Share Market Highlights 05 January 2024: Sensex climbs 178 pts to settle at 72,026; Nifty closes at 21,711

Benchmark stock indices Sensex and Nifty closed higher for a second straight day on Friday, following gains in IT, tech and capital goods shares amid fresh foreign capital inflows.

After slipping briefly during the late afternoon trade, the 30-share BSE Sensex made a quick recovery and jumped 178.58 points or 0.25 per cent to settle at 72,026.15. During the day, it soared 308.91 points or 0.42 per cent to 72,156.48.

The Nifty climbed 52.20 points or 0.24 per cent to 21,710.80.

Among the Sensex firms, Larsen & Toubro, Tata Consultancy Services, Infosys, HCL Technologies, Hindustan Unilever, Axis Bank, ICICI Bank and Wipro were the major gainers.

Nestle India, Asian Paints, JSW Steel, Kotak Mahindra Bank and HDFC Bank were among the losers.

The Indian rupee closed stronger on Friday, supported by dollar inflows even as its Asian peers slipped heading into the release of key U.S. labour market data due later in the day.

The rupee closed at 83.15 against the U.S. dollar, higher by 0.1% compared with its close at 83.23 in the previous session. The local unit was little changed week-on-week.

The rupee has made a sturdier start to 2024 compared to its Asian peers, most of which fell on Friday and were down week-on-week, as the dollar gained amid a paring of early rate cut expectations in the United States.

Karnataka Bank (KBL) and Satin Creditcare Network Limited (SCNL) have entered into a Co-Lending arrangement to provide financial support to Joint Liability Groups (JLG) of economically active women in both rural and semi-urban areas and to give impetus to the micro credit facilities segment of the country.

State-run GAIL (India) on Friday said that it has signed a long-term liquefied natural gas (LNG) contract with Vitol Asia Pte for a supply of around one million tonnes per annum for about 10 years, commencing 2026.

Godrej Industries (Chemicals Division) has signed a Nonbinding Memorandum of Understanding (MoU) with the Government of Gujarat. As part of the MoU, the Company may plan to invest ₹600 Crore over the next four-years on the significant expansion in Valia with employment of around 250.

Gateway Distriparks Limited informed the exchanges that BSE Limited has levied penalty of ₹1,00,000 (excluding Goods & Service Tax@18%) for noncompliance of Regulation 60(2) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulation”).

The stock closed at ₹110.95 on the NSE, positive by 2.49%.

Ultratech Cement board has allotted 1,000 equity shares of ₹10 to Option Grantees upon exercise of stock options under the company’s Employee Stock Option Scheme. 

The stock trades at ₹10,009 on the NSE, down by 0.06 per cent.

Grindwell Norton has received an intimation from the GST authority for the period 2020-2021 proposing to demand tax, interest and impose penalty, amounting to ₹11.26 crore in the matter of Input Tax Credit (ITC). The company will file a reply to the show cause notice before the Adjudicating Authority.

The stock trades at ₹2,333.30 on the NSE, down by 0.53%.

Major gainers:

Adani Ports (2.65%); TCS (2%); SBI Life (1.70%); LTIMindtree (1.37%); Axis Bank (1.34%)

Major losers:

Nestle India (-1.64%); Britannia (-1.61%); Sun Pharma (-1.19%); UPL (-1.12%); Cipla (-1.05%)

A total of 2,091 stocks advanced on the BSE at 3 pm on Friday, against 1,704 stocks that declined; 115 stocks remain unchanged. The total stocks traded were 3,910. The number of stocks that recorded a 52-week high was 482, and 8 hit a 52-week low.

Supriya Lifescience Ltd said its manufacturing site in Lote Parshuram has received a Good Manufacturing Practice (GMP) certificate from the Regulatory Authority of Brazil, ANVISA. 

The stock trades at ₹316.20 on the NSE, down by 1.80%.

Travel & Tourism – Jinesh Joshi – Research Analyst, Prabhudas Lilladher Pvt Ltd

Luggage: Our checks have revealed a soft demand environment in the traditional dealer-distribution channel. However, an uptick in the online format has been good. Backed by festivities and seasonality (travel & wedding), we expect VIP/Safari to report 5 per cent/25 per cent growth in top-line. Further, competitive pricing is likely to offset the benefit of benign RM prices and result in GM of 52 per cent/45 per cent for VIP/Safari. 

Hotels: In a seasonally strong quarter, we expect Chalet/ Lemon Tree to report ARR of Rs 11,185/Rs 6,406 respectively. While Chalet would stand to benefit from operationalisation of 88 rooms at Novotel, Pune; Lemon Tree’s performance would get a boost from the inauguration of 669 rooms at Aurika, Mumbai. Overall, we expect Chalet and Lemon Tree to report top-line growth of 22.6 per cent/19.6 per cent with an EBITDA margin of 43.4 per cent/47.9 per cent respectively. 

Aviation: We expect Indigo to report load factor of 85.1 per cent and yield of Rs 5.3 (in-line with 3QFY23) buoyed by festivities and the World Cup. We expect gross spread of Rs 3.19 (RASK less fuel CASK) aided by 5.9 per cent YoY fall in ATF prices (up 10.8% QoQ to Rs 113 per litre in 3QFY24). Overall, we expect Indigo to report revenues of Rs181 billion (up 21.3% YoY) with EBITDAR margin of 24.8% (adjusted for forex impact). 

Top picks: Lemon Tree remains our preferred pick in the travel & tourism space given its crown jewel asset Aurika, Mumbai. In the luggage space, we prefer Safari Industries, given the recent correction which provides a good entry point

Stylam Industries has placed orders for major Plant & Machinery for the new laminate plant in Panchkula district (Haryana). The stock trades at ₹1,636 on the BSE, down by 1.31 per cent.

APL Apollo Tubes stock has surged by 5.11 per cent on the NSE, trading at ₹1,525.05. The company posted sales volume of 6,03,659 tonnes in Q3FY24, compared to 6,05,049 tonnes in Q3FY23 and 6,74,761 tonnes in Q2FY24.

Kotak Institutional Equities: We expect most non-banks under coverage to deliver 6-39 per cent growth in earnings, driven by healthy 19-43 per cent loan growth (excluding 6 per cent for LICHF, decline for LTFH). This is partially offset by 40-160 bps yoy (13-35 bps qoq) compression in NIM for most, reflecting higher cost of refinance and rate transmission by banks. While we do not find red flags in most asset classes, likely stress in unsecured loans, tractors and a rise in early delinquencies down South will dominate discussion with investors. Retain positive stance; Shriram, LICHF and Aavas/Home First in affordable HFCs remain our top picks.

A strong quarter for the non-lenders: 3QFY24 has been a strong quarter generally for capital market players, as reflected in market returns (Nifty-100 up ~12% in 3Q), strong retail flows and bond issuances (up 30% qoq). Among AMCs, equity AAUM growth has been much stronger for HDFC/ Nippon (11-12% qoq), whereas it was much weaker for ABSL/ UTI (4-5% qoq), reflecting the underlying fund performance. CAMS and Kfin are likely to benefit from operating leverage in the core MF RTA business, with a growing contribution from the non-MF businesses. Rating agencies should gain from sequentially stronger bond-raising activity, but non-rating revenues are harder to predict given the linkages with global markets.

Kotak Institutional Equities: We expect earnings growth for banks to remain healthy at ~17% yoy, but operating profit growth is weak as the NIM contraction cycle is underway. Non-banks under coverage will continue to deliver strong qoq loan growth. Earnings growth is supported by lower provisions, as asset quality remains in a healthy spot for all types of lenders. A key conversation would be on NIM progression and deposit mobilisation trends.

Operating profit growth witnessing a sharp slowdown

3QFY24 is likely to be an extension of the theme that played in 1HFY24. Trends in operating profit growth are likely to be weak, though we expect earnings growth to have support from lower provisions. The provisional business data releases by a cross-section of banks suggests that loan growth has been ahead of deposit growth. Treasury gains are likely to be negligible, and asset quality is likely to remain in a sweet spot, leading to lower slippage, but recovery and upgrades are likely to be lower as well. We expect banks to report a 15-20 bps decline in NIMs. While loan yields have limited room for expansion, we see deposit costs likely to re-price higher. A key discussion would be trends in deposit mobilisation, as it has lagged loan growth. This would have a bearing on our NIM forecasts, given the sensitivity of the policy rates on NIM.

We prefer to own large banks after the rally in mid-tier banks. The improvement in asset-quality ratios leading to lower credit costs and normalization of growth has played out when we look at the valuation.

Gujarat Toolroom Ltd (India) has executed an order valued at ₹55 crore, achieving a bottom line of ₹5.5 crore. The stock trades at ₹57.98 on the BSE, up by 4.51 per cent.

The Centrum Capital board has approved buyback of up to 10 lakh fully paid-up equity shares of a face value of ₹10 each at a price of ₹300 per equity share payable in cash for an aggregate amount of up to ₹30 crore. The stock jumped 6.78 per cent on the NSE, and is trading at ₹31.50.

Mahamaya Steel Industries has redeemed ₹2 crore in the fifth tranch of 10,00,000 8% Redeemable Non-Convertible Non-Cumulative Preference Shares issued to Escort Finvest Pvt Ltd. 

The Mahamaya stock has declined by 2.13% on the NSE, and is trading at ₹112.40

Shree Cement stock down by 4.44% on the NSE, trading at ₹27,100. The company had announced a revamp of its corporate brand identity and launched multiple brand offerings, with ‘Bangur’ as the master brand.

NSE Nifty was up by 0.15 per cent or 32.60 points to 21,691.20, while the BSE Sensex was at 71,921.24, up by 0.11 per cent or 67.08 points.

