RBI policy, macro data, cos’ earnings to decide market course this week, say experts
The domestic equity market in this coming week will be driven by a host of key developments like RBI monetary policy, macro-economic data release and corporate earnings, analysts said.
At the start of the week, the market will also take cues from July auto sales numbers which signal a recovery in the sector hit hard by COVID-19.
With most parts of the country in unlock phase, the automobile industry has performed better in July over the previous month in terms of sales and is now marching towards normalcy in terms of production as well.
“Going forward, markets would react to auto sales numbers. On the event front, they would also be keeping a close watch on the RBI monetary policy,” said Ajit Mishra, VP Research, Religare Broking. Read more
Stock Update: Tata Motors share price rallied 8 percent on Monday after the auto giant reported its June quarter earnings, with revenues down about 48 percent year-on-year (YoY) as global sales slumped. However, brokerages remained bullish on the stock as well as the management commentary.
On the JLR sales front, Dr Ralf Speth, the outgoing CEO of JLR said ,”As the lockdowns ease, we will emerge from the pandemic with our most advanced product line-up yet, and with the financial and operating measures in place to return to long-term sustainable profit.”
CLSA in its brokerage report upgraded the auto giant to ‘Buy’ from ‘Underperform’, by raising the target price to Rs 135 from Rs 103/share earlier.
It said, “Q1 was significantly driven by aggressive cost reduction measures. Both JLR and India’s businesses have surprised on EBITDA and FCF (free cash flow) despite volume decline of 45-82 percent YoY.”
Market Watch: Prakash Diwan, Market Expert
State Bank of India
“I still haven’t got the conviction that banking space is already out of the woods that I would want to start allocating money to it in terms of fresh buying. If that were to happen it would still be private sector banks, it would very clearly be towards the private sector banks and not an SBI. For me it is still a pass.”
“My channel checks with dealerships tell me that it is not some exuberance that has come back into people wanting to really own that. In fact it is a pre-owned market which is getting a buzz much faster. People are actually looking at pre-owned cars, second hand cars in a much bigger way and from that perspective if you see the kind of buying that will happen will be more towards entry level diesel passenger vehicles. Mahindra & Mahindra (M&M) which has only shown tractor sales recovery and not yet PV sales will probably be a very key beneficiary.”
Opening Bell: Sensex opens 200 points lower, Nifty around 11,000; banks drag
The Indian indices opened lower on Monday, tracking Asian peers as a global surge of new coronavirus cases showed no sign of abating. The decline in the domestic indices was led by index heavyweights RIL, HDFC Bank, Kotak Bank, Infoaya and HDFC. At 9:18 am, the Sensex was trading 234 points lower at 37,373 while the Nifty fell 63 points to 11,010. Broader markets outperformed benchmarks with Nifty Midcap and Nifty Smallcap indices rising around half a percent each. Among sectors, Nifty Bank anf Nifty Fin Services were weak at opening, down around 1 percent each while Nifty Auto and Nifty Pharma added over 1 percent.
TVS Motor July sales dip 10% to 2.52 lakh units
TVS Motor Company on Saturday reported a 10 percent decline in total sales at 2,52,744 units in July 2020. The company had sold 2,79,465 units in the corresponding month last year, TVS Motor Company said in a statement. Total two-wheeler sales were at 2,43,788 units last month, as compared to 2,65,679 units in July 2019, down 8 percent, while domestic two-wheeler sales were at 1,89,647 units in the period under review, as against 2,08,489 units in the year-ago month, down 9 percent. Read more
FPIs net buyers for second month in July; invest Rs 3,301 crore
Foreign portfolio investors (FPI) remained net buyers for the second consecutive month in July by pumping in Rs 3,301 crore in Indian markets amid hopes of a coronavirus vaccine. According to the depositories data, a net sum of Rs 7,563 crore was invested in equities while Rs 4,262 crore was withdrawn by FPIs between July 1-31. The net investment during the month stood at Rs 3,301 crore. In the previous month, FPIs put in a net Rs 24,053 crore in Indian markets. Some factors that led to investment in July include a surge in markets which provided FPIs good profit booking opportunity, improvement in sentiment on the back of rising hopes of a coronavirus vaccine, said Himanshu Srivastava, associate director – manager research, Morningstar India.
Microsoft confirms talks seeking to buy US arm of TikTok
Microsoft confirmed Sunday it is in talks with Chinese company ByteDance to acquire the US arm of its popular video app TikTok and has discussed with President Donald Trump his concerns about security and censorship surrounding such an acquisition. In a statement, Microsoft said Microsoft and ByteDance have provided notice of their intent to explore a deal resulting in Microsoft owning and operating the TikTok service in the US, Canada, Australia and New Zealand. The company said it expects those talks to conclude by Sept. 15. More here
Global Update: Asia stocks off to cautious start, dollar nurses scars
Asian shares and the dollar made a cautious start to the new month on Monday as U.S. lawmakers struggled to hammer out a new stimulus plan and a global surge of new coronavirus cases showed no sign of abating. MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.2 percent, though that was from a six-month top. Japan’s Nikkei added 1.1 percent courtesy of a pullback in the yen, while South Korea shares eased 0.3 percent. E-Mini futures for the S&P 500 ESc1 dithered either side of flat.
First up, here is quick catchup of what happened in the markets on Friday
Indian indices ended the day in red on Friday dragged by heavyweights like Reliance Industries, HDFC Bank, Kotak Mahindra Bank and auto stocks. At close, the Sensex ended 129 points lower to 37,607 while the Nifty50 index ended at 11,073, down 29 points. Broader markets outperformed the benchmarks, Nifty Midcap100 and Nifty Smallcap100 indexes ended the day in green, up 0.43 percent and 0.83 percent higher respectively. Market breadth remained in favour of the laggards. 957 stocks on the NSE ended with losses while 829 stocks gained.
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