Bouncing back

Nifty50: 17,107 ▲ 119 (+0.7%)
Sensex: 58,074 ▲ 445 (+0.7%)

Dear reader, 

Here is a *weighty* issue for you to ponder over.

The World Obesity Federation has issued a warning about a looming health emergency. According to its report, more than half of the world's population will be obese or overweight by 2035. And do you know who could be the worst hit? Those aged between 5 and 19 years.
After that food for thought, let's chew the fat and tell you about all the key things from the markets today. (All puns intended!)

• After a strong opening, the markets ended in the green.
• Out of the Nifty50 universe, 26 stocks advanced.
• All eyes are now of the US Fed rate decision on Wednesday.

Among the Nifty sectoral indices, PSU Bank (+1.6%) and Private Bank (+1.4%) were the top gainers, while IT (-0.9%) and FMCG (-0.6%) were the top losers.

What’s trending

⭐ Gas distributors’ shares rise 

Shares of the major city gas distributors – Mahanagar Gas (+1.4%), Indraprastha Gas (+3.0%) and Gujarat Gas (+1.5%) – closed in the green today. From 1 April 2023 onwards, gas produced from old fields of ONGC and Oil India will have a price ceiling of $6.5 per MMBtu. Experts believe this will lead to a 24% fall in domestic gas prices and protect gas companies as well as consumers from volatile global gas prices. 

⭐ Linde India invest in renewable energy 

The manufacturer of industrial gas (+2.2%) bought a 18.3% stake in  renewable energy company FP Solar Shakti for ₹4.8 crore. According to the management of Linde India, this acquisition will help the company to buy renewable power, which will result in lower tariff and cost savings.

⭐ Route Mobile secures new order 

The cloud communications service provider (+0.01%) has forayed into Bangladesh’s telecom market. It has secured an order from Robi Axiata, which is the second largest network operator in Bangladesh. As per agreement, Route Mobile will deploy its unified communications as a service (UCaaS) solutions. 

⭐ Oil rises as banking crisis eases 

Oil prices are recovering from their 15-month low. This comes after UBS acquired its rival Credit Suisse. This takeover seems to have eased the concerns of a severe global economic slowdown, which is beneficial for oil demand.

In Focus

Can RIL shares stage a recovery?

Shares of the oil-to-retail conglomerate have been under pressure, trading near their 52-week low. However, after the prolonged slump in 2023, the shares of Reliance Industries (RIL) rebounded today and moved into the top gainers in the Nifty50 index. 

Let’s understand the reason behind the fall and rise of RIL’s shares and the outlook for the company. 

Decoding the fall

As the global uncertainties mount, foreign investors have been offloading Indian equities. Foreign investors have reportedly reduced their stake in Reliance Industries – from 24.7% in December 2021 to 23.48% in December 2022. 

Also, RIL’s net debt rose by 18% quarter-on-quarter to ₹1.1 lakh crore in Q3FY23. This was led by 5G rollout and ramping up of retail business. These concerns have been weighing on the RIL shares. 

There is also a lack of clarity on increasing tariff rates, according to analysts. The telecom business’ average revenue per user (ARPU) marginally rose to ₹178.2 in the December quarter from ₹177.2 in the September quarter. As acquiring 5G spectrum will require significant investments, there is a need for a tariff hike, according to analysts. 

But it’s not all gloom and doom for Reliance Industries. 

Improving outlook

The conglomerate’s outlook seems to be improving. The weakness in crude prices and windfall gain tax cut are expected to provide a boost to the refining margins. Oil prices have been declining due to concerns of a severe global slowdown. 

Analysts also observe that the launch of portable 5G devices (Jio Airfiber) and affordable 5G smartphones could be key triggers for growth going ahead. The company is also planning to make inroads in the beverage market through the relaunch of Campa Cola. 

While multiple factors could turn in favour of RIL, it remains to be seen whether shares of the conglomerate will stage a comeback.

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Phrase of the day

Going Long

When you buy a stock, futures or an option contract with the hope that its price will rise, it is called going ‘long’.  When should you go long, find out from this chapter What does going Long mean? 

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