Market HIGHLIGHTS: Sensex snaps 2-day gaining streak, ends in red, Nifty below 16,250; SBI, Bharti Airtel drag

The sharp rally in the previous session failed to add fizz in today's trades, as the market did not capitalise on the firm start and rather turned range-bound to end marginally lower. The rampant FII selling has been weighing on investors' minds, and worries about subdued growth going ahead due to rising interest rates is hurting the sentiment. On daily charts, the Nifty has formed a small bearish hammer kind of candlestick formation, which indicates a range bound activity in the near future. For day traders, 16200-16150 levels would act as key support zones. Above the same, the index could move up to 16400-16450. On the flip side, below 16150, uptrends could be vulnerable and could retest the level of 16050-16000. Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities

With the support from Pharma and FMCG stocks, the domestic market had a steady run until the weak opening of the European market. UK’s soaring retail inflation number along with Fed Chair’s reassurance on bringing down the inflation, disturbed the sentiment, risking sharper rate hikes. With prospects of a sizeable interest rate hike by the global central banks, investors are advised to allocate higher weightage to sectors that are least affected by such policies like defensives. Vinod Nair, Head of Research at Geojit Financial Services

BSE Sensex ended 110 points or 0.2 per cent down at 54,208, while NSE Nifty 50 index fell 19 points to settle at 16240

Though Kiddopia is facing growth headwinds, E-Sports and Real Money Gaming (RMG) is expected to grow at a strong pace due to consolidation of OML and OpenPlay respectively. Overall, we expect revenue/PAT CAGR of 28%/52% respectively over FY22-24E and the growth story remains intact despite near term challenges. Consequently, we retain our BUY rating on Nazara with a DCF based TP of Rs1,747 (earlier Rs2,550). The stock currently trades at EV/sales multiple of 3.9x/3.2x our FY23/FY24 estimates and post recent correction, valuation is now more in sync with global peers like Electronic Arts and Zynga which trade at 1 year forward multiple of 3-4x. Prabhudas Lilladher

The salary of senior corporate executives is projected to increase by 8.9 per cent this year in comparison to 7.9 per cent growth last year, a recent survey conducted by Aon Plc shows. This is the highest jump in salary of C-level executives in five years, according to Aon’s 2022 Executive Rewards Survey in India. The projected jump can be attributed to the positive business sentiment in the country, and as companies look inward to attract and retain internal talent, Aon added. Read full story

This is a major and a very positive move. Giving greater decision making power to board of directors of public sector enterprise (PSE) holding company to take decisions regarding disinvestment – both strategic and of minority stake sale – and even for closing down of such subsidiaries will lead to greater autonomy in the hands of such board of directors. At the same time, check and balances have been ensured that such autonomy is not unregulated. The proposal states that principles for such disinvestment and closure will be laid down that board of directors of PSE holding company will have to followed. This is a welcome move, and will speed up decisions making process and should achieve larger objective of disinvestment of government stake in such companies. Lalit Kumar, Partner, J Sagar Associates

Hindustan Unilever, UltraTech Cement, Asian Paints, Sun Pharma, Axis Bank were top BSE Sensex gainers.

For FY23, KJC targets volume/revenue growth of ~15-20%/20-25%. It expects India’s tiles export to increase by ~35% YoY, as sharp spikes in gas and electricity prices in European countries have increased Indian tile’s competitiveness. This in turn should be positive for domestic players. KJC has expanded its tiles capacity by 17% in Apr-May’22, bolstering its volume growth and market share gain. Factoring in the higher gas price impact, we have cut our FY23E EBITDA estimate by 4%. Institutional Research Desk at HDFC Securities

Net profit jumped 57.9% at Rs 552.4 crore against Rs 349.8 crore (YoY)

NII up 14.7% at Rs 1,609.5 crore against Rs 1,403.2 crore (YoY).

Gross NPA at 9.82% against 10.4% (QoQ).

Net NPA at 2.65% against 2.63% (QoQ).

Provisions at Rs 1,014 crore against Rs 1,065 crore (QoQ) and against Rs 1,380 crore YoY.

Board of directors of Ruchi Soya Industries approved business transfer agreement (BTA) with Patanjali Ayurved (PAL) to acquire the food retail business undertaking of PAL which consists of manufacturing, packaging, lablling and retail trading of certain food products along with manufacturing plants located at Padartha, Haridwar, and Newasa, Maharashtra, as a going concern on a slump sale basis.

