Share Market LIVE: Sensex, Nifty flat; IT, metals lags; banks & financials gain

Share Market LIVE Update: Sensex and Nifty were flat in volatile trade. IndusInd Bank, ICICI Bank, and ITC were the top gainers on the Sensex, while Dr Reddy's, Tata Steel, and TCS were the biggest laggards

Benchmark Indian indices were lower on Monday, while shares were mixed in Asia. Stock markets would be driven by domestic macroeconomic data, global trends, crude oil movement and FII activity this week and may remain volatile ahead of the start of the quarterly earnings season.

Further slide in rupee may crimp company margins, increase risks

While Indian corporates have seen a only marginal impact from the rupee’s slide so far, experts warned that the risks are building up, and any further weakening of the currency may start hurting companies.

The rupee continued to remain under pressure in the past week. On Friday, it closed 6 paise lower at 79.04 against the dollar, hitting a new low. Year to date, the rupee has depreciated 5.95% against the dollar, and many brokerages expect it to weaken further in the near term.

ICICI Securities view on Reliance Industries

Government of India has imposed additional excise duty of?13/litre on diesel exports. Also, excise duty on petrol and ATF exports was raised by of | 6/litre

RIL has total refining capacity of 68 MMTPA and one of the refineries is export focused

Product cracks of diesel, petrol and ATF continue to trade at elevated levels. While the company is expected to report a sharp surge in profit in Q1FY23E, excise duty on product exports is likely to limit gains in the refining segment, going ahead, as per our understanding

The government will review the excise duty for recalibration every 15 days. The strategy of the company regarding export volume and global refining scenario will be the key monitorable in the near term

Key triggers for future price performance

Increment value accretion from the ‘digital ecosystem’ that will be captured at the Jio Platforms (JPL) level

Steady FCF generation in the retail segment would enable the company to maintain debt at lower levels and improve its ability to invest in future inorganic opportunities

Steady cash flow in O2C segment is expected to continue amid favourable global scenario and will enable RIL to invest in new energy verticals

HDFC Bank Q1 deposits grow 19%, advances up 21.5%

According to the exchange filing, the lender clocked a 21.5% growth in advances in June quarter to reach ?13.95 lakh crore. HDFC Bank’s deposits aggregated to approximately ?16.05 lakh crore as of June 30, 2022, a growth of around 19.3%

Covid update: India logs 16,135 new coronavirus infections, 24 fatalities.

India logged 16,135 new covid case, taking the total tally ofinfections to 4,35,18,564. Active cases increased to 1,13,864, according to the Union Health Ministry data updated on Monday.

The death toll climbed to 5,25,223 with 24 new fatalities.

Gold prices rise to highest level in 2 months

Gold prices today extended gains in India, with the yellow metal rising to 2-month highs. On MCX, gold futures were up 0.4% to ?52,117 per 10 gram. On Friday, gold prices in India had surged nearly 3% or ?1,500 per 10 gram after government in a sudden move hiked import duty on the precious metal.?

Market View: Sameet Chavan, chief analyst-Technical and Derivatives, Angel One

On Friday, markets felt some tremors initially from the major global peers; but it has managed to withstand it successfully and in fact, due to a smart V-shaped recovery in the latter half, the Nifty managed to reclaim 15700 with some authority.

In our previous intra-week commentary, we had mentioned how 15700 is to be considered a sacrosanct level. On Friday, we did see this key point getting thrashed in the initial trades and due to a massive sell-off in a few heavyweights (mainly RELIANCE), we saw Nifty hastening towards 15500 at one point. But bulls had other plans this time as they not only defended this level but went on to regain strength in the latter half to confirm a weekly close above 15700. So, for this week, 15700 followed by 15500 is to be seen as an immediate as well as a strong support zone. On the flip side, the sturdy wall remains around 15900 – 16000 and it’s a daunting task going past this for the bulls. Also one of the observations in our previous weekly commentary was the Quarterly close of Nifty above ‘5-EMA’ i.e. 16000 – 16100 would be crucial for our markets. Although the quarterly close panned out slightly lower, it would be a pragmatic ploy to give some buffer in such kind of challenging environment.