Of the 3,860 stocks traded on BSE, 2,247 advanced, 1,492 declined and 121 stocks remained unchanged. 456 stocks hit 52 week high and 12 stocks hit 52 week low at 1 pm on Friday. 

Power Grid Corporation of India Limited has been declared as successful bidder under Tariff Based Competitive Bidding to establish Inter-State Transmission System for “Transmission Scheme for Solar Energy Zone in Bidar (2500 MW), Karnataka” on Build, Own, Operate and Transfer (BOOT) basis.

The stock trades at ₹242.45 on the NSE, up by 0.41%.

GlobalSpace Technologies has launched India’s First Anti- Stress Wearable ‘GoRoga’. 

The company’s stock surges by 4.99% on the BSE, trading at ₹18.09.

GAIL (India) Limited and Vital Asia Pte Ltd., has announced the signing of a Long Term LNG deal into India for a supply of approximately one million metric tons of LNG per annum for a period of about 10 years, commencing 2026. Under this deal, Vital will deliver LNG from its global LNG portfolio to GAIL in India on a pan-India basis. 

GAIL stock rises by 2.02% on the NSE, trading at ₹166.45.

Alembic Pharmaceuticals informed that business operations at the Company’s manufacturing facilities at Namthang, South Sikkim, y is still in process of restoration of the said facilities and may soon resume operations in a gradual / phased manner and anticipate to operate at regular capacities within two months. 

Alembic stock down by 0.64% on the NSE, trading at ₹804.

Brightcom Group stock down by 1.03% on the NSE, trading at ₹19.20.

Vijay Kancharla resigned as chief investment officer and executive director, effective January 2 due to personal reasons.

Diminishing lure for perpetual bonds is likely to prompt Indian state-run banks switch to the equity market for raising funds in coming months, five banking sources told Reuters this week.

Indian banks, including top lender State Bank of India, have raised around Rs 8,700 crore through perpetual bonds so far this fiscal, just about a quarter of fiscal 2023, with most struggling to raise even the targeted amount at auctions.

“With deposit rates inching higher, banks will have to pay a higher coupon on their debt securities, especially with mutual funds staying away from investing in perpetual debt,” a senior official at a large state-run bank said.

Market regulator Securities Exchange Board of India had in March 2021 said that additional Tier 1 bonds would be considered to have a deemed maturity of 100 years, starting April 2023.

“This move has literally ended mutual fund investments in such papers, making fundraising more difficult,” a trader with a private bank said.

Demand for these bonds fell further last year, after Credit Suisse wrote off around $17 billion of its additional Tier 1 debt amid its rescue merger with UBS.

“There is a possibility that banks may tap the equity route more for fundraising as valuations will improve further, while getting large quantum with AT-I bonds has become difficult,” another banker said.

The sources asked to remain anonymous as they were not authorised to speak to the media.

Last month, state-run lenders Bank of India and Indian Bank raised Rs 4,500 crore and Rs 4,000 crore, respectively, via qualified institutional placement (QIP) of shares.

A QIP enables fundraising by offering equity shares to qualified buyers without a public offering.

Union Bank of India had raised Rs 5,000 crore through a QIP in August.

Last week, Punjab National Bank approved raising aggregate Rs 7,500 crore via equity.

The Nifty PSU Bank index rallied 32.30% in 2023, outperforming the bank index and financial services index.

“State-run banks have cleaned up their balance sheets well and their valuations are still at a discount,” said Vinod Nair, head of research at Geojit Financial Services. - Reuters

Top gainers of Nifty Realty stocks:

Phoenix Mills (5.32%)

Swan Energy (2.33%)

Brigade (1.85%)

Lodha (1.37%)

Shakti Pumps stock rises by 1.55% on the NSE, trading at ₹1,025. The company had received 9th Patent for “Solar Flour Mill” from the Government of India.

BEML stock rises by 3.93% on the NSE, trading at ₹3,002.05 following receipt of contract from the Defence Ministry.

Jupiter Wagons has received an order from the Ministry of Defence for the manufacturing and supply of 697 Bogie Open Military (BOM) Wagons.

The contract is worth Rs 473 crore.

The Bogie Open Military wagons, serve as specialist wagons crucial for the mobilization of Indian Army units. These wagons play a pivotal role in transporting various military assets to operational areas. This critical rolling stock ensures the swift and simultaneous induction of units and equipment as well as facilitates their movement for military exercises and station transfers.

Jupiter Wagons stock is up by 2.58% on the NSE, trading at ₹339.45.

Major gainers on the NSE at 12:

Adani Ports (2.88%); Adani Enterprises (1.56%); TCS (1.37%); Hero motocorp (1.34%); Wipro (1.26%)

Major losers:

Britannia (-1.78%); Sun Pharma (-1.38%); Nestle India (-1.33%); Divi’s Lab (-1.07%); HDFC Bank(-1.03%)

Stocks advanced on BSE at 12 noon on January 5, 2024, were 2,172 against 1,516 stocks that declined; 128 stocks remain unchanged. Total stocks traded were 3,816. The number of stocks that recorded a 52-week high was 443, and those that hit a 52-week low was 5.

According to Motilal Oswal Asset Management Company’s Global Market snapshot report, In December 2023, the Indian stock markets experienced a notable upturn, as evidenced by an 7.94% surge in the Nifty 50 index. While, all the major indexes gave positive returns in December 2023, The Nifty Next 50 index outperformed, leading the gains with an impressive growth of 11.09%. Nifty Smallcap 250 and Nifty Midcap 150 rose by 5.96% & 6.98% respectively, continuing their positive momentum.

The Board of Directors of Brookfield India Infrastructure Manager Private Ltd, acting in its capacity as the investment manager of India Infrastructure Trust, on Friday declared a total distribution of Rs. 2.8303 per Unit. 

The Record Date for the purpose of the payment of this distribution to the Unit holders has been fixed as January 13, 2024,.per the company’s regulatory filing.

This will be paid on or before Friday, January 19, 2024. 

The Indian Navy’s Mission Deployed Platforms responded swiftly to the hijacking attempt on board a Liberian-flagged bulk carrier after it received a message on the UKMTO portal indicating boarding by approximately five to six unknown armed personnel on Thursday evening, the Indian Navy said in an official statement on Friday.In response to the situation, the Indian Navy launched an Maritime Patrol Aircraft (MPA) and diverted INS Chennai, deployed for maritime security operations, to assist the vessel.

The aircraft overflew the vessel on Friday morning and established contact with the vessel, ascertaining the safety of the crew.

As per the Indian Navy, Naval aircraft is continuously monitoring the movement of the vessel and Indian warship INS Chennai is closing the vessel to render assistance.The overall situation is being closely monitored in coordination with other agencies and MNFs in the area, Indian Navy said. - ANI

Avenue Supermarts informed about appointment of Biswabrata Chakravorty as Group Chief Digital & Information Officer with effect from 5th January, 2024. 

Dmart stock trades at ₹3,913.20 on the NSE, up by 0.39%.

Services business activity rose at a faster pace in December, well above the long-term-average growth momentum

· The input price index fell, but in the face of strong demand, service providers raised output prices, leading to three-year high corporate margins.

The India Composite PMI shows that overall activity rose in December, driven more by service providers than manufacturers, said HSBC report

Madhav Marbles and Granites (18.74%)

Transindia Real Estate (13.07%)

Alok Industries (12.52%)

Kothari Products (12.41%)

The Grob Tea Company (10.96%)

“Even though a low VIX is usually accompanied by stability or a rising index, it is usually a worrying sign, as it suggests that traders are less prepared for unforeseen events. In fact through June 2023 until late December, 13 kept a lid on VIX, with sizable falls on the index failing to attract any panic, but instead finding buying interest to catapult prices to the new peaks that we are at now. We see the rise in VIX since late December as a positive as it prepares the traders for future shocks. Also, VIX is still not at a level that signals panic yet, but just high enough to sensitise the traders and improve the volatility expectations. That the recent fall did not call for a VIX beyond 17, the level seen during Jan-Mar when panic was the highest last year is suggestive that VIX could still ease off or even blow hot and cold for a while. This is in fact more dangerous to weekly traders than stock traders, as we may alternate between cheap straddles to expensive ones, week on week.”

Securitisation volumes witness modest decline; estimated at ~Rs. 38,000 crore in Q3 FY2024 compared to ~Rs. 46,000 in Q2 FY2024

· Securitisation volumes for 9M FY2024 estimated at ~Rs. 1.4 lakh crore

· RBI’s move to increase the capital requirements of lending institutions towards consumer credit and expectations of fall in interest rates in the near term hit the growth of securitisation volumes in Q3 FY2024

According to ICRA’s estimates, the overall securitisation volumes, originated mainly by non-banking financial companies (NBFCs) and housing finance companies (HFCs), stood at ~Rs. 38,000 crore in Q3 FY2024, reflecting a sequential de-growth of ~17% from ~Rs. 46,000 crore recorded in Q2 FY2024. The volumes for Q3 FY2024 also trailed ~Rs. 43,000 crore securitised in Q3 FY2023, mainly due to the exit of a large HFC from the securitisation market in the current fiscal. ICRA expects securitisation activity to pick up again and touch Rs. 50,000 crore in Q4 of the current fiscal, which is typically the busiest quarter of the year.