Homegrown FMCG major ITC Limited (ITC) is expected to report a healthy growth of 10-12 percent on-year in consolidated profit after tax (PAT) for the fourth quarter of 2021-22. The company will declare its results on May 18. Sequentially, however, the profit is likely to remain flat. Experts attribute the decline in profit to the year-on-year decline in in-home consumption and erosion of margins due to inflationary pressure on input costs. Experts expect the cigarette-to-hotel conglomerate to report consolidated earnings of Rs 4,100–4,250 crore for the quarter ended March 2022.

S&P Global Ratings on Wednesday cut India's growth projection for the current fiscal to 7.3 per cent from 7.8 per cent earlier on rising inflation and the longer-than-expected Russia-Ukraine conflict. In its Global Macro Update to Growth Forecasts, S&P said inflation remaining higher for long is a worry, which requires central banks to raise rates more than what is currently priced in, risking a harder landing, including a larger hit to output and employment.

Bharti Airtel share price fell 5 per cent from day’s high to Rs 691 apiece on BSE on Wednesday, ahead of the company’s conference call this afternoon. The stock rose nearly 3 per cent in the early trade but soon turned red. The telecom major posted a net profit of Rs 2,008 crore for the March quarter, a 142% jump sequentially. Analysts at Motilal Oswal Financial Services said that the increase of 4.7 per cent stake in Indus Towers along with interest capitalisation of AGR liability had left limited scope for deleveraging (net debt at Rs 1,235 billion) despite Rs 47 billion of FCF generation in the quarter, which acted as a key negative. Read full story

Indian equity markets were trading red on Wednesday as benchmark indices gave up early morning gains in noon deals. The BSE Sensex was down 114 points at 54,203, and the NSE Nifty50 fell 25 points to 16,233. In the broader markets, the BSE MidCap and SmallCap indices fell 0.25% and 0.11% respectively. Sectorally, metal, oil & gas, realty and PSU bank stocks were subdued on the NSE, while buying was seen in the power, auto, bank, FMCG names. Read full story

Rajesh Palviya, VP – Research (Head Technical n Derivative), Axis Securities said that the recent pullback is still not sufficient for market to sustain at higher level. Nifty has not able to cross 20- DMA yet. Moreover, ahead of Thursday's weekly F&O expiry, call writing was at 16400-16500 strike, which may act as resistance.

Amazon India said Wednesday that it plans to digitise local stores into the aegis of 'Digital Dukaans'. The world's largest retailer plans to digitize 1 crore small businesses in India by 2025. So far, 40 lakh small businesses and local stores listed on Amazon are already digitised.

Ethos has reported a 15% on-year decline in Revenue in FY21, impacted by the second wave of the pandemic. The profit declined to Rs 5.8 crore in FY21, from Rs 9.9 crore in FY19. The company’s bottom line saw a significant improvement in Apr-Dec 21 period to Rs 16 crore, aided by unlocking of the economy. At the higher end of the price band, Ethos IPO is priced at an expensive PE ratio of ~96 times FY22 annualized EPS. The company does not have any listed peers. Given factors such as decline in revenue and profits, low margins, and aggressive valuations, we remain “Neutral” on the long-term prospects of this issue. INDMoney

Third month Nifty futures trading at discount to spot at 16,304.40 level. Currently NSE Nifty 50 was ruling at 16355.15 levels in late morning deals on Wednesday.

Ethos’ Rs 472-crore IPO opened for subscription on Wednesday, and will close on 20 May. Chandigarh-based Ethos has garnered Rs 141.69 crore from 9 anchor investors ahead of its initial share sale. The company informed the exchanges that it has allocated 16.13 lakh shares at Rs 878 per share on Tuesday, May 17, 2022 to anchor investors. Read full story

Bharti’s mobile revenue growth has been the highest in the industry in 6 out of the past 7 quarters. Bharti kept opex under check (flat QoQ) despite the continued rollout; however, this was negated by 17%/19% in employee costs/SG&A costs. Bharti net debt marginally rose to Rs1.6trn as of end-4Q from Rs1.59trn. Adding US$1.5bn perpetual bond, net debt to 4Q annualized Ebitda stood at 2.67x (vs. 2.89x as of end-3Q). Manish Jeloka, Co-head Products & Solutions, Sanctum Wealth

