IT stocks get jitters, PSU insurance stocks fly & more

Nifty50: 18,420 ▲ 151 (+0.8%)
Sensex: 61,806 ▲ 468 (+0.7%)

Namaste, friends!

In the nail-biting world cup final, Football's 'Messi'ah fulfilled his and Argentina's most cherished dream of becoming the world champs again after 36 years! Akin to the thrill of football fans, the zestful markets bounced back after a losing streak.

• Unlike its Asian peers, the Indian market registered a healthy gain.
• Out of Nifty 50, 42 stocks ended in the green.
• In this week, traders would critically observe whether today’s rise has wings to break recent highs or was it just a bounce in the short-term downtrend. 

Among the Nifty sectoral indices, Auto (+1.5%) and FMCG (+1.4%) were the top gainers, while IT (-0.5%) and PSU Bank (-0.1%) were the top losers.

What’s trending

⭐ IT stocks get jitters post Accenture’s results

TCS (NSE): 3,205 ▼ 35 (-1.0%), INFY(NSE): 1,510 ▼ 12 (-0.8%)

Despite the bullish mood on the street today, Indian IT stocks witnessed selling pressure. The global IT major, Accenture recently declared its quarterly results and also said that it expects revenue growth of 8-11% for 2023. It must be noted that the revenue growth for 2022 was 26%. The relatively lower growth rate indicated softening of demand for IT services in 2023. It is observed that Accenture’s results and guidance set expectations for the earnings of Indian IT firms. (Accenture follows a September-August financial year)

⭐ PSU insurance stocks fly

GICRE (NSE): 185 ▲ 18 (+11%), NIACL (NSE): 133 ▲ 10 (+8.4%)

PSU stocks continue to hog the limelight! However, this time it's not PSU banks, but government-owned insurers. GICRE and NIACL were up nearly 10% today and have already gained over 22% so far this month. 

Earlier this month, the Finance Ministry proposed the issuance of one licence for all kinds of insurance businesses - general, life, and health. It was also suggested that insurance companies should be permitted to distribute other financial products e.g. mutual funds. This could open up newer business prospects for these insurance companies. 

⭐ Airtel and Jio add subscribers

BHARTIARTL (NSE): 839 ▲ 16 (+1.9%), RELIANCE (NSE): 2,603 ▲ 37 (+1.4%)

Leading telecom stocks were in the spotlight today. As per TRAI, Airtel and Reliance Jio added 14 lakh and 8 lakh users, in October, respectively. Meanwhile, Vodafone Idea lost 35 lakh subscribers during this period. Reliance Jio continues to lead with a 36.8% market share.

⭐ KEC International secures new order

KEC (NSE): 477 ▼ 0.4 (-0.08%)

KEC International, an RPG Group company, has bagged multiple orders worth ₹1,313 crore. The company’s transmission and distribution arm has secured as many as three different orders in India, Thailand and Nepal. Additionally, it has also secured a large order for a 500 MW solar project in India. With these orders, KEC’s total year-to-date order in-take stands at  ₹14,500 crore, a jump of 20% over the last year.

In Focus

Sugar stocks sweeten up…

Shares of major sugar producers such as Shree Renuka Sugars, Dhampur Sugar and Dwarikesh Sugar witnessed strong investor interest and rose 5-11% today. This happened after the GST on ethyl alcohol was reduced from 18% to 5%. Wondering, what’s the connection between sugar and ethyl alcohol? Let’s find out!

Ethyl alcohol, or ethanol, is a by-product of the sugar-making process. Sugar companies sell ethanol to oil marketing companies, which blend it with petrol. While the GST cut does not directly add to the profits of the sugar companies, sentimentally it reinforces the positive stance of the government to support higher blending. 

The government plans to achieve 20% ethanol blending in petrol by 2025 in a bid to decrease India’s dependency on imported crude oil. 

The sugar sector is also witnessing further tailwinds. Next month, the government is expected to consider extending the sugar export quota. If this materialises, it will not only generate export-led growth for sugar makers but also keep sugar prices healthy in the domestic market. 

Lastly, international sugar prices have gained nearly 13%, so far, in the December quarter. This makes sugar exports even more lucrative. 

All in all, these are some of the factors, in favour of the sugar sector, that are drawing investors’ attention.

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Good to know

What is Export Quota?

An export quota is a government-imposed limit on the volume or value of goods that can be exported in a specified period. Quotas aim is to optimise the domestic supply and thus prevent prices from going out of control. However, at times, export quotas limit the export-led growth opportunities for domestic producers.

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