Mr. Abhishek Dafria, Senior Vice President and Group Head, Structured Finance Ratings, at ICRA, said: “The securitisation volumes in Q3 FY2024 failed to maintain the growth momentum witnessed in several recent quarters. ICRA believes that the RBI’s move to increase the capital requirements of lending institutions towards consumer credit, vide its circular in November 2023, affected the securitisation volumes for mainly unsecured loans to some extent as the banks and NBFCs formalised their internal policies. Further, some securitisation deals did not fructify as the originators are expecting reduction in the interest rates in the near term. Additionally, on-balance sheet liquidity of most entities remains healthy, providing necessary headroom to postpone the execution of securitisation deals to the next quarter. Nevertheless, new players continue to enter the securitisation market, which bodes well for development of a broader market in the future. ICRA remains bullish on the securitisation volumes for Q4 FY2024 and maintains our earlier estimate of annual securitisation volumes worth Rs. 1,90,000 crore for FY2024 

NTPC Limited has informed the Exchange regarding ‘orders received from GST Authorities’. The stock trades at ₹317.05 on the NSE, down by 0.02%.

Edelweiss Financial Services Limited has announced the public issue of Secured Redeemable Non-Convertible Debentures (“NCDs”) of the face value of ₹1,000 each for an amount up to ₹1,250 million (“Base Issue Size”), with a green shoe option of up to ₹1,250 million, cumulatively aggregating up to ₹2,500 million (“Issue Limit”) (“Issue”). There are ten series of NCDs carrying fixed coupons and having a tenure of 24 months, 36 months, 60 months, and 120 months with annual, monthly, and cumulative interest options. Effective annual yield for NCDs ranges from 8.94% p.a. to 10.46% p.a. The Issue is scheduled to open on January 09, 2024 and close on January 22, 2024.

Edelweiss stock trades at ₹78.45 on the NSE, down by 0.38%.

Wardwizard Innovations & Mobility Limited has dispatched 3,543 units of electric two-wheelers in December 2023. 

Wardwizard stock down by 1.02% on the BSE, trading at ₹56.30.

Trent Ltd has received Orders from the Joint Commissioner, Rajasthan and Assistant Commissioner of State Tax, Chhattisgarh, imposing penalty of Rs 39,596/- and Rs. 60,719/- respectively under the Goods and Services Tax Act, 2017. 

Trent stock is down by 0.26% on the NSE, trading at ₹3,060.

Adani Ports and Special Economic Zone hit a lifetime high of Rs 1154.70, in early trades. It is now up over 2 per cent on the NSE

Suzlon Group,has announced a new order win for the development of a 225 MW wind power project for Everrenew Energy Private. Suzlon will install 75 wind turbine generators (WTGs) with a Hybrid Lattice Tubular (HLT) tower and a rated capacity of 3 MW each at the client’s sites at Vengaimandalam, Trichy district and Ottapidaram, Tuticorin district in Tamil Nadu. This order is for the company’s larger rated 3 MW, S144-140m turbines from the 3 – 3.15 MW product series. As part of the agreement, Suzlon will supply the wind turbines (equipment supply) and supervise the project, including commissioning. Suzlon will also undertake comprehensive operations and maintenance services post-commissioning

The Bank Nifty index is trading higher. It is currently at 48,275, up 0.17 per cent. The advance/decline ratio is at 7:5. The bias is positive.

Crude oil futures traded higher on Friday morning as the minutes of the meeting of the US Federal Open Market Committee (FOMC) indicated interest rate cuts in 2024.

Lupin stock hit a 52-week high at 1,425, and currently trades at ₹1,391.40, down by 0.54% on the NSE.

KPI Green Energy’s subsidiary, KPIG Energia Private Limited, has received new order of 3 MW for executing solar power project under ‘Captive Power Producer (CPP)’ Segment of the Company.

KPI Green Energy stock rose 3.30% on the NSE, trading at ₹1,449.75.

Kay Cee Energy & Infra Limited gets listed on NSE Emerge today. The company is in Engineering, Procurement and Construction (“EPC”) business, providing specialized services of construction and commissioning of power transmission and distribution system. The public Issue was of ₹1,593.00 lakh at an issue price of ₹54 per share.

The rupee appreciated 5 paise to 83.19 against the US dollar in early trade on Friday, supported by positive domestic equities and foreign fund inflows.

The markets commenced on a positive trajectory on Friday morning. The NSE Nifty was up by 0.36 per cent or 77.05 points to 21,735.65, while the BSE Sensex was up by 0.37 per cent or 259.24 points to 72,107.32 at 10 am.

Aditya Birla Group’s flagship Grasim Industries set the price for the rights issue, approved in October, at Rs 1,812 per rights equity share.

ICRA Analytics:-

Indian equity markets snapped the two-day losing streak and closed with healthy gains despite having muted global cues following the recent U.S. Fed minutes that indicated rates would be held in the near future. Purchasing was observed across the sectors, with the real estate sector leading the way. Promising demand in the residential category, bolstered by healthy housing loan disbursement data released by banks, led to a significant increase in purchasing in the real estate sector.

Bond yields remained mostly steady due to a lack of fresh triggers as market participants awaited new supply through the weekly debt auction for further cues.

The yield on the 10-year benchmark paper (7.18% GS 2033) was unchanged to close at 7.22% as compared to the previous day’s close.

Nifty 50 is continuing to move higher. The index is getting a good follow-through buying. However, the pace of rise seems to be slow. Nifty is currently trading at 21,735, up 0.35 per cent. Read more here.

Economic growth is set to be a driving force in the Asia-Pacific (APAC) region in 2024, particularly in emerging markets (EMs), providing a favourable backdrop for various sectors, reported Fitch Ratings.

Mold-Tek Packaging Limited’s pharma division at the Company’s existing unit situated at Sultanpur, Telangana, India, will be inaugurated on Saturday, January 6.

The Commercial Production/ Commercial Operations at the said Pharma Division of Sultanpur unit will commence on or before 31st March 2024.

The company also announced that its new unit, situated at Cheyyar, Tamil Nadu, will be inaugurated on Jan 6.

Passenger traffic for Nov’23 registered a marginal growth MoM to 12.7mn. Dec’23 passenger traffic run rate implies ~13.9mn up 8% MoM. Industry PLF clocked 86.3% - up 170 bps MoM. Indigo’s PLF stood at ~85.6% (up 230bps MoM) while Air India’s PLF stood at ~84.8% (down 70bps MoM). Indigo lost market share during Nov’23, with its share at 61.8% (vs. 62.6% in Oct’23). Spicejet’s market share stood at 6.2% (vs. 5% in Oct’23). Airline fares witnessed a significant jump in 3Q given a seasonally strong quarter – up ~25%+ QoQ (as per JM fare tracker). ATF has begun experiencing price correction starting Nov’23. During Jan’24 price was further cut by ~INR4k. Despite this, overall ATF price during 3Q to remain elevated (up ~10.8% QoQ) owing to peak attained in Oct’23. PLF’s for the quarter are also expected to increase marginally from 2Q avg of 85% with spot PLF’s averaging at ~86%.

Sriram Iyer, Senior Research Analyst at Reliance Securities 

The Indian Rupee gained marginally against the Dollar this Thursday aided by dollar inflows.

However, gains were capped as most of its Asian peers continued to weaken against the Dollar as investors moderated their expectations of early U.S. rate cuts this year.

The Rupee finally settled at 83.2300 against the dollar, gaining by 0.05% compared with its close at 83.2750 in the previous session.

However, the range remained tight as most investors awaited the nonfarm payrolls which could provide cues on the monetary policy outlook from the U.S. Fed.

Amongst other domestic pair, EURINR and GBPINR gained, while JPYINR fell this Thursday’s session.

From an intraday perspective, the Indian Rupee could start flat this Friday morning as the traders look to cues from the jobs data on the future monetary policy outlook.

An uptick in U.S. Treasury Yields and weaker Asian peers will cap gains.

The NDF market is indicating that the Rupee could open around 83.2300 to 83.2400 against the Dollar compared with 83.2300 in the previous session and the range for the session is between 83.1800 to 83.3100.

Among other pairs, we expect GBPINR, the EURINR and the JPYINR spot pairs to remain range bound this Friday’s trade.

Moving onto the overseas markets, the U.S. Dollar Index eased on Thursday following four days of gains due to mixed economic data ahead of tomorrow’s jobs report.

The latest data showed weekly claims fell more than expected at the end of 2023, while US private businesses hired more workers than expected in December.

The Euro gained against the Dollar on Thursday Germany and France witnessed increases in their inflation rates for December, primarily due to escalating energy costs.

Rise in inflation raised bets of a delay in rate cuts from ECB.

The Sterling gained, while the Yen tumbled against the greenback on Thursday as traders dialled back aggressive bets on US Federal Reserve interest rate cuts this year.

From an intraday perspective, the U.S. Dollar Index started flat this early Friday morning in Asian trading as traders looked to cues from the nonfarm payrolls tonight.

A poll forecasted that 170,000 jobs were created in December, fewer than the 199,000 in November.

Intraday range for the Dollar Index is $102.20 to $102.60.

The Euro and the Sterling gained, while and the Yen continued to weaken against the Dollar on Friday morning trading.

German retail sales and Eurozone inflation numbers will be key drivers.

Intraday range for the Euro is $1.0915 to $ 1.0975, while that for the Sterling is $1.2650 to $1.2725 and for the Yen is $143.30 to $145.35.

Sriram Iyer, Senior Research Analyst at Reliance Securities 

LME and domestic copper prices eased on Thursday pressured by a rebound in the US dollar and some profit-taking.

Prices fell as traders continued to gauge the extent of the Fed’s loosening this year.

However, a sharp decline in the official Chinese manufacturing PMI offset against an improved expansion according to the broader Caixin data, raising uncertainty over the country’s copper outlook.

Most metals on LME also ended in the red on Thursday, with aluminium, zinc and nickel falling over 1%.

From an intraday perspective, international copper prices have started marginally stronger early Friday morning in Asian trade as traders await jobs data for further cues on the monetary policy outlook from the U.S. Fed.

Intraday, the range for COMEX copper is $3.815 to $3.880, while that for MCX copper January is 722 to 730.

Most metals on LME started with small cuts this early Thursday morning in Asian trade.

