for the stock. In addition to this, the company appointed a new managing director and joint managing director last week, which will come into effect from July 1.
After a strong run in the midcap and smallcap indices, which surged 46 per cent and 43 per cent, respectively, on the National Stock Exchange (NSE) during Samvat 2080, analysts suggest that the rally in these segments may pause to catch its breath in Samvat 2081.
'As the markets are expected to remain jittery in the near term, we advise investors to use this opportunity to enter quality largecaps from a long-term perspective.'
'Allocate up to 20 per cent of your core equity portfolio to quality funds.'
The Indian cement industry is hopeful of greener pastures after a long period of stress led by pricing pressures and other factors. The second half of FY25 is expected to bring respite due to price hikes, cost benefits and higher volumes, said analysts. The optimistic momentum also makes cement stocks attractive, analysts added, advising to buy dips following a period of bearish sentiment in these stocks.
The Nifty IT index, data shows, has outperformed the markets in each of the last four election years post the result. announcement.
'Those betting against PSUs will likely be punished in this upswing.'
The bias for the BSE benchmark index, technical charts suggest, is likely to remain bullish as long as the index holds above 75,600 levels for the rest of the year.
The Reserve Bank of India's (RBI's) record surplus transfer to the government has raised hopes among bond traders that the government might reduce its gross borrowing for the current financial year (2024-25/FY25) by up to Rs 1 trillion. The RBI approved a dividend of Rs 2.11 trillion for the central government for 2023-24, marking an increase of roughly 141 per cent from 2022-23 (FY23). In addition, the contingency risk buffer has been raised to 6.5 per cent from the previous 6 per cent.
The two-wheeler sector has been underperforming its peers on the volumes front for over five quarters now. Even in the March quarter, Bajaj Auto and Hero MotoCorp posted a 17-24 per cent YoY decline in volumes, the sharpest in the listed auto universe. The ongoing impact of frequent price hikes, all-time high fuel prices, and muted rural sentiment has led to the lacklustre showing by two-wheeler makers. What has aggravated the situation for two-wheeler companies, which get almost all their sales from the internal combustion engine or ICE-based units, is the traction for electric two-wheelers (EV).
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The bottom lines of several private sector banks have taken a hit following the recent guidelines released by the Reserve Bank of India (RBI) on alternate investment fund (AIF) investments. Last month, the RBI announced that regulated entities, such as banks, non-bank lenders, and home financiers, cannot invest in AIFs that have directly or indirectly invested in companies that have borrowed money from the lenders. In case an entity had already made such an investment, they must liquidate the investment or make 100 per cent provision, RBI had said.
The benchmark National Stock Exchange Nifty has rallied 4 per cent, or 750 points, from this month's low to end at 19,732 on week ending November 17. Technical analysts say the market could consolidate around the current levels as it is nearing the resistance zone. "The near-term uptrend status of the market remains intact, but there is a possibility of some more consolidation or minor weakness for the Nifty in the next one to two sessions.
IT services major LTIMindtree reported a net profit of Rs 1,100 crore for the fourth quarter of financial year 2023-24 (FY24), down 1.2 per cent year-on-year (Y-o-Y) from Rs 1,141 crore in the same quarter last financial year. Revenue grew 2.3 per cent Y-o-Y for the fourth quarter to Rs 8,892.9 crore. Sequentially, revenue was down 1.4 per cent.
10 non-bank and non-finance stocks from the BSE500 Index universe that offer an optimal blend of low valuation, reasonably robust revenue and earnings growth in recent quarters, a strong balance sheet, and most importantly, positive cash flow from their operations.
IT service company Wipro on Friday reported 7.8 per cent year-on-year decline in its consolidated net profit for the March quarter to about Rs 2834.6 crore, and cautioned that the macroeconomic environment remains "uncertain". The Bengaluru-headquartered company, which recently saw a change of guard with Srinivas Pallia taking over at the helm as the new chief executive officer, has given an IT Services revenue growth guidance in the (-)1.5 per cent to +0.5 per cent band for June quarter on a constant currency basis.
The rupee depreciated by 9 paise and settled at its all-time low level of 83.13 against the US dollar on Wednesday, weighed down by a surge in crude oil prices and strong American currency. Forex traders said the Indian rupee depreciated as the US dollar rose to the highest levels in six months. Moreover, elevated crude oil prices also weighed on rupee.
