Indian shares continued to slide on Friday as high-weightage IT and PSU Bank stocks offset optimism due to improved sentiment from the increased probability of a rate pause from the US Federal Reserve.

The blue-chip Nifty 50 went down by 70 points to close the week at 18,563, while the benchmark S&P BSE Sensex fell 223 points to end at 62,625. Thirteen of the 15 Nifty sectoral indices ended in the red.

IT, FMCG and PSU Bank dragged markets the most with each shedding around a per cent. Private bank index remained in the green throughout the session with reasonable gains. The only other index to end in green was the Realty sector.

Among stocks, IndusInd Bank jumped more than 2% followed by Axis Bank, Power Grid and L&T. Hero MotoCorp, HDFC Life, HUL, SBI, and Tata Steel were the biggest laggards in today’s session.

Global equities were set for a small weekly gain on Friday following a Wall Street rally overnight, as rising bets the Federal Reserve will skip a rate increase next week overshadowed worries about U.S. markets being drained of cash.

Japan’s Nikkei share average rose sharply and marked its ninth straight weekly rally, as fixing of the special quotation price relieved investors.

The Nikkei index jumped 1.97%. The index rose 2.35% for the week, erasing a nearly 4% loss in the past two days from a 33-year high scaled on Wednesday. The broader Topix advanced 1.50% and rose 1.9% for the week.

China stocks ended higher buoyed by optimism over policy support for automobile and technology sectors, even as disappointing inflation data weighed on investor sentiment. Hong Kong shares followed Asian markets higher.

The blue-chip CSI300 Index and the Shanghai Composite Index rose 0.4% and 0.6%, respectively. Hong Kong’s Hang Seng Index gained 0.5%, as Asia-Pacific equities rose to their highest level since mid-February following an overnight Wall Street rally.

European shares were flat at the end of a lacklustre week, which saw investors step to the sidelines ahead of updates from major central banks, while Croda traded at the bottom of the benchmark index following a tepid profit outlook.

UK’s FTSE 100 inched up boosted by AztraZeneca gains after the drugmaker got U.S. regulator’s nod for an experimental antibody, while payments provider Network International surged on reaching an agreement to be taken private.

Brightcom Group, a stock held in the portfolio of prominent investor Shankar Sharma, has been experiencing a significant surge over the past one and a half months. Despite hitting its 52-week low of ₹9.27 on April 28, the stock has since witnessed a remarkable increase of over 144%. This substantial rise is surprising considering the recent regulatory actions taken against the company by the Securities and Exchange Board of India (Sebi) for non-compliance and violations.

Sebi’s investigation into Brightcom Group, headquartered in Hyderabad, revealed that the company had misrepresented its expenses and inflated its profits during the period from 2014-15 to 2019-20. However, the company later clarified with the stock exchanges that it would be implementing corrective measures to enhance its financial disclosures. (Read More)

Manish Mehta, National Head and Sales, Marketing & Digital Business, Kotak Mahindra Asset Management Company: Profit booking in rising market along with probable expenses towards vacation, education could have led to lower investments in mutual funds in May.

Walt Disney Co’s Hotstar will provide free streaming of cricket tournaments in India on mobile devices. The decision follows after rival JioCinema’s attracted millions of viewers with a similar strategy for IPL in the cricket-crazy nation.

Hotstar said today that it would be offering the much-awaited Asia Cup and ICC Men’s Cricket World Cup tournaments at no cost to users. (Reuters)

Gopal Kavalireddi, Vice President – Research at FYERS shares their analysis on AMFI data for the month of May: Net flows into mutual funds were down sharply by 52% on a month-on-month basis across debt and equity segments. Only the hybrid category saw net flows rise by 84% to Rs.6093 crore, mainly due to the change in tax regulations and higher-than-usual inflows into arbitrage funds. From the debt segment, inflows were weak across categories, with Corporate bonds and short-duration funds seeing better inflows. Investors continued to repose faith in small-cap funds from the equity segment with a 50% rise in net flows to Rs.3282 crore. The valuation difference in comparison to large-cap stocks continues to play out well for investors opting for mid and small-cap funds since the beginning of the calendar year. Inflows into index funds dwindled to a mere Rs.108 crore, compared to the Rs.27,000+ crore inflows seen in March 2023.

SIP inflows are back above the Rs.14,000 crore mark after a brief dip to Rs.13,728 crore in April, with investors continuing their disciplined investing that started more than two years ago. Assets Under Management (AUM) by the end of May stood at Rs. 43.2 lakh crore, a rise of 9.6 per cent YTD and 8.3 per cent since the beginning of the calendar year. Buoyed by FII inflows of Rs.27,856 crore in May and continued inflows from retail investors, the Nifty mid-cap and small-cap indices rose by 5.5 per cent on average, outperforming the Nifty 50 index (2.6 per cent) by a decent margin.

On a year-to-date basis, the Nifty mid-cap index (8.8 per cent) and Nifty small-cap index (7.63 per cent) have provided better than expected returns to investors. With RBI projecting GDP growth of 6.5 per cent and inflation trending down from its peak levels, the prospects are bright for the Indian economy. Investors should continue with their equity investments through systematic investment plans which offer the advantage of rupee cost averaging and countering the market volatility.