Intraday, the range for LME zinc is $2,515 to $2,585, while that for MCX zinc January is 225 to 229.

Sriram Iyer, Senior Research Analyst at Reliance Securities 

International and domestic gold and silver rebounded marginally after the Dollar eased on Thursday after mixed data.

The latest data showed weekly claims fell more than expected at the end of 2023, while US private businesses hired more workers than expected in December.

However, the U.S. Treasury yields gained on Thursday as the latest economic data provided conflicting signs over the Federal Reserve’s upcoming rate decisions.

From an intraday perspective, international gold and silver prices have started with small gains this early Friday morning in Asian trade as investors focussed on a key employment report due later in the day for more rate clues.

A poll forecasted that 170,000 jobs were created in December, fewer than the 199,000 in November.

Internationally, the range for COMEX gold February is $2,040 to $2,060, while that for COMEX silver March is $22.960 to $23.400.

Domestically, the range for MCX gold February is 62,470 to 62,815, while that for MCX silver March is 71,800 to 72,675.

Sriram Iyer of Reliance Securities 

International and domestic crude oil gave up gains and settled weaker on Thursday after a bearish inventories report from the EIA showing builds in gasoline and distillates stocks in excess of 10 million barrels each.

Additionally, stocks at Cushing, Okla., the NYMEX delivery hub, increased by 706,000 barrels to 34.7 million barrels and weighed on sentiments.

Meanwhile, crude inventories fell by 5.5 million barrels and capped downside.

From an intraday perspective, international markets have started with small gains this early Friday morning in Asian trade.

Signs of weakening US demand offset supply disruptions from Libya.

So, NYMEX February futures could remain range and trade in band of $70.85 to $73.75, while MCX January crude futures could trade within 5,925 to 6,155.

International and domestic gas futures rose surged higher by over 5% on Thursday on colder weather outlook in January.

Upside was capped after EIA reported a 14 Bcf draw on storage for the week ended December 29 that left inventories 18.9% above the year-earlier level and 13% above the five-year average.

From an intraday perspective, international markets have started with weaker this early Friday morning in Asian trade after a report showing an even smaller-than-expected reduction last week in natural gas inventories.

However, cooler weather predictions for January could cap downside.

Intraday, NYMEX February futures could trade in a broad trading band of $2.715 to $2.895, while MCX January crude futures could trade within 223 to 241.

HDFC Bank stock trades at ₹1,679.95 on the NSE, down by 0.64%.

The Bank’s gross advances aggregated to approximately ₹ 24,695 billion as of December 31, 2023, a growth of around 62.4% over ₹ 15,205 billion as of December 31, 2022 and a growth of around 4.9% over ₹ 23,546 billion as of September 30, 2023. Grossing up for transfers through inter-bank participation certificates and bills rediscounted, the Bank’s advances grew by around 60.7% over December 31, 2022 and around 3.8% over September 30, 2023.

7NR

Consolidation of Shares 

ELEMARB

Buy Back of Shares 

FISCHER

E.G.M. 

KANANIIND

E.G.M. 

MLINDLTD

Bonus issue 1:50 

NESTLEIND

Stock Split From Rs.10/- to Rs.1/-

PGIL

Stock Split From Rs.10/- to Rs.5/

ADCON

Right Issue of Equity Shares

HIMFIBP

General

KSCL

Buy Back of SharesMICGeneral

MUNCAPM

Preferential Issue of shares

MYSPAPE

Quarterly Results

QGO

General

STCORP

Quarterly Results

Crude oil futures traded higher on Friday morning as the minutes of the meeting of the US Federal Open Market Committee (FOMC) indicated interest rate cuts in 2024. At 9.34 am on Friday, March Brent oil futures were at $77.91, up by 0.41 per cent; and February crude oil futures on WTI (West Texas Intermediate) were at $72.61, up by 0.58 per cent. January crude oil futures were trading at ₹6054 on Multi Commodity Exchange (MCX) in the initial trading hour of Friday morning against the previous close of ₹6034, up by 0.33 per cent; and February futures were trading at ₹6085 as against the previous close of ₹6067, up by 0.30 per cent.

US market ended mostly lower overnight while the 10-year Treasury yield edged closer to 4% as strong labor market data raised fresh uncertainty about the pace of potential rate cuts this year. Asian Market were mixed Friday after selling pressure weakened US stocks and bonds as robust signals from the labor market weighed on expectations for interest rate cuts. Indian market may struggle for direction at open on Friday, tracking mixed cues from global markets as bond yields rose on doubts about how soon the Federal Reserve could start cutting interest rates. On the stock specific news, Aditya Birla Group’s flagship Grasim Industries set the price for the rights issue, approved in October, at Rs 1,812 per rights equity share as the cement maker plans to raise funds not exceeding Rs 4,000 crore to fund the ongoing capital expenditure plan and repay existing borrowings.

The benchmark index rebounded strongly in the previous trading session. It witnessed a gap-up of 80 points and continued to trend in that direction for the remaining part of the trading session to close in the upper quartile of the trading range after 2 consecutive days of selling. The index is anticipated to attract bullish strength provided the immediate pivotal support near 21540 remains intact on a closing basis going forward. 

Supp: 21650-21540-21440

Res: 21675-21720-21835

Major gainers on the NSE at 9:30 am:

SBI Life (1.98%); NTPC (1.70%); Wipro (1.67%); LTI Mindtree (1.49%); Bajaj Auto (1.34%)

Major losers:

Nestle India (-1.76%); Sun Pharma (-1.44%); Britannia (-0.60%); Cipla (-0.59%); IndusInd (-0.42%)

7Issue Open - 17-January-24

Issue Close - 29-January-24

Right issue Size: Rs. 3999.8 Crs (2.21 Crs Shares)

Stock Price – 2068.60 /-

Right issue Price: Rs. 1812 /-

Payment Terms: Rs.1812 /- (On application Rs. 453 and Balance to be paid at such time as may be determined by the Board)

Rights Entitlement Ratio: 6 Rights Equity Shares for every 179 (Effectively 0.03 for every 1 share held).

Last Trade date (Cum Right): 09 January 2024

Ex-Right Trading date: 10 January 2024

Record Date: 10 January 2024

Right Entitlement (RE) Trading Period:- 17 January 2024 to 23 January 2024

Last day of Renunciation of Rights Entitlements: 23 January 2024

Date of Allotment (on or about): Not Yet Announced

Date of listing (on or about): Not Yet Announced

Effective Discount Per share – Rs. 8.32

{CMP-[(no. of Shares * CMP) + (No. of RE * Right issue Price) ]/ No. of Shares incl. RE}

Buy, TP Rs 3125

Underperformed Nifty by 9% in CY23 & trades cheap Forecast 13% Ebitda growth in FY25E with Jio contributing 2/3rd share on back of a tariff hike 

Expect capex to decline helping improve FCF abating concerns on rise in net debt

In FY25, expect continued focus on ROI by clients to result in a gradual pick-up in growth to 6% YoYcc

Demand recovery in CY25 will be key to avoid PE de-rating 

Top picks - Infosys, Coforge & LTIM (U/G to Buy) given strong growth visibility/relative val

See range bound O2C profitability for RIL in FY25 & forecast 13% consol Ebitda growth driven by tariff hike in Jio

Downgrade GAIL to U-P rich valuation 

Prefer MGL among CGDs 

Maintain U-P on BPCL/HPCL as valns are at premium to last cycle avg

CERC issued the FY25E-29E tariff draft regulation.

Initial read of the draft suggests generation incentives/O&M have seen a positive tweak. 

Broadly, NTPC’s FY24E-26E EPS could see 1-3% upside risk while PWGR could see 1-2% downside risk

Overweight Call, Target Rs 1,000/Sh 

Per The Initial Update, AUM Growth Was 6% QoQ Vs 5% QoQ In Q2FY24 

Term Deposit Growth Remains Healthy (7% QoQ Vs 11% QoQ) 

Average Cost Of Funds Increased (20 bps QoQ) 

Progress Of Merger Is On Track.

Overweight Call, Target Rs 604/Sh

Weak Q3 With Continues Lag In The Rural Sector 

Sequential Improvement In Demand Trends Continued During Q3 

Rural Continues To Lag Urban Growth For Sixth Consecutive Quarter 

Growth To Largely Be Volume Led 

Management Expects Consumption In Both Urban And Rural Markets To Recover

Underweight Call, Target Rs 129/Sh

Realisation Of Loan Book And Retail Loan Book Growth Continue On Track 

Await Further Details About Margins, Credit Costs, Asset Quality, etc, In Q3FY24 Results 

Co Appears To Be Moving In Right Direction For Long-term, But Valuation Looks Expensive

Overweight Call, Target Rs 770 

Co Managed To Sell All 1,100 Units Of Arbour 2/Privana South In Dec 2023 

Co Fetched More Than Rs8,000 Cr ($1bn) After Selling All 1,100 Units Of Arbour 2/Privana South 

Co Plans To Launch Another Phase In January 

FY24 Pre-sales Could Breach Rs20,000 Cr (Guidance Of Rs13,000 Cr) & Will Be Up 30% YoY

Initiate Buy, TP Rs 800 

Levers present to mitigate the rise in borrowing costs; NIM outlook stable 

Co-lending improves the quality of earnings; partnerships leveraged well 

Primed for a 25% AUM CAGR with 20%+ RoE 

Initiate Buy, TP Rs 580 

Three-pillar strategy to drive long-term value; allay investor concerns on gaps 

See increased scope for CG Power to incubate & expand into new areas, leveraging its Rs25-30bn operating cash flow in FY23-26E

Initiate BUY, TP Rs 3600 

Own-design manufacturing to drive high double-digit EPS CAGR and 20% ROE 

Think HAL is set to triple its order book from Rs0.8tn in FY23 to Rs2.4tn in FY26E 

Believe HAL is on course to re-rate by a similar magnitude to BHE in past decade

CMP: INR 526 | Market Cap: INR 11.88 Bn | Promoter: 70.37%

India Nippon Electricals (INEL) is an auto ancillary player catering to 2 wheeler and 3 wheeler segment. The product portfolio includes electric ignition systems (flywheel magneto, power boost regulator), controllers (ISG and EGR controller) and sensors. The company operates in electric as well as combustion engine. 

