Nifty bounces from support levels; Global cues will be in focus in the coming week
Markets ended with minor gains with broader markets outperforming as sentiments remained cautious on weak global cues. Markets ignored Federal Reserve Bank of Atlanta President Raphael Bostic’s comments that the central bank could be in a position to pause rate hikes sometime this summer. For the week, the Nifty ended up by 0.7 pct to 17,594 levels while the Nifty Midcap and the Nifty Smallcap indices gained 2 pct and 1.2 pct respectively. Sector-wise, Nifty Bank bounced back and gained 3 pct and Nifty PSU Bank gained about 10 pct. Nifty Metal gained 4 pct while the Nifty Realty index was up 8 pct. On the losers’ side, Nifty IT fell 2 pct and Nifty Auto fell 0.6 pct. FIIs were net buyers to the tune of Rs 60.11 bn and DIIs were net buyers to the tune of Rs 125.55 bn. This includes inflow from US-based investment firm GQG of Rs 154.46 bn in four Adani stocks on 2 March.
On the commodity market side, Brent Crude oil posted positive returns for the week (up 3.6 pct) as expectations demand from China is on the rise more than offset worries over higher interest rates. Gold prices closed higher on safe-haven demand. Gold prices posted their best week since mid-January, as the U.S. dollar eased, while traders assessed prospects of further rate hikes by the Fed. On the macro front, India’s real GDP moderated to 4.4 pct YoY in Q3FY23 (Q2: 6.3 pct YoY), while real GVA slipped to 4.6 pct YoY (Q2: 5.5 pct YoY). On the supply side, the manufacturing sector posted its 3rd consecutive quarter of negative QoQ growth and 2nd consecutive quarter of YoY decline. According to the PMI survey from S&P Global, India’s manufacturing PMI dropped slightly to 55.3 in February from 55.4 in January. The gross goods and service tax (GST) revenue collection in the month of February 2023 stood at Rs 1,49,577 crore, up around 12 pct on an annual basis. Activity in India’s dominant services sector expanded at the fastest pace in 12 years in February on strong demand as price pressures eased further amid mild job rises & capacity pressures in the country, a survey showed.
Stocks/Sector in Spotlight
- Royal Enfield sales increased 21 pct to 71,544 units in February 2023 from 59,160 units sold in February 2022. Hero Motocorp sold 394,460 units of motorcycles and scooters in February 2023, a 10 pct growth over the corresponding month of the previous year. Maruti Suzuki’s total sales rose 5.04 pct to 172,321 units in February 2023 as compared with 164,056 units in February 2022. Tata Motors added 0.07 pct after the company’s total domestic and international sales for February 2023 stood at 79,705 vehicles, up 2.54 pct compared to 77,733 units during February 2022. M&M’s overall auto sales for the month of February 2023 stood at 58,801 vehicles, registering a growth of 8 pct as against 54,455 vehicles sold in February 2022. On a sequential basis, M&M’s total auto sales fell 8.6 pct in February 2023 as against 64,335 units sold in January 2023.
- Cipla fell after the recently issued form 483 by the US FDA with eight observations to its Pithampur (Indore) plant to delay new launches like Advair in the U.S. Few observations raised are critical in nature and time-consuming to resolve. Indore is one of the crucial facilities for Cipla from which it files respiratory products, mainly inhalers.
- Infosys was in focus after it rolled out private 5G-as-a-service for enterprise clients. The rollout of private 5G-as-a-Service incorporates multi-access edge computing (MEC), which reduces network lag by minimizing the time required for data processing.
- Adani Group stocks surged sharply after GQG Partners, a US-based boutique investment firm bought shares worth Rs 154.46 bn in Adani Ports and Special Economic Zone Limited, Adani Green Energy Limited, Adani Transmission Limited, and Adani Enterprises Ltd.
International News
- Eurozone consumer prices rose 8.5 percent year-on-year in February, which was the slowest since May 2022. However, the rate was only marginally below January’s 8.6 percent and also above economists’ forecast of 8.2 percent.
- Chinese business activity grew more than expected in February, rising past pre-COVID levels as an economic recovery in the country gained momentum after the relaxing of most anti-COVID restrictions this year. The manufacturing PMI rose to 52.6 in February, whereas the non-manufacturing PMI reached 56.3.
- German flash estimate put the inflation rate harmonized with the rest of the EU at 9.3 pct in February, which is an increase from 9.2 pct in January. Japan’s services sector activity grew at the fastest pace in eight months in February.
- ECB Chief Economist Philip Lane said that the eurozone inflation pressures have begun to ease, including for all-important core prices, but the ECB will not end rate hikes until it is confident price growth is heading back towards 2 pct.
Mutual Funds Industry Update
- Bajaj Finserv gets Sebi approval for mutual fund business- Bajaj Finserv has received the final nod from markets regulator Sebi to commence its mutual fund business. Its asset management business has been named Bajaj Finserv Mutual Fund. Ganesh Mohan, who has been part of Bajaj Finserv for eight years and worked as group head – of corporate strategy, will take over as the chief executive officer at the fund house. Nimesh Chandan will be the chief investment officer. Chandan was the CIO at Canara Robeco AMC. Bajaj Finserv will be the 43rd player in the Indian mutual fund industry which has assets of Rs 40.80 lakh crore.
- MOSL MF introduces a fixed SWP feature to promote regular income through MF- The new feature enables investors to generate regular cash flow at a fixed percentage and predefined frequency. An investor can start with a minimum withdrawal amount of Rs. 500 per month or above depending on their cash flow requirement. The frequency can be marked as monthly, quarterly, or annually. The withdrawal rate has been kept at 6% as default which investors can change to choose from either 8%, 10%, or 12% per annum. The default withdrawal date is set at the 7th for every month but can be changed to choose from either the 1st, 14th, 21st, or 28th. The new feature aims to help investors generate regular income and create a legacy.
Outlook Week Ahead
Markets made a sharp comeback on Friday to post weekly closing in positive terrain and also confirmed a pennant reversal after an initial down thrust. The sharp decline in India’s VIX below the 12.5% mark clearly suggests excessive put writing in the system which may trigger major short covering by FIIs in the derivative segment to force Nifty 50 beyond 19,500. The key levels to watch in the coming week would be 17,950 above which, buying momentum could accelerate further with rising gaps. Overall data for last week suggest the market has come out completely from the ‘bear grip’ and could be positioned to hit a lifetime high quickly.
For the coming week, investors will be eyeing the US-India meeting, which is likely to be held on March 8. The US Commerce Secretary Gina Raimondo will be leading a big business delegation to India to discuss ways further to boost trade and investment ties between the countries. On the macro data front, IIP data for January 2023 will be unveiled on 10 March. IIP increased 4.3 pct year-on-year in December of 2022, easing from an upwardly revised 7.3 pct rise in November.
Disclaimer: The views expressed in the blog are purely based on our research and personal opinion. Although we do not condone misinformation, we do not intend to be regarded as a source of advice or guarantee. Kindly consult an expert before making any decision based on the insights we have provided.
