The trends of the major indices in the course of the week’s trading are given in the table below:
Foreign institutional investors (FIIs) have extended their selling trend for the past two months, marking a significant outflow. FIIs have offloaded stocks and assets worth more than Rs25,000 crores this month. This continuous selling spree aligns with global developments, particularly the surge in US Treasury yields to multi-year highs and the US dollar's ascent to a 10-month peak. These events have stirred concerns about persistently high-interest rates and their potential repercussions on the global economy.
Source: NSE
The concluding trading day the Indian market went up, following a rally in the US market and positive GDP data from Britain. However, the market is facing stiff resistance at higher levels and a lack of triggers to overcome the bears. The ongoing trend of substantial foreign investor sell-offs combined with global factors like surging US bond yields and escalating crude oil prices paints a bearish outlook for the near-term performance of Indian markets.
Rising bond yields introduce an element of instability and valuation apprehension within the stock market because bonds and stocks vie for investor capital. Elevated 10-year bond yields typically present challenges for technology stocks. Tech companies often attract investors seeking substantial growth potential, even if their present earnings are modest or non-existent due to their focus on expansion. However, as bond yields ascend, the risk-free returns associated with bonds start to rival the distant potential profits of tech stocks. Additionally, higher bond yields, accompanied by increased borrowing costs, can weigh on businesses that rely on loans for their operations.
The 10-year yield on US Government bonds has already surpassed levels not seen in two decades, currently resting at a 16-year peak reflecting the growing anticipation that the Federal Reserve will persist with higher interest rates to combat inflation and bring it in line with the targeted 2%. This trend, while stirring ripples in global financial markets, is expected to have a relatively limited impact on the Indian market. This is underpinned by several factors that indicate a certain level of resilience in the Indian financial landscape.
While the rising US bond yield has an impact on global markets, its effect on the Indian market is projected to be relatively marginal. According to a recent report from CLSA, India's sector concentration remains among the lowest compared to other emerging markets, This diversification across various sectors cushions the overall impact of rising bond yields. Unlike other emerging markets heavily reliant on specific sectors, India's broader spectrum of industries provides a degree of insulation. India has been on a consistent path of economic reform and liberalization over the years. Regulatory policies and fiscal measures have been put in place to mitigate vulnerabilities and maintain financial stability. Moreover, the Indian government and central bank have demonstrated a proactive stance in managing economic challenges. Lastly, the Indian economy is characterized by a substantial domestic demand base. This inherent strength helps counterbalance the impact of external factors, such as rising US bond yields. A robust domestic market provides stability even when international financial conditions become turbulent.
India still remains under the shadow of a looming threat posed by the benchmark Brent crude contract, which recently surged beyond the $97.50 per barrel mark. This price point represents its highest level in nearly a year, primarily attributed to a sharp decline in crude stocks within the United States. This reduction has heightened concerns regarding the tight global supply of crude oil, causing a dent in investors' risk appetite.
Despite the optimism stemming from JPMorgan's decision to include India in its emerging market debt index, these factors have somewhat tempered investor enthusiasm. This cautious sentiment somewhat offsets the positive implications of India's inclusion in JPMorgan's index.
On another note, India has found itself on the watchlist of the FTSE Russell for possible inclusion in the FTSE Emerging Markets Government Bond Index. As of 31 August 2023, the GBI-EM GD had a benchmarked Asset Under Management (AUM) of $236 billion. Interestingly, the FTSE Emerging Markets Government Bond Index - Capped (EMGBI-Capped) boasted a significantly larger total AUM of $1,477 billion by the end of August. This stark contrast highlights the substantial difference in scale between these two influential bond indices. Top Gainers and Losers of the major indices for the week are given in the table below:
Capacity Expansion / New Ventures
Kewal Kiran Clothing launched its first exclusive boys wear brand Junior Killer.
Cera Sanitaryware manufacturing capacity of faucetware plant has been increased from 3 Lakh pieces per month to 4 Lakh pieces per month.
Shyam Metalics will make aluminium foil for lithium-ion cell manufacturing.
Alkem Laboratories signed a co-development and license agreement with Biotech company Biosergen AB for BSG005, which is used for the treatment of severe and difficult-to-treat invasive fungal diseases.
Oriental Rail Infrastructure has received approval for expansion of wagon capacity of upto 2400 per year.
Poonawalla Fincorp received RBI nod to issue co-branded credit card with IndusInd Bank.
Infosys launched industry cloud to catalyse digital transformation of the commercial airline industry.
Dixon Technologies unit entered into an agreement with Xiaomi for manufacturing of smart phones and other related products for Xiaomi.
GE shipping has contracted to sell its 2006 built supramax dry bulk carrier.