Key triggers:

Products:

INEL operates largely in 2W and 3W vehicles. Company has leadership position in electronic ignition system products, and has also recently entered the market for electric vehicles. Their offerings include wide range of products such as Electronic ignition systems (regulators, rectifiers, AC generators and more), Controllers (ISG and EGR controllers), Sensors (speed, temperature, oil lever, tire pressure among others). In 2W EV, the company already produces DC-DC converters while developing products in sensors, controllers, clusters and much more. Company has a growing aftermarket sales presence.

The Company has 3 Manufacturing facilities located in Tamil Nadu, Puducherry, and Haryana.

INEL is placed in the value chain which complements its parent’s offerings. The parent company offers starter batteries, lubricants, filters, lighting, horn, brakes and wiring harness along with many other products. These products are in adjacencies with offerings of INEL. Significant sales are done to the parent entities and affiliate companies, which provides visibility of sales.

Along with these products, company is also venturing in 4 wheelers and non-automotive segments

Growing market share from key clientele

Exports contributed to just 6% of total sales in FY23 but INEL has built a strong presence in North America, Japan, and Europe. Company also supplies products to regions in Asia and Africa. Some of the key clients are Hero, Suzuki, TVS, Bajaj, Honda, Polaris, Greaves, Mahindra, Kohler among many others. The highlight is that the market share from key customers has increased from 33% (in FY19) to 41% (in F23). This indicates strong dependency and confidence in operations of INEL. 

Aggressive development in electric 2W products

The company is developing multiple products in EV 2 wheelers which include clusters, motors, controllers and sensors. These products are in addition to existing offering of convertors by INEL. The new products will bring in substantial additional revenues as the products will be offered to the same clientele.

On way to stronghold position in aftermarket sales

Current contribution from aftermarket sales is just 10% which the company aims to touch 15% by FY25. The parent entities, Lucas TVS and Lucas India Service have been in existence for 60 and 80 years respectively and have a strong presence across India, especially southern region. Lucas India Service has a network of 2,000+ dealers and 15,000+ retailers, which INEL can leverage. The parentage of Lucas TVS and Lucas India Service will heavily influence the salience of INEL and strengthen the aftermarket sales.

Reputed parentage

The promoter entity is Lucas India Service which is owned by Lucas TVS (owned by TVS group). The promoter entity currently holds 70.37% stake. The shareholding pattern changed on 26th June 2023 where Lucas India Service upped their stake from 50.8% to 70.37%. The earlier promoters who took and exit in the transaction were Mahle Electric Drives Japan Corporation (13.26%) and Mahle Holding India Private Limited (6.25%). This strategic move provided an exit to the Japanese entities.

The TVS group has multiple entities associated with the automotive industry, making the group a mammoth in the sector.

Financials:

INEL is a debt free player with FY23 Revenues/EBITDA margins/PAT margins of INR 6.56 Bn/8.08%/7.53%. The company currently operates at WC days of 57, ROCE of 17.7% and ROE of 8.6%. The company also strategically holds ~8.6% equity of Lucas TVS (promoter of the promoter entity). Lucas TVS is a major supplier of automotive components to OEMs. Currently, Lucas TVS is undergoing capex to set up lithium ion batteries manufacturing unit.

Overview and Outlook:

We like India Nippon Electricals for its product portfolio and parentage. We believe the company is placed well in a niche segment which has amplifying growth potential. There are several products under development at company level which we believe brings in a strong visibility in sales growth going forward. The company is also focusing on strong aftermarket sales and aims to increase the contribution from 10 to 15%. The parent brand is an experienced and reputed player in the aftermarket sales. INEL will be the beneficiary in leveraging the parent’s brand name. The market share from key clients has increased consistently for the company over the past 5 years (from 33% to 41%) which shows dependency and confidence of clients on the company while also providing visibility for future scope. In the past 5 years, company has also increased capacities in line with their sales visibility. At CMP, company trades 21.8x TTM EPS. We are positive on the future prospects of the company. We are working on a detailed note.

Brookfield Asset Management will acquire the Indian business of American Tower Corporation for an enterprise value of ₹16,500 crore (around $2 billion).

The acquisition is being done by Data Infrastructure Trust (DIT), an infrastructure investment trust sponsored by an affiliate of Brookfield Asset Management, an announcement said.

As the week wraps up, India’s key benchmarks, the Sensex and Nifty, trade firm in anticipation of recovering losses ahead of a pivotal earnings season. The BSE Sensex surged 262.86 points to 72,110.43, while the NSE Nifty rose by 82.90 points to 21,741.50 at 9.32 a.m.

While Asian markets mirrored Wall Street’s cautionary tone post strong U.S. labor data, casting doubt on swift Fed rate cuts, India’s Nifty 50 faced selling pressure after hitting record highs. However, strong financial updates led a rebound from Thursday’s losses. Despite a 0.33% weekly decline, the index eyes potential recovery.

Reliance Securities’ Vikas Jain notes Nifty-50’s positive turnaround, citing key supports at 21,500 and resistance at 21,850. Bank Nifty, bouncing near its 20-day average, eyes resistance at 48,600 and potential profit booking below 47,500, with positive technical indicators observed.

Geojit’s V K Vijayakumar notes retail investors’ influence in the market rally, cautioning on frothy valuations in Mid and Smallcap indices. Predicts broader market corrections, highlights Fed’s potential impact, and eyes Q3 results’ effect on stock prices, specifically HDFC Bank’s influence on the Bank index.

Coforge Limited has informed the Exchange regarding Appointment of Saurabh Goel as Chief Financial Officer of the company w.e.f. January 05, 2024, following the resignation of Ajay Kalra.

3i Infotech Limited has been identified as one of the Representative Vendors in the 2023 Gartner Market Guide for Higher Education Student Information Systems 2023.

Vikas Jain, Senior Research Analyst at Reliance Securities. 

NIFTY-50 OUTLOOK

NIFTY-50 has reversed its previous day loss and given a positive crossover on the higher side with key supports at 21,500 levels. f On the higher side the previous top of 21,850 will be a resistance and on the downside 21,350 will be the trend reversal from current levels. f RSI has bounced from the oversold levels as expected and other key other key technical indicators are in positive trend. f Highest call OI has moved lower to 21,700 strike while on the downside the highest put OI has moved lower to 21,500 for the weekly expiry.

BANK NIFTY OUTLOOK

BANK NIFTY has bounced from its 20 day average and reversed its previous day gain to close near the high point of the day. f On the higher side resistance will be at 48,600 levels while the trend reversal levels will be 47,500 below will which we could witness profit booking. f RSI has reversed from the lower range and other key technical indicators have turned favorable from current levels. f Bank Nifty 49,000 CE has the highest OI while on the downside 48,000 for the put OI for the weekly expiry

V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

“An important feature of the ongoing rally in the market is that retail investors, not institutions, are calling the shots. This retail exuberance is getting reflected in the records being set by the Mid and Smallcap indices even at frothy valuations in these segments. The excessive valuations of the broader market cannot continue for long. Big corrections are likely in the broader market; the only question is when.

The risk to the global rally can come from the Fed which may turn out to be less dovish than the market expectation. Latest data from the US indicate an economy which is not weakening as much as the Fed would like. So watch out for the Fedspeak.

The Q3 results will impact stock prices. IT stocks have corrected anticipating poor numbers. The result to watch would be that of HDFC Bank which has the potential to move the Bank index.”

Lodha (Macrotech Developers) reported December quarter pre-sales Of Rs 3,410 crores. Collections for the quarter stood at Rs 2,594 crores. Lodha added three more new projects during the quarter with gross development potential of Rs 6,000 crores taking the

FY24 year to date project addition to Rs 20,300 crores.

- Malaysian palm oil futures rose for a second consecutive session on Friday, buoyed by prospects of a decline in production and robust imports to India.

The benchmark palm oil contract for March delivery on the Bursa Malaysia Derivatives Exchange was up 13 ringgit, or 0.4%, and last traded at 3,669 ringgit ($790.39) a metric ton in morning trade.

The benchmark contract has fallen 1.3% so far this week, and is on track to post its second consecutive week of losses. - Reuters

Iron ore futures dropped on Friday, as tepid near-term demand and a higher-than-expected increase in portside inventory in top consumer China undermined investor sentiment and dented buying appetite for the key steelmaking ingredient.

The most-traded May iron ore on China’s Dalian Commodity Exchange (DCE) was down 1.53% at 998.5 yuan ($139.33) a metric tonne. - Reuters

NTPC is the largest power producer forming 17 per cent of India’s installed capacity and 25 per cent of the total generation in FY23. The broad-based economic recovery and infrastructure growth have driven an increase in peak demand, reaching new highs in FY24.

NTPC’s substantial portfolio in conventional power, with a firm cost-plus business model, positions it well in a growing peak power cycle. This structure contributes to stable cash flows and will facilitate growth led by renewable energy. The CEA projects an incremental coal-based power capacity of 47 GW by FY32, in which NTPC will capture the major chunk with its brownfield power projects. The company has about 10 GW of thermal capacity under construction which is expected to get commissioned by FY26.

After underperforming its listed peers on pre-sales growth over FY21-23, we believe Sobha is set to outperform in terms of growth given its focus on unlocking its vast land reserve and exploring external growth opportunities through its healthy balance sheet.