We continue to remain hopeful and if there is no aberration on the global front, we will not be surprised to see the Nifty crossing 15900 – 16000 this week itself. For this, banking certainly needs to step forward and it has already given some hints in the last couple of sessions. Also, the broader market did extremely well towards the fag end of the week, which again is an encouraging sign for the market.

Three of top 10 firms lose ?73,630 cr in m-cap; RIL biggest drag

The combined market valuation of three of the 10 most valued domestic firms eroded by ?73,630.56 crore last week, with Reliance Industries Limited taking the biggest hit.

While HUL and ICICI Bank were the other laggards from the top-10 pack, TCS, HDFC Bank, Infosys, LIC, SBI, HDFC and Bharti Airtel were the gainers.

Weak market, legal challenges hold up key disinvestments?

The government may fail to meet its asset-sales target again as a combination of reasons, including poor market sentiments and legal challenges, has delayed planned disinvestments of state-run companies.

Disinvestments of Shipping Corp. of India, BEML Ltd, NMDC Ltd’s Nagarnar plant, Central Electronics Ltd (CEL), Pawan Hans, and Concor have been either delayed or held back, people aware of the developments said, adding that the challenges faced in completing ongoing strategic sales were also delaying those in the pipeline.

ICICI Bank, Bajaj Auto, Tech Mahindra, Maruti Suzuki are among Axis Securities' top picks for July

ICICI Bank, Bajaj Auto, Tech Mahindra, Maruti Suzuki India, State Bank of India, Bharti Airtel, Cipla, Federal Bank, Varun Beverages, Ashok Leyland, Astral Ltd (India), Bata India, APL Apollo Tubes, HealthCare Global Enterprises, Praj Industries, CCL Products (India).

Centre cracks the whip on EV makers

The government has asked electric-scooter makers, including Ola Electric, Pure EV and Okinawa, to explain why they should not be penalized for a spate of scooter fires—some of them deadly—caused by faulty batteries.

The companies have been given 30 days till July-end to respond to the notices, an official familiar with the development said. The government may, however, extend the time as they have been asked to give a detailed response.

Asian stocks pare gains, US futures slip

US equity futures retreated and Asian stocks trimmed gains Monday as slowing economic growth and sticky inflation continued to cast a shadow across markets.

Japanese shares added 1% but China and Hong Kong were on the back foot. S&P 500 and Nasdaq 100 contracts shed more than 0.5%. US stock and bond markets will be closed Monday for the Independence Day break.

US factory activity slows to two-year low as clouds gather over economy

U.S. manufacturing activity slowed more than expected in June, with a measure of new orders contracting for the first time in two years, signs that the economy was cooling amid aggressive monetary policy tightening by the Federal Reserve.

The ISM survey's index of national factory activity dropped to 53.0 last month, the lowest reading since June 2020, when the sector was rebounding from a COVID-19 slump. That followed a reading of 56.1 in May. The index would need to decline to 43.1 to signal a recession.

Dollar holds firm as growth fears stalk markets

The dollar kept trade-sensitive currencies pinned near multi-year lows on Monday and the euro was under pressure as investors sought safety due to worries about slowing global growth.?

While the common currency was steady at $1.0435 on Monday, it is barely above May's five-year trough of $1.0349 and highlights the market's preference for dollars as gloom clouds the outlook.

Gold prices ease as dollar strength dulls appeal

Gold prices edged lower on Monday, as an elevated U.S. dollar hurt demand for greenback-priced bullion and also outweighed support from weakening Treasury yields. Spot gold was down 0.2% at $1,807.19 per ounce, after hitting a five-month low of $1,783.50 on Friday. U.S. gold futures fell 0.5% to $1,809.50.

Oil trades lower amid recession concerns

Oil retreated as investors weighed concern a global slowdown will erode demand and China reported widening Covid-19 outbreaks.

West Texas Intermediate declined toward $107 a barrel after jumping 2.5% on Friday to cap a weekly gain. Trading volumes will likely be weaker than usual on Monday with a holiday in the US for the Fourth of July break.

Asian markets firm

Asian stocks rose Monday, providing some relief from the worries about slowing economic growth and sticky inflation that continue to cast a long shadow across markets.

The gains included advances of more than 1% in Japan and Australia. S&P 500 and Nasdaq 100 contracts dipped after Wall Street ended in the green Friday. US stock and bond markets will be closed for the Independence Day break.

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