Bajaj Finance Q2 earnings in line, Adani FPO sees low demand & more

Nifty50: 17,604 ▼ 287 (-1.6%)
Sensex: 59,330 ▼ 874 (-1.4%)

Hi!

“I guess there are never enough books.”

It seems a couple from the U.S. has taken this famous quote by celebrated author & Nobel laureate John Steinbeck rather seriously. 

An American archaeologist and writer named Kathleen O’Neal Gear shared on Twitter photos of her personal library which has about, (believe it or not) 32,000 books. She captioned the post, “Our personal library has about 32,000 books. I guess other people bought cars and boats…”.

Her post garnered a lot of reaction from fellow Twitterati. Some appreciated her efforts, some shared pictures of their own libraries and there were a few who wondered if the couple had read them all!

From this heartwarming story, let's get you some updates from markets today which remained pretty cold. 

• The markets witnessed broad-based selling pressure.
• Of the Nifty50 universe, 37 stocks declined. 
• Recession fears and Fed meet weighed down the markets. More on that later.

Among the Nifty sectoral indices, Auto (+1.0%) and Pharma (+0.5%) were the top gainers, while Oil & Gas (+5.6%) and PSU Bank (+5.4%) were the top losers.

What’s trending

⭐ Bajaj Finance meets street estimates  

For the December quarter, the non-banking finance company’s (-0.4%) net profit rose 40% YoY to ₹2,973 crore. The rise in the net profit was supported by a 24% rise in the net interest income to ₹7,435 crore. Its gross non-performing assets or bad loans also dropped to 1.14% of the loan book from 1.73% in Q3FY22. 

⭐ Dixon cuts revenue guidance, tanks  

Shares of the electronic manufacturing services company (-18.9%) tanked after it lowered its revenue estimate for the current financial year between ₹12-13,000 crore. The company had earlier estimated a revenue of ₹15,000 crore. The management has lowered the guidance reportedly due to the slowdown in its mobile business. 

⭐ Dr Reddy’s launches eye drops

The pharma company (+2.6%) has announced the launch of the generic version of the Durezol eye drops in the US. This comes after USFDA approval. The eye drops clocked $40 million in sales for the 12-months ending in November 2022. 

⭐ India CAD manageable, says RBI

The Indian central bank governor said that India’s current account deficit (imports exceeding exports) is eminently manageable and within parameters of viability. He said that slowing global demand was weighing on merchandise exports. In the September quarter, India’s CAD stood at $36.4 billion – a nine year high of 4.4% of the GDP.   

⭐ Adani FPO receives tepid response 

On day 1, the follow-on public offer of Adani Enterprises (-18.3%) was subscribed 1%. The diversified conglomerate is looking to raise ₹20,000 crore for investing in business and paring debt. Click here to apply for the FPO on Upstox.

In Focus

5 reasons why the Indian markets are jittery

After outperforming its global peers in 2022, the Indian markets have been stuttering this year. Facing intense selling pressure, the benchmark Nifty50 is down 6.7% from its all-time-high in December last year. 

So, let’s take a look at the 5 factors that are weighing down the Indian markets: 

1. The Chinese option

Foreign investors are looking East towards China whose economy has reopened after a prolonged and stringent lockdown. A record $2.5 trillion rise in household savings are expected to fuel a “revenge spending” in China. This augurs well for Chinese businesses, which have been severely dented by the lockdowns.   

2. High commodity prices

China’s reopening is also fuelling a rise in commodity prices. For instance, the oil prices have rebounded from a low of $75 per barrel in December 2022. The possibility of strong demand from the world’s largest importer of oil – China – has pushed prices to $87 per barrel. India imports almost 85% of its crude requirement. Thus, rising oil prices could impact Indian companies’ margins or profitability. This is because oil is an important raw material in various sectors including FMCG, paints, and cement.

3. The US rate hike threat 

In the West, the US Fed officials have vowed to battle inflation until it touches their target of 2%. U.S inflation is still around 5.7% The Fed has already hike rates by 4.25% and more could be in the offing. ICYDK, rising interest rates make the US government bonds or debt much more attractive for foreign investors. This is because they are considered as a safe haven and provide relatively better returns.  

4. Global recession fears 

The rate hikes could also push the US and European economies into a recession. This could lower the demand for India’s goods and services abroad. In fact, the Indian tech companies, which generate significant revenue from these markets, have warned that there are some early signs of a slowdown.  

5. A well-balanced budget 

Meanwhile, India’s finance minister Nirmala Sitharaman has promised that the budget will address the concerns of high inflation as well as help in sustaining the growth. With a general election coming up, the government could prioritise upping public spends. In order to finance that the government could end up borrowing more next financial year. This could increase the cost of borrowing for the government as well as the companies. 

These concerns seem to be weighing down the Indian markets for now. But it’s important to note that meanwhile, India’s consumption story is still intact and it could continue being one of the fastest growing economies in the world.

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What is a fiscal deficit?

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