Red Day Again

Nifty50: 17,914 ▼ 187 (-1.0%)
Sensex: 60,115 ▼ 631 (-1.0%)

Hello!

It seems taking a flight in India these days is nothing short of a (mis)adventure. At least, the recent series of bizarre events seem to suggest so.

As if ugly mid-air brawls and pee-gate weren’t enough, another mindboggling incident has been reported, this time at Bengaluru airport. Here, a domestic flight took off to Delhi, leaving behind its 54 passengers waiting in a bus on the tarmac! 

Unbelievable, right?

While you let that news sink in, let us tell you why markets faced turbulence today.

• The markets ended in the red amid rising volatility.
• Out of the Nifty50 universe, 33 stocks declined.
• Weakness in the global markets impacted domestic indices.

Among the Nifty sectoral indices, Auto (+0.2%) and Healthcare (+0.1%) were the sole gainers, while PSU Bank (-2.6%) and Financial Services (-1.3%) were the top losers.

What’s trending

⭐  Airtel’s Africa push

BHARTIARTL (NSE) : 795 ▼ 24 (-2.9%) 

Bharti Airtel’s subsidiary has acquired 4G and 5G spectrums for $316 million in Nigeria. Airtel Africa said the additional spectrum will support its investment in expanding the network for mobile data and wireless home broadband. Airtel Africa contributed around 29% to Airtel’s revenue.

⭐ Sona BLW in the fast lane 

SONACOMS (NSE) : 447 ▲ 25 (+6.0%)

Shares of the auto component maker soared 8% intraday as it announced the acquisition of Serbia-based NOVELIC. The company is acquiring a 54% equity stake in NOVELIC for €40.5 million. NOVELIC is a fast-growing company in the ADAS (advanced driver assistance systems) sensors market. It has been profitable since its inception in 2012.  

⭐ Banks ‘bond’ with depositors

Banks’ bond issuances have hit a record level of ₹91,500 crore in FY22. This comes as banks are going all out to woo depositors and bridge the credit-deposit gap. Banks have already hiked interest rates on deposits. Between May and November 2022, on average the deposit rates have gone up by 0.55%. However, with consumption reviving, the demand for loans has outstripped the deposits.

In Focus

Cementing growth

Major cement companies are on an expansion spree. UltraTech, Shree Cement and JK Cement have chalked out plans to increase their capacity. Cement makers are expected to add 80-100 million tonnes capacity by 2025. Let’s understand why cement companies are increasing their capacities. 

1. Robust housing demand 

A major tailwind for cement companies could be the strong demand in the realty sector. Rising rentals, work from home trend and new launches are expected to fuel housing demand in 2023. In fact, in 2022, the housing sales grew by 54%, hitting a 10-year high of 3.6 lakh units.

2. Infra push

The demand for cement is also driven by infrastructure upgrade (construction of roads and bridges) and rural housing. The government is expected to invest in these segments before the 2024 general elections. Against this backdrop, industry estimates suggest that India’s cement demand could reach 500 million tonnes annually by 2027, up from 350 million tonnes currently.

3. Budget outlay

The upcoming union budget could provide further impetus. Last year, India’s finance minister Nirmala Sitharaman allocated ₹7.5 lakh crore for India’s infrastructure to revive a pandemic-dented economy. Experts believe that the trend could continue this year too, ahead of the general elections in 2024. And the biggest beneficiaries of this could be the cement companies.

While the outlook looks rosy, risks also persist. The geopolitical conflict has triggered an energy crisis, which led to an increase in input and logistic costs of cement companies. This directly impacted the cement companies’ profitability. And the high crude prices could once again play spoilsport. 

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Good to know

What is a bond?

A bond is a fixed income instrument which a company or an institution issues to borrow money from individuals. The borrower has to pay interest and return the principal amount to the investors within a specific period. The interest payment on these assets could be fixed or variable based on the agreement between the lender and borrowers. More importantly, bonds are also tradeable like shares. 

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