Swing and miss

Nifty50: 18,003 ▼ 66 (-0.3%)
Sensex: 60,346 ▼ 224 (-0.3%)

Hey there, people!

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• Benchmark indices recovered from early losses but closed lower due to profit booking in the last hour of trade.
• In all, 29 of the Nifty50 stocks closed in the red. 
• India’s wholesale inflation eased to 12.4% in August as compared to 13.9% in July.

Among the Nifty sectoral indices, PSU Bank (+1.7%) and Metal (+1.5%) saw the most gains, while IT (-3.3%) and Oil and Gas (-0.8%) were the top losers.

What’s trending

⭐ Vedanta eyes second semiconductor plant

VEDANTA (NSE): 304 ▲  27 (+9.8%)

According to reports, Vedanta is considering its second semiconductor chip and display manufacturing facility in India. Earlier, the company had announced that it will invest ₹1.5 lakh crore to establish a chip-making facility in Gujarat. The production at the Gujarat facility is expected to start by 2024.

⭐ PVR & INOX merger gets a CCI boost

PVR (NSE): 1,927 ▲ 17 (+0.9%), INOXLEISUR (NSE): 541▲ 24 (+4.7%)

Shares of multiplex chain operators PVR and INOX rose by up to 6% intraday after the Competition Commission of India (CCI) dismissed a complaint against their proposed merger. In August, a non-profit group had complained to CCI that the merger would have anti-competitive effects on the film exhibition industry and sought a detailed probe. However, the CCI set aside the complaint, stating that the apprehension about the likelihood of anti-competitive effects cannot be a subject of probe.

⭐ KEC International secures large orders

KEC (NSE): 434 ▲  5 (+1.1%)

KEC International has secured new orders worth ₹1,100 crore across various business verticals. The company's transmission and distribution (T&D) business secured orders for T&D and cabling projects in India, Middle East and Africa. Meanwhile, its railway business secured orders in the technologically enabled and conventional/emerging segment. Finally, the firm’s oil and gas pipeline segment also secured an order for laying cross-country pipelines in the country.

⭐ India’s trade deficit widens

India’s trade deficit more than doubled to $27.9 billion in August 2022, from $11.7 billion in August 2021, as per the data released by the commerce ministry. While exports rose marginally by 1.6% to $33.9 billion, imports jumped by 37.28% to $61.9 billion. Imports of major commodities like crude oil, silver, coal, coke and vegetable oil surged during the period.

In Focus

FMCG stocks fly off the shelves

FMCG stocks have given handsome returns to investors in 2022. The Nifty FMCG index has jumped by 20.5% so far this year, as compared to the 3.7% rise in the Nifty50 during the same period. What’s fuelling this stock rally? Let’s unpack this.

During the first quarter of FY23, most FMCG companies reported mixed results, reporting a margin impact due to high commodity prices. To overcome the cost inflation, most FMCG companies raised prices of their products, which led to subdued volume growth.  

However, in the past few months, prices of major commodities such as palm oil, packaging material and crude oil have eased. Prices of palm oil, one of the most widely used commodities in the FMCG industry, have declined by over 46% from its April peak. 

Market experts believe that the cumulative impact of price hikes and falling commodity prices will start benefiting the FMCG stocks in the upcoming quarters.

The management commentary from top FMCG companies is also confident about a demand revival supported by normal monsoon across the country, which will boost rural consumption. Further, high demand during the ongoing festive season will act as a trigger for volume growth.

While FMCG stocks got investors excited, will they be able satiate their appetite? We’ll have to wait and watch.

IPO corner

The IPO of precision engineering products maker Harsha Engineers International was subscribed 2.8 times on Day 1. The portion for retail investors was subscribed 3.2 times, while the non-institutional investors portion was subscribed 5.8 times. Click here to apply for the IPO on Upstox.

Good to know

What is arbitrage?

Arbitrage is the strategy of deriving profits by simultaneously buying and selling of assets on different platforms, exchanges, or locations. Arbitrageurs take advantage of the minor differences in the prices of the same asset (e.g. stocks) on different exchanges. They typically buy a specific quantity of the asset on one exchange and sell it on another within a matter of seconds. Also, the pay-off on the trade should be large enough to cover the transaction cost.     

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