Market Highlights

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Get the latest Indian stock / share market highlights, BSE/NSE stock news, business research reports & details - updated daily by Money Times.

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July 25, 2023

• *Adani Enterprises:*
• The Adani Group's upcoming copper factory in Gujarat is likely to start production in March next year. Kutch Copper Ltd - a subsidiary of Adani Enterprises Ltd - is setting up a greenfield copper refinery project that will produce 1 million tonnes per annum in two phases. The $ 1.1 billion project in Mundra is expected to play a crucial part in green energy infrastructure development.
• Cost of 10,00,000/- imposed on SEBI for failing to investigate complaints of investors against broker despite SAT Order is very timely as SEBI in complaints made by investors closed complaints without assigning any reason.
• *Very Good Morning!!!*
• *US Markets in Detail...*
• *GIFTNifty: 19,738: +45: +0.23%*
• Today:
• *Listing of New Securities TITAGARH RAIL SYSTEMS LIMITED*
• 7600000 equity shares of Rs. 2/- each issued at a premium of Rs.378/- to Non Promoters on a preferential basis
• *Listing of new securities of GTL INFRASTRUCTURE LTD*
• 260409 Equity shares of Rs. 10/- each issued at par pursuant to conversion of Foreign Currency Convertible Bonds (FCCBs) of the Company.
• *Major Financial Results:*
• ALICON, APOLLOPIPES, ASIANPAINT, CEATLTD, CYIENT, DELTACORP, DIXON, GREENPLY, JUBLFOOD, LT, MHRIL, POWERINDIA, SBILIFE, SUZLON, TATAMOTORS, UTIAMC, etc
• *Last Heard*
• NetWeb: Allotment out…Last Heard: 387-393…IPO Price: 500/-…Issue size: 611 cr….
• SBFC Finance: 36-38…IPO px: Rs. 60/-…IPO size: 1000 cr
• Jio Financial: 298-302
• Yatharth: 75-78….IPO Px: 300…IPO size: 700 cr
• *Provisional Cash Rs. In Crs. (24th July)*
• FIIs -83 (9,719 – 9,802)
• DIIs +935 (8,656 – 7,721)
• Sensex: 66,385 (-299) (-0.45%)
• Nifty: 19,672 (-73) (-0.37%)
• BankNifty: 45,923 (-152) (-0.33%)
• NiftyIT: 29,843 (-28) (-0.09%)
• MIDCAP: 36,743 (-57) (-0.15%)
• Dow: 35,411: +184: +0.52%
• S&P: 4,555: +18: +0.40%
• Nas: 14,059: +26: +0.19%
• Brazil: 121,342: +1,125: +0.94%
• Ftse: 7,679: +15: +0.19%
• Dax: 16,177 (-27) (-0.17%)
• Cac: 7,433: +48: +0.65%
• MOEX: 2,924: +6: +0.21%
• WTI Oil: $78.74: +2.17%
• Brnt: $82.83: +2.17%
• Natural Gas: 2.69 (-1.03%)
• Gold: $2001 (-4) (-0.21%)
• Silver: $24.58 (-1.10%)
• Copper: $386: +0.98%
• Cotton: $85.16: +0.80%
• Copper (LME): $8,452 (-34) (-0.39%)
• Alluminum (LME): $2,205: +4: +0.16%
• Zinc (LM): $2,372 (-12) (-0.48%)
• Tin (LME): $28,494 (-221) (-0.77%)
• Eur-$: 1.1062 (-0.6%)
• GBP-$: 1.2817 (-0.3%)
• Jpy-$: 141.52: +0.1%
• Re: 81.8275 (-0.16%)
• USD-RUB: 90.6333 (-0.04%)
• US10yr: 3.87%
• GIND10YR: 7.073 (-0.20%)
• $ Index: 101.3790: +0.30%
• US Vix: 13.91: +2.28%
• India Vix: 11.65: +1.39%
• BalticDry: 978: +1: +0.01%
• *ADR/GDR*
• Cogni: +0.96%
• Infy (-0.49%)
• Wit (-1.01%)
• IciciBk: +0.04%
• HdfcBk (-0.55%)
• DrRdy: +1.03%
• TatSt (-2.47%)
• Axis: +0.34%
• SBI: +1.61%
• RIGD (-1.12%)
• INDA: +0.38% (IShares MSCI INDIA ETF)
• INDY: +0.17% (IShares MSCI INDIA 50 ETF)
• EPI: +0.45% (Wisdom Tree India Earning)
• PIN: +0.27% (Invesco India Etf)
• U.S. stock futures were about flat on Monday night after the Dow Jones Industrial Average continued its longest winning streak since February 2017.
