Vedanta’s Strategic Capex Moves

Aaj Ka Bazaar

Major US indices closed lower Wednesday, extending losses from Monday’s significant selloff. The downturn followed a brief recovery earlier in the day, as investor sentiment remained jittery over recent volatility in technology stocks and anxiety mounts over economic uncertainty. The Japanese market was under fresh pressure on Thursday as domestic chip stocks followed a slide on Wall Street overnight and as more details from the Bank of Japan (BOJ) pointed to hawkishness and further monetary tightening. The Indian market posted substantial gains on Wednesday as concerns about a US recession eased, and the Bank of Japan played down the chances of a near-term rate hike, triggering a sharp fall in the yen. Additionally, the government offered relief on long-term capital gains tax for immovable property by allowing taxpayers to choose between two tax rates, boosting investor sentiment. However, the Investor will closely watch the RBI policy outcome today, where the committee is expected to maintain the interest rate.

Markets Around Us?

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FTSE - 8,166.88 (1.72%)

Nikkei 225 - 34,865.93 (-0.72%)

Hang Seng - 16,998.45 (0.71%)

Sector: Mining

Vedanta board approves capex plan?

Vedanta Ltd's board has approved a $270 million capex investment for its Rajasthan block, aimed at boosting near-term volume through infill wells and enhanced oil recovery techniques. This 12-30 month project will be funded internally. Infill wells are drilled between existing wells to extract more resources, and the capex will also cover drilling and building surface facilities for ASP (Alkaline-Surfactant-Polymer) injection, a chemical method to increase oil extraction. Vedanta's Q1 results showed a 36% rise in net profit to Rs 3,606 crore, although oil and gas earnings fell by 6% to Rs 1,081 crore. The average daily production in Q1FY25 was 112 kboepd, down from 135 kboepd in Q1FY24. Additionally, Vedanta plans a total capex of $1.9 billion for FY 2024-25, focusing on reducing working capital, expanding steel and aluminium capacities, and operationalizing coal blocks in Odisha.

Why it Matters:

Investors may view these developments as a positive indicator of Vedanta's future growth potential and operational efficiency, potentially leading to increased stock value and market confidence.

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NIFTY 50 LOSERS

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BPCL - 337.50?(-1.79%)

Sector: Automobiles

Maruti recalls defective Alto K10 vehicles

Maruti Suzuki announced a recall of 2,555 Alto K10 vehicles on Wednesday due to a potential defect in the Steering Gear Box Assembly, which could affect steering control. The company advises owners not to drive the affected vehicles until the part is replaced. Maruti Suzuki will contact affected owners through authorized dealer workshops for free inspection and replacement. This recall follows a similar issue in March when the company recalled over 16,000 units of its Baleno and WagonR models due to a defect in the fuel pump motor, which could cause engine stalling or starting problems. The prompt action to address these defects reflects Maruti Suzuki's commitment to vehicle safety and customer satisfaction.

Why it Matters:

The immediate financial impact may be minimal, but the company's focus on resolving these issues promptly can help maintain investor confidence in its brand and operational management.

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Around the World

Most Asian stocks recovered from early losses and rose on Thursday, but concerns about slowing economic growth and higher interest rates kept markets volatile. This followed a weak session on Wall Street, where fears of a U.S. recession and mixed tech earnings hit stocks hard. The Nikkei 225 and TOPIX in Japan were volatile after two days of gains, as a hawkish tone from the Bank of Japan weighed on sentiment. Japanese markets had recently entered bear market territory. SoftBank Group dropped nearly 4% after reporting an unexpected loss. Major Asian tech stocks also fell, tracking declines in U.S. chip stocks. Chinese stocks rose slightly despite weak trade data, which showed a shrinking trade surplus and falling imports. Broader Asian markets were mixed, with Australia’s ASX 200 down 0.3%. India’s Nifty 50 was set to open positively, with the Reserve Bank of India expected to keep rates unchanged later in the day.

Option Traders Corner

Max Pain

Nifty 50 - 24,300

Bank Nifty - 48,400

Nifty 50 - 24,273 (Pivot)

Support - 24,209, 24,120, 24,056

Resistance - 24,361, 24,426, 24,514

Bank Nifty - 50,064 (Pivot)

Support - 49,836, 49,554, 49,326

Resistance - 50,346, 50,574, 50,857

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