The outperformance is also expected to be driven by improvements in profitability. Further, visibility in the monetisation of some of its large land parcels in Bengaluru will lead to a re-rating in its implied land valuation.

Bandhan Bank on Thursday reported a growth of 18.6 per cent in its loans and advances during the third quarter of this fiscal at ₹1,15,964 crore.

On a quarter-on-quarter (QoQ) basis, the loan portfolio rose 7.7 per cent against ₹1,07,633 in Q2 FY24, per a stock exchange filing. During the period under review, total deposits increased 14.8 per cent to ₹1,17,422 crore. During the third quarter of this fiscal, CASA deposits witnessed a 14 per cent rise to ₹42,413 crore.

Oil prices edged higher on Friday after minutes from a Federal Reserve meeting suggested inflation was under control and as U.S. Secretary of State Antony Blinken prepared to visit the Middle East to prevent escalation in the Israel-Gaza conflict.

Brent crude futures were up 37 cents, or 0.5%, to $77.96 a barrel, while U.S. West Texas Intermediate crude futures rose 50 cents, or 0.7%, to $72.69 at 0229 GMT.

Both benchmarks, which are on track to end the first week of the year higher, had nearly recouped all losses from Thursday, when prices settled lower in a choppy session due to massive weekly gasoline and distillate stock builds. - Reuters

UBS on HAL: Initiate Buy on Company, target price at Rs 3600/sh (Positive) 

UBS on CG Power: Initiate Buy on Company, target price at Rs 580/sh (Positive) 

Emkay on L&T FH: Maintain Buy on Company, raise target price at Rs 190/sh (Positive) 

Jefferies notes on Power utilities: NTPC, JSW Energy and Power Grid top picks (Positive) 

Jefferies on NTPC: Maintain Buy on Company, target price at Rs 415/sh (Positive) 

Jefferies on Power Grid: Maintain Buy on Company, target price at Rs 270/sh (Positive) 

Jefferies on JSW Energy: Maintain Buy on Company, target price at Rs 595/sh (Positive) 

Jefferies on Reliance Ind: Maintain Buy on Company, target price at Rs 3125/sh (Positive) 

MOSL on IIFL Fin: Maintain Buy on Company, target price at Rs 800/sh (Positive) 

Nomura on NBFCs: Prefer Five-Star, Bajaj twins, Shriram Finance (Positive) 

Nomura on Banks: Prefer ICICI Bank, Indusind Bank, Axis Bank and Federal Bank (Positive) 

CLSA on Banks: Prefer ICICI Bank, Bajaj Finance and M&M Fin (Positive) 

MS on Dabur: Maintain Overweight on Company, target price at Rs 604/sh (Neutral) 

MS on RBL Bank: Maintain Underweight on Bank, target price at Rs 250/sh (Neutral) 

MS on L&T FH: Maintain Underweight on Company, target price at Rs 129/sh (Neutral)

- IIFL Finance (IIFL) is a diversified NBFC with a strong presence across its core products of gold loans, home loans, microfinance, LAP and unsecured business loans. IIFL has morphed into a franchise, which enjoys distribution strength, strong presence in co-lending, and superior digital loan origination and underwriting capabilities, and can effectively leverage fintech partnerships to deliver a ~25% AUM CAGR over FY23-FY26E. The company trades at 1.5x FY26E P/BV and can sustainably deliver a RoE of 20%+ in the medium term.

- We believe IIFL can see further re-rating as investors get more confidence in its sustained execution prowess through strengths that it has built in its core retail businesses. We initiate coverage on the stock with a BUY rating and a TP of INR800 (based on SOTP valuation

Lofty EBITDA, yet limited reasons to cheer

A combination of elections in four major states and low offtake in east India has put Q3FY24 industry demand in the slow lane (pegged at ~4% vs. ~12% in H1FY24). Muted volumes also had an impact on pan-India prices, restricting the QoQ hike to ~2% vs. >4% anticipated in Oct’23. While our coverage EBITDA is estimated to rise a lofty ~44% YoY (low base effect), volume miss in Q3 and weak exit for cement prices (1% lower vs. Q3 average) offer limited scope for FY24 earnings upgrades (on the contrary, there are chances of some downgrade). The recent decline in fuel rates does offer scope of further easing in cost; however, risk of low demand in FY25 (post-election year) and our expectation of continued volatility in cement prices offer little reason to cheer. We stay Neutral on the sector.

UPGRADED to MidCap

- Mazagon Dock

- SJVN

- Suzlon

- Lloyds Metals

- Kalyan Jewellers

- KEI Industries

- CreditAccess Grameen

- Exide

- Nippon Life AMC

- Ajanta Pharma

- Narayana Hrudayalaya

- Glenmark Pharma

- Tata Technologies

- JSW Infra

- IREDA

UPGRADED to Large Cap

- Power Finance Corporation (PFC)

- IRFC

- Macrotech Developers

- Polycab

- REC

- Shriram Finance

- Union Bank of India

- Jio Financial services

- Indian Overseas Bank

DOWNGRADED to MidCap

- UPL

- Adani Wilmar

- PI Industries

- IRCTC

- Bosch

- Tube Investments

- Samvardhana Motherson

- Hero MotoCorp

DOWNGRADED to SmallCap

- Pfizer

- Vinati Organics

- Atul

- Whirlpool

- Sumitomo Chemicals

- Laurus Labs

- Aditya Birla Fashion

- Bata

- Bharat Dynamics

Notwithstanding the new heights scaled by key indices Nifty and Sensex, most key sectoral indices have beaten them on the back of robust economic activity across sectors.

The realty index has registered the highest growth of 77 per cent last year against the negative return of 10 per cent in 2022 while auto index was up 41 per cent (15 per cent).

However, the bellwether Nifty and Sensex have delivered 18 per cent and 20 per cent last year despite record-breaking rally. The performance of these indices paled in front of others largely due to their high base affect.

Sector Update - Dayanand Mittal

TRAI’s Oct’23 subscriber (subs) data shows industry’s MBB (mobile broadband — 3G+4G+5G) subs addition was the lowest in the last 8 months at 2.8mn (vs. 8mn in Sep’23). MBB additions remained strong for Jio (3.2mn) while it was muted for Bharti (0.5mn) in Oct’23; VIL’s MBB subs base also fell (0.8mn). Further, industry’s active subs also fell by 1.4mn in Oct’23, led by decline of 1.4mn/1.2mn/0.7mn for VIL/Bharti/BSNL, partly offset by addition for Jio (1.8mn). The industry’s overall subs additions further moderated to 0.8mn in Oct’23 (vs.1.7mn in Sep’23, 2.2mn in Aug’23 and 2.7mn in Jul’23), returning to the muted growth/declining trend witnessed during Dec’21-Jun’23 (due to churn in the lower ARPU segment). Jio’s net subs rose for the 20th consecutive month (up 3.2mn in Oct’23); however its active subs addition was a tad lower at 1.8mn. Hence, Jio’s VLR ratio fell slightly to 93.3% in Oct’23 (vs. 93.6% in Sep’23) vs. 99.2% for Bharti and 88% for VIL. Bharti’s MBB subs addition was muted at 0.5mn in Oct’23 and even its active subs base fell by 1.2mn. VIL’s MBB subs declined by 0.8mn in Oct’23, falling for the fourth time in the last 9 months; further, the decline in its overall subs continues

Sector Update - Krishan Parwani

In 3QFY24, chemical companies under our coverage are likely to witness mixed trends in sales sequentially. Deepak Nitrite will continue to benefit from improvement in phenolic spreads while the standalone business is yet to pick up. For SRF, fluorospecialty chemicals sales recovery will be offset by weak refrigerant gas sales. Navin’s order deferrals (especially CDMO) from 2QFY24 are likely to fuel a majority of its sequential sales growth. PI is likely to feel the pinch of inventory destocking for the first time. Archean’s sales will see decent sequential recovery owing to better bromine as well as salt offtake. Clean Science’s sales are likely to be up sequentially owing to higher volumes. We are still awaiting meaningful demand improvement in companies exposed to agrochemical inventory destocking. Looking at the 3QFY24 estimates, we have lowered our FY25/26 estimates for most companies by ~2-13% except UPL (~20-30% cuts), Deepak nitrite (1% upgrade), and PCBL (unchanged). Top picks – SRF in large caps, and PCBL in small cap

Jupiter Wagons: Company gets Rs 473 crore order from Defence Ministry.

L&T Finance Q3: Retail disbursements estimated at Rs 14,500 cr, up 25% YoY 

Lupin: US FDA approves company’s ANDA for Dapagliflozin and Saxagliptin 

SunTV: Unit KalRadio approves merger of UdayaFM into itself 

Bajaj Auto: Company announced launch of its new Chetak variants 

Waree Renewable: Company to consider split of equity shares on January 20, 2024 

Utkarsh SFB Q3: Total deposits up 17.6% YoY & 8.2% QoQ at Rs 15,111 cr. 

First Solar: Company signs power purchase agreement (PPA) with Cleantech Solar to Power India manufacturing facility 

LTI Mindtree: Company integrates Syncordis & Nielsen+Partner to form banking transformation practice. 

REC: Company signs MoU with Bank of Baroda to fund power, infrastructure and logistics projects over next three years. 

Realty Stocks: Housing sales up 33% to 4.11 lakh units, new supply at record 5.17 lakh last year in top 8 cities.

Sobha: Total Sales Value Rs 1,951.6 cr Vs Rs 1,424.7 cr (YoY) 

Shree Cement: Company revamps its corporate brand identity, launched multiple brand offerings with ‘Bangur’ as the master brand 

Power Finance Corp: Company raises FY24 market borrowing plan to Rs 1.05 lk cr from Rs 80,000 cr 

Torrent Pharma: Company has officially established a wholly-owned subsidiary (WOS) named Farmacéutica Torrent Colombia SAS in Colombia. 