• Dow Jones Industrial Average futures slipped by 2 points, or 0.021. Futures linked to the S&P 500 and Nasdaq 100 ticked up 0.02%.
• The contrasting market fortunes between the U.S. and China are well known to investors, but deepening gloom surrounding China's property sector and a surprisingly blunt view of the economy from Beijing suggests the chasm will widen further still.
• While Chinese markets could sour Asian sentiment on Tuesday, local investors have two other potential market-moving events on the slate - an interest rate decision from Indonesia and second quarter gross domestic product (GDP) data from South Korea.
• Chinese stocks on Monday ended lower for a sixth day after the country's top leaders said the economy is facing "new difficulties and challenges", "risks and hidden dangers in key areas" and "a grim and complex external environment."
• The recovery will be tortuous, they said, and skeptical investors will need convincing that pledges to step up policy support and stimulus will be enough.
• *A pivotal week for markets started with small gains in stocks as investors used the lack of a long-awaited recession to drive up equities ahead of a Federal Reserve rate decision and busy week of corporate earnings.*
• *Dow scores longest winning streak in over 6 years (with an 11th straight day of advances) The S&P 500 traded near 4,550, while the Nasdaq 100 underperformed after a “special rebalance” that took effect Monday. Two-year US bond rates climbed as an auction drew the highest yield since 2007. The dollar was little changed. Bitcoin briefly fell below $29,000. West Texas Intermediate crude topped $78 a barrel. Wheat and corn gained as Russia attacked one of Ukraine’s biggest Danube river ports.*
• *Energy stocks led gains in the S&P 500, with the sector up about 1.7% after oil and gasoline futures touched a three-month high Monday. Chevron rose nearly 2% after the oil giant reported preliminary second-quarter adjusted earnings Sunday that topped analysts’ estimates.*
• *So far, there’s no evidence of a recession. So as long as there’s no evidence of recession, and I think the market will probably continue to melt up; people are chasing*
• *Investors ignored a survey showing July U.S. business activity had slowed to a five-month low, dragged down by decelerating service-sector growth.*
• *Traders will also watch for the personal consumption expenditures index, the Fed’s preferred inflation gauge, which is due at the end of the week.*
• *Volume on U.S. exchanges was 9.43 billion shares, compared with the 10.30 billion average for the full session over the last 20 trading days.*
• In the run-up to the Federal Reserve and European Central Bank’s gatherings, investors got a reminder about the side-effects of aggressive policy tightening. Disappointing data from both the US and euro-area added to bets officials are close to ending their hiking cycles to prevent a recession. Aside from the economic picture, global companies with a combined $27 trillion in value were set to report results, including giants Microsoft Corp., LVMH and Samsung Electronics Co.
• Among the corporate highlights, Tesla Inc. advanced after disclosing strong sales outside the US and China. Apple Inc. gained as Bloomberg News reported the company is keeping its iPhone shipments steady despite the 2023 turmoil. AMC Entertainment Holdings Inc. climbed as a surprise court ruling Friday scuttled a stock conversion plan the cinema chain has now revised. Chevron Corp. rose on solid earnings.
• This week will offer plenty of opportunity to test the stock-market rally that began on Oct. 12. Traders will be seeking to gain further insight into the direction the markets are likely to take from here.”
• The delayed impact of aggressive interest-rate hikes by global central banks, dwindling consumer savings and a “deeply troubling” geopolitical backdrop are poised to spur fresh market declines and renewed volatility, according to JPMorgan Chase & Co. strategist Marko Kolanovic.
• Kolanovic also noted that the stock-price reaction to earnings reports is expected to be muted as the market was strong coming into the second-quarter reporting season.
• *Investors have mostly shrugged off positive earnings surprises from companies that reported results so far, according to strategists at Bank of America Corp. Moves were on average 1.3 percentage points larger than implied by the options market, but the direction was skewed to the downside.*
• *“This suggests increased positioning risk and good news having been priced in,” BofA strategists led by Savita Subramanian added.*
• Tech may “hold the key” to the continuation of the near-term bullish enthusiasm of stock traders as big names get ready to report their quarterly numbers.
• Indeed, the stakes are high for heavyweight technology firms, which have fueled an advance of over 40% for the Nasdaq 100 this year. The “big seven” — Apple Inc., Amazon.com Inc., Nvidia Corp., Meta Platforms Inc., Alphabet Inc., Tesla and Microsoft — now trade at a record premium to the bottom 493 stocks in the S&P 500, according to BofA’s Subramanian.