Hindustan Aeronautics Ltd (HAL) shares have soared 35% so far this year, outperforming NSE Nifty 50 index which has fallen 7%. In the past one year, HAL share price has surged 67% and analysts at ICICI Securities see a further upside of up to 72% going forward. “We maintain BUY with a DCF target price of Rs 2,618/share. HAL remains on the strategic DPSU and (in our view) can potentially garner 50% of Indian defence order inflow (i.e Rs 2.5 trn) over next 5 years. The stock remains inexpensive,” the brokerage said in its note. This comes after the state-owned aerospace and defence company on Friday reported a 90.7% surge in net profit at Rs 3,101.96 crore for the quarter ended 31 March, 2022. HAL shares were trading at Rs 1,681 apiece on BSE, down 0.6% intraday.

Read full story

Sharp relief rallies triggered by short covering happen even in bear markets. It remains to be seen whether the rally has enough steam to sustain, particularly when the latest WPI inflation print has come at a disturbing 15.08 %. RBI can be expected to turn more hawkish in the coming policy meets. Investors can give priority to segments which will not be impacted much by rising inflation and stocks of companies with pricing power to pass on increased costs to consumers. High quality IT and telecom stocks are better placed to weather the storm. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

Gold Price Today, Gold Price Outlook, Gold Price Forecast: Gold prices were trading lower in India on Wednesday despite positive global cues. On Multi Commodity Exchange, gold June futures were down Rs 279 or 0.56 per cent to Rs 49,894 per 10 gram. Silver July futures were ruling at Rs 60,623 per kg, down Rs 533 or 0.87 per cent. Globally, yellow metal prices edged higher as a weakening dollar countered pressure from stronger Treasury yields and an aggressive stance on inflation by the U.S. Federal Reserve chief, according to Reuters. Read full story

Gold price trade steady above the $1800 level amidst fall in Dollar index, increasing geo-political tensions and resurgence of Covid cases. Although prices did witness some pressure from the higher side after positive economic data and comments from Governor Powell. On data front, U.S. retail sales increased strongly in April, suggesting demand was holding strong despite high inflation and assuaging some fears that the economy was heading into recession; while Industrial production data also was reported better than expectations. There were some reports regarding missle strike from Russia at military facilities in Lviv, hence updates regarding these attacks will be important to keep an eye on. Focus today will be on the CPI data fro. U.K.,EU and a few housing numbers from the U.S. Broader trend on COMEX could be in the range of $1775-1840 and on domestic front prices could hover in the range of Rs 49,650- 50,250. Navneet Damani, Sr. Vice President – Commodity & Currency Research, Motilal Oswal Financial Services

Petrol and Diesel Rate Today in Delhi, Bangalore, Chennai, Mumbai, Lucknow: Petrol prices have now been left untouched for 42 consecutive days by oil marketing companies (OMC). Prices have not been changed since April 6, after OMCs hiked fuel rate by Rs 10 per litre through 14 price hikes across major cities that started on March 22. Petrol in the National Capital of Delhi is currently priced at Rs 105.41 per litre, after the last hike of 80 paise nearly a month ago. Diesel in the city is priced at Rs 96.67. Read full story

Nifty Bank index was up more than 0.6 per cent in Wednesday's session

Power Grid Corporation of India, NTPC, Tata Steel, and Nestle India were ruling in the red

On S&P BSE Sensex, 25 stocks out of 30 scrips were trading in the positive territory, led by gains in Bharti Airtel, Bajaj Finance, M&M, Tech Mahindra, and Reliance Industries Ltd (RIL), among others.

BSE Sensex jumped 260 points or 0.5 per cent to 54577, while NSE Nifty 50 was hovering near 16350 on Wednesday

The Indian Rupee is likely to depreciate on Wednesday amid elevated crude prices, inflation and recession fears and persistent FII outflows. The rupee slipped to a new low against the dollar Tuesday, as rising global crude oil prices exacerbated investor concerns on India’s current account deficit. Expectation of dollar outflows due to Holcim Group’s sale of its India cement business is also said to have added to rupee’s rout. The Reserve Bank of India likely intervened in the spot, forwards and futures markets, helping the local unit erase early losses against the greenback, according to analysts. Read full story