Grasim: Company’s board approves rights issue up to Rs 4,000 crore; issue price Rs 1,812/share. Record Date 10th January

RBL Bank Q3: Total Deposits at Rs 92,743 cr vs Rs 81,746 cr YoY, up 13% 

J&K Bank Q3: Total Business up 11.80% (YoY) at Rs 2,18,650 cr Vs Rs 1,95,574 cr 

State Bank of India: Bank has announced the conclusion of successful placement of $250 million senior unsecured Green floating rate notes 

Coffee Day Ent: Total default rises to Rs 434 crore in December quarter.

Sector Update - Dayanand Mittal

We expect Jio and Bharti’s India wireless EBITDA to grow by ~3% QoQ driven by robust subscriber (subs) additions and MBB upgrades-led growth in ARPU, respecively. We expect Jio’s net subs to grow by ~9mn in 3QFY24 and ARPU to rise 0.8% QoQ to INR 183, driving 3.0% QoQ growth in revenue and 3.2% QoQ growth in EBITDA. For Bharti, we expect net subs to grow by ~3mn, and MBB subs addition at ~6mn, resulting in 1.5% QoQ rise in ARPU to INR 206, driving 2.4% QoQ growth in India wireless revenue and 2.5% QoQ growth in EBITDA. We expect VIL’s subs losses to continue; however, its ARPU is expected to rise 2.5% QoQ to INR 146 due to improving subs mix. We expect net tenancy additions for Indus Towers to remain robust as Bharti continues its aggressive 5G rollout and rural expansion programme; hence, EBITDA is expected to rise 3.5% QoQ in 3QFY24. Bharti remains our top pick (revised 1-year TP of INR 1,175) as we expect a structural uptrend in industry ARPU (9% CAGR over FY24-28) driven by future investment needs – the industry requires an ARPU of INR 270-300 in the next 3-5 years for a pre-tax RoCE of 12-15% to justify capex. We maintain HOLD on Indus Towers (revised TP of INR 180) due to duopoly risks and a SELL on VIL (revised TP of INR 8) due to concerns around survivability.

Sector Update - Abhishek Kumar

Hopes of a better second half has faded gradually. 3Q results will all but confirm that. 3QFY24 performance will be marred by higher furloughs and lower working days. Furloughs have likely been deeper (more clients) and longer (more days) this time. Budget flush, a typical balancing factor in 3Q, has not come through. We expect large cap IT Services players to report a modest -2.2% to +5.3% QoQ cc growth in 3Q. HCL, given seasonal strength in its IP-business, will likely be at the top-end. WPRO could be at the bottom. Mid-cap under coverage (PSYS/Coforge) should do relatively better (2.7%/0.5%). Margin performance, despite wage hike by few players, should be resilient. A weak 3Q aside, investors will be looking out for FY25 clues now. Unfortunately, we don’t expect much clarity to emerge there. Most players would restrict their views till Q4. On-going budget exercise mean commentary around CY24 budgets may be tentative. Deal wins could trend down from record 2Q, especially for the top-3. A weak FY24 exit on the other hand looks imminent. We expect HCLT and Coforge to be closer to the lower end of their guidance. INFO could miss the top-end. Longer furloughs and absence of budget flush are clear signs of weak demand. As we noted in our 2024 outlook (Enthusiasm can wait, 02 Jan 24), FY25 growth could disappoint Street’s current expectations. We wouldn’t be chasing the recent rally.

Kalyan Jewellers has reported consolidated revenue growth of 33 per cent in the December quarter.

Its revenue in India was up 40 per cent for India operations during Q3 FY2024. It has launched 22 new ‘Kalyan’ showrooms across India in the quarter under review.

Plans to add 15 ‘Kalyan showrooms in India, 2 in the Middle East and 13 Candere’ showrooms in the ongoing quarter.

It plans to signing LOIs for the 80 showrooms planned for FY’25.

To mark the milestone of the company’s 250th showroom in Ayodhya during the ongoing quarter, it said.

Digital outperforms traditional media

TV – Advertisement revenue growth hit by Cricket World Cup

The TV industry continued to face challenges in the face of muted growth in advertising in Q3. This was due to: 1) high base last year and 2) most of the ad spends being diverted to Cricket World Cup (CWC), thus hitting general entertainment channel (GEC) spend. Expect ad revenue to dip 1.5% YoY for Zee Entertainment (Z IN) versus a growth of 3% YoY/4% YoY for Sun TV (SUNTV IN)/TV Today (TVTN IN).

Expect moderation in subscription revenue QoQ due to the implementation of New Tariff Order 3.0 (NTO 3.0) two quarters ago (March 2023). Also, subscription revenue may grow 3.5% YoY/4% YoY for Z/ SUNTV. For SUNTV and Z, the absence of movie revenue (Z released Gadar 2 and SUNTV Jailer in Q2) may drag total revenue QoQ. Expect Z’s EBITDA margin to dip 460bps YoY in Q3FY24E to 9.0% due to the absence of movie revenue. And Sun TV’s EBITDA margin may also drop 190bps YoY to 68.5%. Expect TVTN’s EBITDA margin to grow 250bps QoQ to 8.0% due to absence of investments in digital platform.

Gold prices were on track for their first weekly fall in four on Friday, as waning expectations of an early interest rate cut in the U.S. boosted the dollar, while investors focussed on a key employment report due later in the day for more rate clues.

FUNDAMENTALS

* Spot gold was up 0.1% at $2,054.10 per ounce, as of 0156 GMT. It has declined about 0.8% so far in the week after three straight weekly gains.

* U.S. gold futures rose 0.2% to $2,053.00 per ounce.

* Spot silver rose 0.6% to $23.13 per ounce, while platinum slipped 0.3% to $953.61.

• The credit exposure of banks to Non-Banking Financial Companies (NBFCs) stood at Rs 14.9 lakh crore in

November 2023, indicating a 21.5% year-on-year (y-o-y) growth, a tad slower than the rate witnessed in

October 2023 and the approximately 30% average growth for the prior 12 months. Furthermore, the

proportion of NBFC exposure in relation to aggregate credit has risen from 9.5% in November 2022 to 9.6%

in November 2023. On a month-on-month (m-o-m) basis, the amount rose by 1.2%.

• Meanwhile, the Mutual Fund (MF) debt exposure to NBFCs, including Commercial Papers (CPs) and Corporate

Debt, witnessed an increase of 11.5% to 1.5 lakh crore in November 2023, while declining sequentially by

1.6% from October 2023. Large NBFCs have focused on the capital market, while mid-sized and smaller NBFCs

continued their reliance on the banking system as their primary source of funding. However, given the general

credit risk aversion of MFs, the exposure to NBFCs, particularly those rated below the highest levels, is not

expected to witness significant growth. Consequently, the aggregate dependence of mid-sized NBFCs on the

banking sector for funding is likely to remain high.

• Highlighting the relative size of their exposure to NBFCs, MFs’ debt exposure to NBFCs fell to 10.4% as a

percentage of “Banks’ advances to NBFCs” in November 2023 from 11.4% in November 2022, and sequentially

from 10.7% in October 2023

We have analysed various auto ancillary businesses based on valuation multiples, likely earnings growth, RoE and several business risks. For long-term investment purpose, we prefer businesses with market leadership, higher share of business with OEMs, clean corporate governance, reducing exposure to CV cyclicality, EV agnostic, ability to manage capital structure/efficiency, and ability to innovate. Following these fundamentals, our top picks in the space for long-term investment are Craftsman Automation, Endurance Technologies, Sona BLW, Suprajit, VST Tillers & Tractors looks promising candidate to us among small caps automobile space. We believe within our coverage universe Apollo Tyres, Exide Industries, CEAT and Balkrishna are trading higher than their fair value.

Delayed Winter and weak festival demand drag Q3 volumes

Q3FY24 presents continued challenges to demand for FMCG products, adversely affecting sector volume growth. Weak rural volume, trailing urban figures in the past year remain persistent. Further, low farm income and emergence of small regional firms are hurting large, listed companies. A delayed Winter has shrunk demand for seasonal categories during the quarter, notably for skin creams and Chyawanprash, falling short of initial expectations across FMCG companies. In terms of categories, food and beverages is anticipated to outperform home and personal care.

• BALRAMCHIN

• CHAMBALFERT

• DELTACORP

• ESCORTS

• GNFC

• HINDCOPPER

• INDIACEM

• IEX

• NALCO

• SAIL

• ZEEL

L&T Finance Holdings Ltd. retailisation portfolio estimated at 91% for the quarter ended December 31, 2023

As per a stock exchange filing, the retailisation portfolio of L&T Finance Holdings Ltd. (LTFH), a leading Non-Banking Financial Company (NBFC), is estimated at 91% for the quarter ended December 31, 2023 compared with 64% for the quarter ended December 31, 2022. The Company is well ahead of the Lakshya 2026 goal of over 80% retailisation.

The retail loan book at the end of the quarter ended December 31, 2023 is estimated at Rs. 74,750 crore, which is a growth of about 31% on a year-on-year basis.

The retail disbursements for the quarter ended December 31, 2023 is estimated at Rs 14,500 crore, which is a growth of about 25% on a year-on-year basis.