Joint Ventures / Collaborations
PFC transferred its subsidiary Ananthpuram Kurnool Transmission to Power Grid.
Aurobindo Pharma unit entered into a licence agreement with Hilleman laboratories Singapore to manufacture and commercialise pentavalent vaccine candidate used in children vaccination.
Cipla introduced drone-powered critical medicine delivery in Himachal Pradesh.
Order Wins
North Western railway plans to implement the Kavach anti-collision system developed by HBL power system.
Niraj Cement Structurals received work order from Mumbai Metropolitan Region Development Authority (MMRDA) worth Rs220.89 crore.
Zen Technologies received order worth Rs1,467 crore.
Vishnu Prakash R Punglia received LoA for a project worth Rs634.41 crore from Madhya Pradesh Jal Nigam.
Ahluwalia Contracts received project worth for Rs832.40 crore from Max Life Hospitals.
Alphalogic Industries won order worth Rs70 lakhs to design, manufacture, supply and installation of storage racking system from Scootsy Logistics (Swiggy).
Bharat Forge and Tata Advance System will supply 300 ATGS to Indian Army with an project estimated cost of Rs3000 crore.
KSB received an order for 800 solar water pumping systems from department of agriculture, Uttar Pradesh.
Reliance Jio continued to gain subscribers at the fastest pace while Vodafone Idea continued to lose subscribers.
Acquisitions
Shree Renuka Sugars entered into binding agreements for acquisition of 100% of the equity shares of Anamika Sugar.
Fund Raising
Likhitha Infrastructure Limited approved fund raising of Rs125 crore by QIP.
Apar Industries board approved fund raise of Rs1,000 crore via issuance of equity shares, other instruments.
Other Announcements
SJVN has accorded its in-principle approval for monetisation of partial earnings of the Nathpa Jhakri Hydro Power Station through Securitisation of its Future Return on Equity.
MCX will go live on new tech platform from October 1, new tech platform being serviced by TCS. MCX will need SEBI and board nod to go live on new tech platform from October 1.
Coal India received revised notice from central trade unions for three-day strike.
ONGC & Oil India rise amid increase in crude price, brent rises above $97 per barrel.
Indian Government extended RoDTEP Export Benefits Scheme until June 2024.
ONGC & Oil India rise amid increase in crude price, brent rises above $97 per barrel.
IPO Listed & Upcoming IPO
Plaza Wires - Plaza Wires (Plaza) is into wires and low tension (LT) aluminium cables and fast-moving electrical goods (FMEG) under the flagship brand ‘Plaza Cables’ and home brands such as ‘Action Wires’ and ‘PCG’. You can read its IPO review
here.
JSW Infrastructure - JSW Infrastructure (JSW Infra) is the fastest-growing port-related infrastructure company. You can read its IPO review
here.
Updater Services Ltd - Updater is a platform offering integrated facilities management (IFM) services and business support services (BSS) to its customers, with a pan-India presence. You can read its IPO review
here.
Valiant Laboratories Ltd : Valiant Laboratories (Valiant) is an active pharmaceutical ingredients (API)/ bulk drug manufacturing company having focus on manufacturing of paracetamol. You can read its IPO review
here.
Insider Buying
Krishana Phoschem promoter bought net 30,950 shares through open market. Venus Pipes and Tubes promoter bought net 8,750 shares through open market. Stel Holdings promoter bought net 9,286 shares through open market. Sangam (India) %) insiders bought net 23,881 shares through open market. Action Construction Equipment insider bought net 2,600 shares through open market. Maharashtra Seamless promoter bought net 31,800 shares through open market. Venus Pipes and Tubes promoter bought net 15,500 shares through open market. Eclerx Services insiders bought net 1,929 shares through open market. Usha Martin Promoter bought net 80,000 shares through open market. Subex KMP sold net 100,000 shares through open market. Action Construction Equipmentinsider bought net 4,500 shares through open market. Anant Raj Promoter bought net 297,450 shares through open market. Krishana Phoschem Promoter bought net 31,810 shares through open market.
Insider Selling
Xpro India director sold net 1,300 shares through open market. DB Realty Promoter sold net 10,052 shares through open market. Praj Industries director sold net 70,000 shares through open market. ADF Foods promoter sold net 10,304 shares through open market. HLE Glascoat Promoter sold net 1,009,521 shares through open market. Subex KMP sold net 100,000 shares through open market. Advanced Enzyme technologies Promoter sold net 32,319 shares through open market. Page Industries Promoter sold net 5,792 shares through open market. ADF Foods Promoter sold net 5,882 shares through open market. India Cements insiders sold net 810,000 shares through open market. Pidilite Industries Promoter sold net 8,000 shares through open market. Rama Steel Tubes Promoter sold net 14,000,000 shares through open market.
