Even Stevens

Nifty50: 15,850 ▲ 18 (+0.1%)
Sensex: 53,177 ▲ 16 (+0.03%)

Wassup people

Despite a gap-down opening, markets managed to recoup losses and end flat. Bears would be feeling bummed out. But you know who'll be celebrating today? Some fishermen from West Bengal who sold a fish for a staggering ₹13 lakh!

• Markets recovered from early weakness to close higher, after Asian markets reversed their losses as China cut down the quarantine time for visitors. 
• In all, 32 of the Nifty50 stocks closed in the green.
• Investors await US GDP data for Q1, which is scheduled to be released on Wednesday.

Among the Nifty sectoral indices, Oil and Gas (+2.2%) and Metal (+1.6%) were the top gainers, while Financial Service (-0.5%) and Bank (-0.5%) put up a flop show.

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What’s trending

⭐ Tata Motors hikes CV prices 🚗

TATAMOTORS (NSE): 417 ▲ 3 (+0.7%)

Auto major Tata Motors has hiked the prices of its commercial vehicle (CV) range by 1.5-2.5% with effect from 1 July. The company said this move was necessary to offset the steep rise in input costs. Earlier, the company had hiked CV prices in the range of 2-2.5% from April 1.

⭐ M&M accelerates on new launch 🚙

M&M (NSE): 1,100 ▲ 27 (+2.5%) 

Shares of utility vehicle maker M&M rose 1.5% intraday, after it launched its new SUV Scorpio-N in the domestic and international markets. The manual transmission variants are priced at ₹11.99 lakh onwards. Pricing for the automatic variants will be announced on 21 July. The company is also unveiling the new product in South Africa and Nepal and plans to launch it in Australia and New Zealand soon.

⭐ Credit card spending touches record high 💳

SBICARD (NSE): 776 ▲ 9.9 (+1.3%)

Issuing of new credit cards and spending remained strong in May. In the latest data released by the RBI, credit card spending last month stood at ₹1.14 lakh crore, up 8% month-on-month and 118% year-on-year. Meanwhile, monthly spending per card grew 5% month-on-month to ₹14,800.

⭐ IPO filings hit 15-year record 😮

In the first half of 2022, 50 companies have filed their respective draft red herring prospectus (DRHP) with the SEBI for an IPO. This is the highest number of IPO filings in the first six months of a year since 2007. However, these companies may put their plans on hold considering the recent market volatility. Notably, not a single company has launched its IPO in June, making it the first month with an IPO drought since August 2020.

⭐Crude oil rises on supply concerns 🛢️

Oil prices rose by about 1.8% on Tuesday after the United Arab Emirates (UAE) said that it is producing oil at its maximum capacity and has no spare capacity. The nation is pumping 3.1 million barrels per day as per the OPEC agreement. Due to rising oil prices, OPEC nations like the UAE and Saudi Arabia are being urged to utilise their spare capacity and boost oil production to make up for the lost Russian oil supply after the Ukraine conflict.

⭐Rupee tumbles to all-time low 💸

The rupee declined by 46 paise to a record low of 79.08 against the US dollar on Tuesday. Consistent outflow of foreign funds, especially by the FIIs, is weighing on the rupee. Further, today’s rise in crude oil prices has also put pressure on the rupee.

In Focus

Zomato's Blinkit buy leaves bad taste

On Friday, Zomato served up a ₹4,447 crore acquisition of quick-commerce company Blinkit (earlier known as Grofers). But Investors seem to have given it a pass. The online food delivery company's shares have dropped 13% since Monday. Why did investors lose appetite? Let's chop it down.

But first, here's what quick commerce means. It refers to delivery of grocery items in 10-20 minutes. This offers convenience to customers, who may otherwise have to visit a nearby kirana store. It has become one of the fastest growing e-commerce segments in India, which is expected to touch a market size of $5.5 billion by 2025. 

However, while the Blinkit acquisition may look delicious, it's not so easy to digest. Investors are worried that the purchase may delay Zomato's journey to profitability. This is a concern because Zomato has already been seeing widening losses. In Q4 of FY22, the company's net loss tripled to ₹359 crore. Further, Investors were also unhappy with Blinkit's price tag, which is relatively higher than global peers.

However, this could be a case of near-term pain for long-term gain. The acquisition is expected to increase the order density (number of orders from a specific area) for Zomato, which may lower the cost per delivery. Notably, Blinkit reported 79 lakh orders in May. That's roughly half of the average number of orders Zomato receives in a month. And keep in mind that Zomato operates in 1,000 cities while Blinkit only operates in 15. 

In essence, the Blinkit acquisition could be like having leafy vegetables. They may not taste great, but they're good for long-term health.

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Good to know

What is the strike price?

A strike price is a predetermined price at which the security or any underlying asset can be bought or sold, depending on whether a trader holds a call or a put option. Simply put, it is an anchor price around which trade revolves. For example, if the Nifty50 spot is trading at 15,800 level, then 15,800 is one of the strike prices at which a trader can trade the call and the put contracts. The strike price is an essential factor in calculating the profit or loss for all options positions.

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