Among the Sensex firms, Tech Mahindra, Tata Motors, Bharti Airtel, Wipro, Bajaj Finserv, HCL Technologies, Bajaj Finance, Larsen & Toubro, Mahindra & Mahindra and UltraTech Cement were the biggest laggards. IndusInd Bank, Power Grid, HDFC Bank, ICICI Bank, NTPC, Reliance Industries, HDFC and Tata Steel were the prominent winners.
'Some risks to this market rally include inflation, erratic weather conditions, rising crude prices, slowing global growth and the resultant impact on domestic exports, escalation in geopolitical tensions.'
A likely turnaround in profitability margins in the March quarter (Q4FY23) will not be enough to lift the outlook for paint stocks due to volatile crude oil prices and rising competition in the sector, analysts say. Hence, they advise investors to avoid the sector over the short-to-medium term despite the heavy correction in the stocks since last year. Shares of Asian Paints, Berger Paints, Indigo Paints, Nerolac and Pidilite have shed 6-32 per cent over the last 6 months versus a 3 per cent rise in the benchmark Sensex.
The recent equity market weakness has sobered up investor mood, but the coming festive season is keeping analysts upbeat on stocks related to the consumption basket. Among the lot, fast-moving consumer goods (FMCG), retail, and consumer electronics segments are expected to do well over the next few months, and investors should thus selectively take bets in these pockets, analysts suggest. "We expect good volume growth for the FMCG sector during the festive season with some improvement in rural demand.
Swift gains on Dalal Street this year have also led to a sharp surge in shares of equity market intermediaries like depositories, exchanges, and registrar and transfer Agents (RTAs). The stock prices of BSE, CDSL, CAMS, and KFin Technologies are up 24-283 per cent so far in 2023 when compared to a 9 per cent rise in the benchmark Nifty index. With the market buoyancy expected to keep up the pace, analysts believe these stocks are a good long-term bet despite the sharp rally, which can trigger an intermittent correction.
Bajaj Auto's market capitalisation (market cap) hit Rs 2 trillion mark for the first time. The stock of the two and three-wheeler major rallied 6 per cent to hit a new high of Rs 7,420 on the BSE in Tuesday's (January 9) intraday trade after its board approved Rs 4,000 crore share buyback at Rs 10,000 per share. The stock ended the day at Rs 7,093.75, up 1.55 per cent and its market cap a shade above Rs 2 trillion.
Auto industry volumes have grown by 2.5 per cent overall, led by domestic sales of three-wheelers, two-wheelers and passenger vehicles (PVs) in the first quarter of this financial year. Analysts predict an 18 per cent growth in revenues for automotive original equipment manufacturers (OEMs) and profit growth of 69 per cent year-on-year (YoY). However, on a sequential basis, a decline in revenues as well as earnings before interest, taxes, depreciation, and amortisation (Ebitda) margins is expected.
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Despite multiple headwinds at the start of 2023, the Indian markets delivered a strong performance, posting 19-20 per cent growth for the year. Even as new records were set, investor sentiment remains strong going into 2024, given the lower inflation, expectations of steady to lower interest rates, higher economic growth, and strong inflows. However, the overriding concern for most brokerages is valuations.
The rupee rose by 12 paise to close at 79.78 against the US dollar on Monday due to a weak dollar in overseas markets and an improved appetite for riskier assets. Stronger regional currencies also supported the rupee sentiment ahead of the US Fed policy decision on Wednesday. Weak domestic equities and FII outflows, however, capped sharp gains. At the inter-bank forex market, the local unit opened at 79.86 against the greenback and moved in a range of 79.70 to 79.87 in the day trade.
Strong Q3 brings Infosys comfort amid macro risks.
Logistic players have seen a sharp correction at the bourses over the past six months as intense competition from new-age-tech startups, higher freight rates, and weak macros dented listed players' growth outlook. Analysts warn that the emergence of tech-based startups could weigh on organised players' profit-pool, and can potentially erode their market share. Thus, a stock-specific strategy would be prudent at this juncture with focus on companies that are rapidly innovating and investing in technology.
The equity cult has grown at a rapid pace in India in the last few years, with retail investors latching on to the stock markets like never before. At 126.6 million, the number of dematerialised (demat) accounts, where investors hold their securities in electronic form for trading purposes, are at record high levels. The growth rate, on an annualised basis, stood at 27 per cent in 2022-2023, up from barely 6 per cent a decade ago.