• “We expect big tech earnings to be mixed and the real test will be for companies that have significant exposure to artificial intelligence as investors are eager to see if these companies can report strong enough results to support their significantly elevated share prices in recent months,” said James Demmert, chief investment officer at Main Street Research.
• *What drove the market*
• *The Dow sits at its loftiest level since Feb. 9, 2022 — reflecting a broadening of the rally that had been mainly powered by big technology stocks in recent months. The S&P 500, meanwhile, is 5% away from its record finish of 4,796.56 set on Jan. 3, 2022.*
• *Analysts said the surge reflects hopes that cooling inflation will allow central banks to soon stop their rate-hike campaigns and that any economic downturn caused by the monetary tightening will not impact corporate profits too badly.*
• “You have a lot of people who have missed this rally and investors are afraid this thing might melt up further,” said an expert.
• “The question is, ‘Is this buying correct?’ Investors should recognize that the indexes are vulnerable,” he said. In addition, Monday’s special rebalancing of the Nasdaq-100 should create “some volatility within larger tech names,” particularly those which are seeing their weightings reduced.
• Stocks had stumbled earlier this year amid problems at regional banks and a debt-ceiling standoff. Since June 1, coinciding with the resolution of the debt-ceiling showdown, the market has seen no big negative catalysts, Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research, told MarketWatch in a phone interview.
• Second-quarter earnings season is under way, but expectations have been set very low, according to Frederick. Investors are looking forward to prospects for an improving picture into next year. Barring any unforeseen exogenous events or a disturbing outlook warning from a major corporate player, stocks appear poised to continue pressing higher, with the S&P 500’s all-time high potentially in sight before year-end, Frederick said.
• *The coming week will have plenty for traders to consider, with the top three central banks delivering rate decisions and a slew of U.S. companies presenting their results.*
• *The Federal Reserve is expected to raise borrowing costs by 25 basis points to a range of 5.25%-5.5% on Wednesday, and investors will be eager to hear whether that may be the last for the cycle. On Friday, the Bank of Japan should leave rates unchanged, but may say something about removing elements of its ultraloose policy.*
• *On Thursday, the European Central Bank will deliver its decision. Another increase in borrowing costs is expected, but the ECB’s hawkishness may be tempered after reports released on Monday showed that economic activity in the eurozone slumped to an eight-month low in July.*
• *Earnings season remains in full swing, with several tech heavyweights due to report in the week ahead. Alphabet , +1.30% and Microsoft , +0.39% will present their numbers on Tuesday, Meta , -0.90% on Wednesday and Intel , -1.15% on Thursday.*
• “Equity investors are anticipating the end of interest-rate hikes after having seen inflation go down to 3%, and are wanting to get back into party mode,” said Tim Courtney, chief investment officer of Exencial Wealth Advisors in Oklahoma City, Okla., which manages around $4 billion in assets.
• “They are seeing cheaper capital ahead and eyeing multiples with lower interest rates” in mind, Courtney said via phone. “And that’s probably where investors need to be a little skeptical and do their due diligence because it does feel an awful lot like the same kind of speculation and really high risk-taking we saw back in 2021. The market seems to be tilting back in the direction of a lot of investments we saw flourish, like tech startups and companies that don’t have a clear path to profitability for years.”
• *The U.S. economy grew in July at the slowest pace in five months, S&P surveys of purchasing managers showed. They pointed to weaker conditions later in the year.*
• *Fair Value*
• The S&P 500’s high valuation is reasonable and could rise further this year as laggards of the index join the surge in winners from artificial intelligence, according to Goldman Sachs Group Inc. strategists.
• While the base-case scenario is for the S&P 500’s price-to-earnings ratio to shrink slightly to 19 times from the current level of about 20 by the end of 2023, the risks to valuations are now skewed to the upside, strategists led by David J Kostin said.
• Meantime, Glenmede’s Global Expected Returns Model shows valuations on US large-cap equities currently sit at the 77th percentile — which implies 22% downside if valuations were to revert to fair value.
• “Recession beginning later this year or early next remains the base case, a likelihood which is not reflected in equity valuations,” said Jason Pride, chief of investment strategy and research at Glenmede.
• The outlook for the world’s largest economy will likely hinge on the Fed’s willingness to tolerate inflation markedly higher than it would prefer. After taking a break from tightening last month, Chair Jerome Powell and his colleagues look locked in to raising interest rates by a quarter percentage point on Wednesday.
• The big question facing policymakers and financial markets at this stage is what comes next.
• The market is pretty well signaling another 25-basis point rate hike is in the cards. People are probably looking past the announcement itself and then trying to glean some read in terms of what happens later this year.”