Weak winter hurts India show; valuation captures headwinds

In Q3FY24, Dabur is likely to post ~7% consol. revenue and ~9% earnings growth. We expect 4% volume-led revenue growth on the domestic front, with 8% growth in Company’s international business. Badshah would contribute ~2% to consol. revenue, in our view, with >20% YoY growth. Gross margin is likely to maintain the recovery trend, but EBITDA margin expansion YoY would be slow given higher A&P needs. The mgmt. foresees QoQ recovery in demand. At one year forward P/E of 44x (capture near-term headwinds), the stock trades at 5% discount to its last 5Y avg fwd P/E. We maintain our positive stance on Dabur, encouraged by its diversified portfolio, which the management is geared to better leverage with improvement in the demand scenario. We retain BUY with Sep-24E TP of Rs650, on 46x Sep-25E earnings

Q3 preview – subdued quarter amid demand slowdown

Q3 is likely to be a subdued quarter, on demand slowdown in chemicals due to: a) destocking of channel inventory build-up and rescheduling of orders at the customers’ end, b) pricing pressure across chemicals on Chinese dumping, and c) cyclical slowdown in discretionary spends in certain geographies (like Europe). On-ground demand in chemicals remains fairly muted, with limited green shoots in discretionary spends like pigments and polymers, which have started seeing some improvement, though textiles and dyes remain weak. Non-discretionary spends like agro and pharma are still weak and the sentiment is expected to improve from H1FY25. We expect bulk chemical players that have a relatively diversified end-user market to see faster recovery once demand improves, followed by gradual recovery in agrochemicals and pharma. We have an ADD on SRF and Anupam; a REDUCE on NFIL; and a SELL on GFL.

Expert Call: 2W revival continues; PV outlook muted

We interacted with Nikunj Sanghi, former FADA President and Dealer-Owner for M&M (Auto) and HMCL in Rajasthan. KTAs:

■ The commuter/entry-level 2W segment is witnessing revival, with a positive near-term outlook; also, replacement demand-backed recovery is under way in overall 2Ws, with sustainability being a monitorable;

■ PV inventory levels remain high at 4-5 weeks, despite correction in Dec; near-normalized production is driving the run down in orderbooks; the small-car segment remains under pressure; outlook muted amid high base;

■ We expect single-digit growth in CVs, on ongoing infra spends

Zuari Industries: Company States Zuari EnviEN Bioenergy Pvt Ltd is now a 50:50 Joint Venture with EnviEN International.

Swan Energy has received the formal handover of management control of Reliance Naval and Engineering from the National Company Law Tribunal-appointed Monitoring Committee.

The Monitoring Committee has handed over the management control with the approval of all the Committee of Creditors members and the committee now stands dissolved with effect from Thursday.

Gross credit deployment by Indian banks in the aviation sector witnessed a five-month-high in November 2023. The total outstanding credit by 40 scheduled banks was at ₹42,033 crore in June 2023. In November 2023, the total investments in the sector stood at ₹40,449 crore. Overall, CY2023 has witnessed a gradual uptick in investments. Industry analysts peg this credit deployment within the aviation sector, considered a part of the services sector by the RBI, has surpassed the services sector’s average deployment, which grew at 25.4 per cent for the same period.

To ensure that individual investors’ losses are minimised in case issuers default on short-term financial instruments, the Reserve Bank of India has limited their investment in primary issuances to a quarter of the total issuance.

Further, issuers of commercial papers (CPs) and non-convertible debentures (NCDs) have to disclose information on any default in payments through various channels, including publicly disseminating such information through their website, per RBI’s revised master direction on CPs and NCDs of original or initial maturity up to one year.

Banks, both public sector and private, continued to post robust double-digit loan growth of 11-23 per cent y-o-y in Q3 FY24, as per provisional figures declared by the lenders for the quarter.

Credit growth for banks such as YES Bank, South Indian Bank and Dhanlaxmi Bank was at the lower end of 11-12 per cent whereas for lenders such as IndusInd Bank, Bank of Maharashtra and CSB Bank was at the higher end of 20-23 per cent. Growth for small finance banks was over 20 per cent given their small base with Suryoday SFB posting loan growth of 41 per cent on year.

Grasim Industries, an Aditya Birla Group company, will raise ₹4,000 crore by issuing 2.21 crore new shares on rights basis. The company has set rights issue price at ₹1,812 a share. The issue price is at 12 per cent discount to the closing price of ₹2,069 on Thursday.

India is likely to project higher economic growth estimates of around 7% for the 2023/24 fiscal year ending in March, compared with earlier government forecasts when the National Statistical Office releases its first advance GDP estimates on Friday.

An increased estimate of annual gross domestic product is widely expected after the Reserve Bank of India (RBI) revised its own growth forecast last month to 7% for the current fiscal year, from an earlier estimate of 6.5%.

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

The upmove in the stock of Sunteck Realty is gaining momentum. The stock had surged 8 per on Thursday. This has turned the short-term outlook bullish.

The upmove in the stock of Sunteck Realty is gaining momentum. The stock had surged 8 per on Thursday. This has turned the short-term outlook bullish.

NCC: Promoter group Alluri SanjithRaju bought 10,000 shares on Dec. 29. 

Divis Laboratories: Promoter group DIVI Madhusudana Rao sold 5,000 shares on Dec. 29.

Jindal Saw: Promoter group Shradha Jatia bought 41,396 shares on Dec. 29. 

Ultramarine and Pigments: Promoter group S Narayan sold 9,000 shares on Dec. 29. 

MTAR Technologies: Promoter group K Vamshidhar Reddy sold 26,000 shares on Dec. 28. 

Deccan Gold Mines: Promoter Rama Mines Mauritius sold 78,040 shares between Dec. 27 and Dec. 28.

VST Industries: DSP Mutual Fund sold 2.5 lakh shares (1.61%), HDFC Mutual Fund sold 2 lakh shares (1.29%) while Radhakishan Shivkishan Damani bought 2.22 lakh shares (1.44%), SBI Mutual Fund bought 2.25 lakh shares (1.45%) at Rs 3,390 apiece. 

Strides Pharma Science: Amansa Holding bought 18.17 lakh shares (2%) at Rs 659.61 apiece. 

PDS: Malabar India Fund bought 10 lakh shares (0.76%

FIIS F & O : RS. CRS. : 

TOTAL NET SELL : -98483 😭😭

INDEX FUT. : +121 

INDEX OPT. : -98290

STOCK FUT. : -525

STOCK OPT. : +210

🔹SEC. IN F&O BAN FOR, 05-JAN-24 :

\u0009

1.\u0009BALRAMCHIN 2.\u0009CHAMBLFERT 3. DELTACORP 4.\u0009ESCORTS 5. GNFC 6.\u0009HINDCOPPER 7.\u0009IEX 8.\u0009INDIACEM 9. NATIONALUM 10\u0009. SAIL 11. \u0009ZEEL

ADDITION :CHAMBLFERT, ESCORTS, GNFC, INDIACEM

DELETION : NIL

🔹INSTL. INVEST. EQUITY CASH PROV. TRADES AS ON : 04-JAN-2024 : 

FIIS : BUY +1,513 (14,864-13,351) 😃

DIIS : SELL -1,387 (12,012-13,399) 😥

BSE SENSEX : +491 (71,847)🔼 

NSE NIFTY : +141 (21,658)🔼

BSE MIDCAP. : +553 (37,634)🔼

BSE SMLCAP. : +450 (43,553)🔼

B. CRUDE : $ 78.45 🔼 😥

GOLD: $ 2,044=INR 64,250(10gr)🔼🙂

SILVER : RS. 76,900 (kg)(5pm)🔽😥 

FOREX : RS. $ 83.22 🔼 🙂

7.18%NEW ‘33: 7.2208%(99.71)🔼☺️

7.18%GOI ‘37: 7.3441% (98.60)🔼☺️

Constellation Brands Inc (Pre market) (Sector- FMCG)

15:30 EURO CPI Flash Estimate y/y (Expected: 3.0 versus Previous: 2.4%)

19:00 U.S. Non-Farm Change (Expected: 168K versus Previous: 199K)

19:00 U.S. Unemployment Rate (Expected: 3.8% versus Previous: 3.7%)

20:30 U.S. ISM Service PMI (Expected: 52.5 versus Previous: 52.7)

Asia’s stock markets exhibited a mixed kickoff on Friday following weakened US stocks and bonds due to selling pressure. This decline resulted from robust labor market indicators, dimming hopes for interest rate cuts.

In Japan, stocks commenced slightly higher as a weaker yen bolstered exporter shares, with investors awaiting the day’s US jobs data. The Nikkei 225 surged by 0.30%, reaching 33,387.71 at the opening, while the broader Topix index climbed 0.48% to 2,390.32. Australian equities started marginally higher. Conversely, Hong Kong’s Hang Seng index dropped by 1.08%, closing at 16,465.46.

Earlier on Thursday, the S&P 500 witnessed shedding 16.13 points (0.34%), concluding at 4,688.68 points. Simultaneously, the Nasdaq Composite declined by 81.91 points (0.56%) to 14,510.3. However, the Dow Jones Industrial Average managed a modest 10.15 points (0.03%) increase, closing at 37,440.34.

The S&P 500 and Nasdaq Composite closed lower on Thursday, extending their losing streak that kicked off 2024, although the Dow Jones Industrial eked out a win on the back of financial stocks and strong jobs data.

For the S&P 500, this is the worst start to a year since it began 2015 with a three-session skid, as tech-focused investors continued to take profits after a blistering rally in the final weeks of last year.

Bets that the Federal Reserve could start reducing rates this year had driven much of the gains toward the end of 2023, though the latest minutes from the central bank’s December policy meeting did not offer many clues on when the easing might commence.

A tick-up in yields on longer-dated U.S. Treasuries - the benchmark 10-year note ended at 4% - prompted traders to move away from growth stocks toward other sectors.

The S&P 500 lost 16.13 points, or 0.34%, to end at 4,688.68 points, while the Nasdaq Composite lost 81.91 points, or 0.56%, at 14,510.3. The Dow Jones Industrial Average rose 10.15 points, or 0.03%, to 37,440.34. - Reuters