Calm waters

Nifty50: 15,732 ▼ 42 (-0.2%)
Sensex: 52,693 ▼ 153 (-0.2%)

Howdy, folks!

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Inflation is soaring, and central banks across the world are looking to hike rates. As a result, investors continue to remain cautious. More on this below.

• After a gap-down opening, markets closed in the red for the third consecutive day.
• Investors seemed cautious ahead of the US Fed meeting scheduled to begin on Tuesday. It is widely expected to raise interest by 75 basis points.
• India’s wholesale inflation (WPI) rose to 15.88% in May from 15.08% in April. WPI is seen as a lead indicator for retail inflation.

Among the Nifty sectoral indices, Realty (+0.8%) and Metal (+0.3%) were top gainers, while Oil and Gas (-1.2%) and Auto (-0.5%) lost the most.

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What’s trending

⭐ Asian Paints loses shine 🎨

ASIANPAINT (NSE): 2,644 ▼ 16.7 (-0.6%)

Shares of Asian Paints fell 3% intraday and hit a 52-week low. Investors are concerned that rising inflation can impact the company’s margin and demand for its products. The company said that geopolitical tensions could further worsen inflation across key commodities. Another factor affecting the company’s prospects is rising competition. Recently, Grasim announced its plan to enter the paints business with a ₹10,000 crore capex plan.

⭐ Adani Group bets big on green hydrogen ⚛️

ADANIENT (NSE): 2,197 ▲ 117.8 (+5.6%)

Adani Group will join hands with French oil company TotalEnergies to jointly develop the green hydrogen ecosystem in India. The joint venture, named Adani New Industries Ltd (ANIL), will invest $50 billion over the next 10 years. The company plans to develop a green hydrogen production capacity of 1 million ton per year by 2030.

⭐ Bajaj Auto defers share buyback 😞

BAJAJ-AUTO (NSE): 3,693 ▼ 187.3 (-4.8%)

The two-wheeler maker’s stock skidded 5% after its board decided to defer the share buyback plan. The company said it required "further deliberations". Had it approved the proposal, this would have been the company's first buyback since 2000.

⭐ Torrent Power reaches for the sun 🌞

TORNTPOWER (NSE): 471 ▲ 15.1 (+3.3%)

Torrent Power’s stock was up 3% after it announced the acquisition of a 50 megawatt solar power plant in Telangana from SkyPower Group for ₹416 crore. With the latest acquisition, the Gujarat-based power company's total power generation capacity will reach 4.7 gigawatt, with renewables contributing more than 1.6 gigawatt.

⭐ It's gonna rain jobs 😀

Job creation is likely to gain traction in Q2 of FY23, as employers are very optimistic about their hiring outlook. According to a survey of 3,080 employers in India, about 63% said they will hire more in the upcoming quarter to speed up the post-pandemic recovery and sustain growth. Meanwhile, 12% plan to decrease hiring and 24% expect to keep their workforce steady. The remaining 1% were unsure.

In Focus

India’s $1 trillion export dream

According to Exim Bank, the total merchandise exports from India is expected to increase by over 22% to $117.2 billion in the first quarter of FY23, (India’s merchandise exports in Q1FY22 stood at $95.5 billion). This will be the fourth consecutive quarter when merchandise exports will cross the $100 billion mark.

The rise in exports is mainly attributed to the post-pandemic increase in global commodity prices along with trade diversion because of the ongoing geopolitical tensions. At the same time, exports from India have also become attractive because of the depreciating rupee, which hit an all-time low of ₹78.2 against the dollar on 13 June. The fall in the rupee helps export-oriented businesses as each dollar earned abroad will get traders more rupees on conversion.

Overall, Indian merchandise exports have witnessed a significant surge after the Covid-19 pandemic. According to the Ministry of Commerce and Industry, India’s exports increased by 44% to $421 billion in FY22, surpassing the $400 billion mark for the first time and comfortably above the five-year average of $300 billion. 

Petroleum products, engineering goods (iron & steel), gems & jewellery, and agricultural products reported an uptick in exports in the last fiscal. Further, government initiatives like production-linked incentive (PLI) schemes for sectors such as mobile manufacturing, electronic and textile products have benefitted the export industry.

The $400 billion export milestone has paved the way for further growth and will potentially contribute towards the ambitious target of $1 trillion of merchandise exports by 2030 set by the Commerce Minister.

IPO Corner

Bharat FIH, a subsidiary of Taiwan-based Foxconn Technology, has received an approval from SEBI to launch its ₹5,000 crore IPO. The public issue will be a combination of an offer for sale and a fresh issue. Bharat FIH provides manufacturing and assembly service for Xiaomi mobile phones in India.

Good to know

What is a bear market?

The stock markets enter a "bear market" when they experience prolonged declines. It is a condition when benchmark indices drop 20% or more from a recent peak over a period of time. On Monday, the US-based S&P 500 dropped almost 4% and entered a bear market, after sliding 21% from its record high registered in January this year. To put into perspective, India’s benchmark index, Nifty50 is down by nearly 16% from the all-time high of 18,604 set on 19 October 2021.

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