• Whether the Fed gives investors a reason to sell or there’s a big earnings disappointment this week, the market is ripe for a decline into the fall, according to Paul Nolte at Murphy & Sylvest Wealth Management.
• “For now, that decline is not something to upset the longer-term trajectory of the market,” he noted.
• *The S&P flash U.S. services-sector index fell to 52.4 from 54.4 in the prior month. That’s the lowest reading since February. Meanwhile, the S&P U.S. manufacturing sector index rose to 49.0 from 46.3. A reading above 50 indicates an expansion in activity, while a reading below that level signals contraction.*
• *European markets closed slightly higher on Monday as investors digested the inconclusive results of Spain’s election and looked ahead to a busy week of corporate earnings and central bank meetings.*
• *Fresh data pointed to a slowdown in business activity in France, Germany and the U.K. in July, adding to recessionary risks in Europe.*
• *U.K. economic activity slowed sharply in July, new flash data showed Monday.*
• *The flash U.K. PMI services output index fell to a six-month low of 51.3, according to new data released on Monday. Meanwhile, the manufacturing output index hit a seven-month low of 46.5.*
• *Business activity contracted in the euro zone in July, flash estimates from purchasing managers survey showed Monday.*
• *The HCOB Flash Eurozone Composite PMI Output Index, which gauges activity in the manufacturing and services sector, fell to an eight-month low of 48.9 in July, down from 49.9 in June.*
• *French and German PMI data also came in weaker than expected, slipping to 46.6 and 54.1, respectively.*
• Euro zone bond yields fell Monday on the back of disappointing flash PMI data out of France and Germany.
• France’s 10-year yield fell to 2.925%, and Germany’s slipped to 2.375%.
• Spanish elections held Sunday left the country without a clear majority for either of the two main parties, opening the door to potentially prolonged coalition negotiations.
• *In geo-political news:*
• North Korea fired two ballistic missiles into the sea off its east coast late on Monday, South Korea's military said, hours after a U.S. nuclear-powered submarine arrived in a naval base in the South.
• Japan's defence ministry also reported the launch of what it said could be a ballistic missile by North Korea. Japanese media said there may have been multiple missiles launched, citing a Japanese government source.
• The reports come amid heightened tensions on the Korean peninsula as South Korea and the United States take steps to increase their military readiness against North Korea's weapons programme with the deployment of U.S. strategic military assets.
• North Korea has reacted angrily, saying such a deployment could meet the criteria for its use of nuclear weapons.
• *Companies in focus*
• • Shares of Domino’s Pizza Inc. finished 0.1% higher after the pizza chain reported second-quarter profit that topped expectations but revenue that surprisingly declined, as market basket pricing to stores fell.
• • Shares of AMC Entertainment Holdings Inc. ended up by 33% after a Delaware judge blocked the company’s plan to convert its APE preferred units into stock. In addition, the theater chain reported its busiest weekend since 2019, boosted by the blockbuster openings of “Barbie” and “Oppenheimer.”
• • Shares of Mattel Inc. , maker of Barbie dolls, closed up by 1.8%. Big-screen cinema operator IMAX Corp. gained 2.9%.
• • Tesla Inc shares ended up by 3.5% — shaking off weakness seen after UBS recommended investors stop buying and said prices already fully reflect strong demand.
• *Key events this week:*
• # US Conf. Board consumer confidence, Tuesday
• # US new home sales, Wednesday
• # FOMC rate decision, Fed Chair Powell news conference, Wednesday
• # China industrial profits, Thursday
• # ECB rate decision, Thursday
• # US GDP, durable goods orders, initial jobless claims, wholesale inventories, Thursday
• # Japan Tokyo CPI, Friday
• # BOJ rate decision, Friday
• # Eurozone economic confidence, consumer confidence, Friday
• # US consumer income, employment cost index, University of Michigan consumer sentiment, Friday
• *Currencies*
• # The Bloomberg Dollar Spot Index was little changed
• # The euro fell 0.6% to $1.1062
• # The British pound fell 0.3% to $1.2817
• # The Japanese yen rose 0.1% to 141.52 per dollar
• *Cryptocurrencies*
• # Bitcoin fell 3.4% to $29,121.49
• # Ether fell 2.3% to $1,849.92
• *Bonds*
• # The yield on 10-year Treasuries advanced three basis points to 3.87%
• # Germany’s 10-year yield declined four basis points to 2.43%
• # Britain’s 10-year yield declined two basis points to 4.26%
• *Commodities*
• # West Texas Intermediate crude rose 2.4% to $78.92 a barrel
• # Gold futures fell 0.5% to $1,994.80 an ounce