Dayanand Mittal from JM Financials recomends BUY For Reliance Industries – INR 2,900 

Following our Mar’23 note, reiterating our BUY call on RIL as the share price then was very close to our worst-case value, the key debates with investors have been on potential triggers that could actually drive a decisive rerating in the stock. The key arguments against a re-rating were that there are limited earnings-upgrade triggers for now, low visibility on event-based triggers in the near term (viz., listing of Digital and Retail businesses or strategic stake sale in Clean Energy or O2C businesses), and concerns over high capex and resultant rising net debt. The concerns on debt are overdone, in our view. We expect RIL’s net debt to peak in FY24 and then decline gradually as capex will not only moderate (INR 1.2trln-1.4trln p.a. vs. INR 2.3trln in FY23) but, importantly, also be fully funded by a gradual increase in internal cash generation. RIL’s guidance on keeping reported net debt to EBITDA below 1x (0.8x in Mar’23) also gives comfort. Be that as it may, we believe RIL could still drive a robust 14-15% EPS CAGR over the next 3-5 years with Jio’s ARPU expected to rise at 10% CAGR over FY23-28, and continued strong momentum in Retail including scale-up of new initiatives (FMCG foray, inorganic growth, etc.).

Osho Krishan, Sr. Analyst – Technical & Derivative Research, Angel One Ltd. comments on why FMCG and IT sectors are under pressure in today’s session:

FMCG Index: The FMCG space is in a secular uptrend and is hovering well above all its EMAs on the daily time frame. The undertone remains buoyant in the space with stock-specific movement to be gauged for better trading opportunities. As an index, the initial support lies around the bullish gap of the 50420-50500 zone, while sacrosanct support is placed around the 50000-49800 zone.

IT Index: NIFTY IT has retracted in the current week towards the breakout of the consolidation zone it witnessed during the May-month end. From a technical point of view, the index has been hovering near the cluster of its EMAs on the daily time frame, having support near the 28000 zone. On the flip side, the immediate resistance is placed near the bullish gap of the 29000 zone, which even coincides with the 200 SMA on the daily chart. A decisive breach on either side is likely to direct the near-term trend in the index.

Aether Industries, a manufacturer specializing in specialty and fine chemicals, announced on Friday that it has entered into a license agreement with Saudi Aramco Technologies Company. This agreement aims to facilitate the commercialization of the innovative converge polyols technology, which focuses on sustainability.

Aman Desai, the promoter and director of Aether Industries, expressed satisfaction with being selected as the partner for commercializing the converge polyols technology. He highlighted the collaborative efforts undertaken over several years to develop the manufacturing technology for the converge platform.

The converge platform represents an advanced technology capable of producing polyols that are more sustainable, incorporating up to 40% carbon dioxide by weight. This offers a potential for reducing environmental impact in the production of polyols.

FMCG and IT indices are among the biggest laggards in today’s session. Deepak Jasani, Head of Retail Research, HDFC Securities comments on these sectors:

FMCG Index: FMCG index has come under pressure today as more and more agencies (latest being NOAA, US) are now predicting higher chances of arrival of El Nino pattern that can bring warmer temperatures, impact monsoon and food crops, which in turn can affect rural demand. BSE FMCG index which has outperformed so far led mainly by ITC, can correct to 17700 levels (CMP ~18300).

IT Index: IT index has again come under pressure due to the impact of soft EPAM guidance given a few day ago and chances of US Fed raising rates in July (if not in June) which can impact valuation of tech companies. BSE IT index has support from 27600 (CMP 28500)

Barring the affordable housing segment, the mid and premium residential markets have shown resilience in the face of rising interest rates. Consequently, listed realty companies ended FY23 with bumper pre-sales. With demand momentum expected to sustain, companies are looking at a spree of new launches in FY24.

However, the ability of these companies to boost pre-sales will hinge on a key metric – the churn rate. (Read More)

Following the approval, PTC Industries successfully made its debut on the National Stock Exchange (NSE) on Friday. The company’s shares opened at ₹3,090 per share on the NSE and reached an intraday high of ₹3,149.95, with a low of ₹3,001 also recorded on the NSE.

On the Bombay Stock Exchange (BSE), PTC Industries’ shares were trading 1.13% higher at ₹3,049.85 per share. Over the course of one week, the stock has experienced a rally of over 23%, while its value has surged by more than 90% in the span of a year. Notably, PTC Industries’ share price has witnessed surge of over 2,280% in just three years.

The company made a regulatory filing on June 7, stating that it had applied for the listing of its equity shares on the NSE, and subsequently received the necessary approval for listing and trading from the exchange.

Sameet Chavan, Head Research, Technical and Derivatives, Angel One Ltd: IEX is an Indian electronic system-based power trading exchange regulated by the Central Electricity Regulatory Commission (CERC). The stock has been a laggard since the last 15-odd months. Stock prices tumbled in the last couple of sessions after the reports said that the power ministry has directed the CERC to undertake the ‘Market Coupling’ mechanism for spot power trading. Technically speaking, we do not see any near-term relief in the prices as the decline is backed by humongous volumes. The stock is trading at new 2-year low and hence, we advise traders to stay away from the stock till the time things do not stabilise.

Tokyo shares inched up on Friday tracking the Wall Street rally on Thursday as optimism around the US economy and growing optimism that the Fed will not hike interest rates next week.

The benchmark Nikkei 225 index added 1.97% to end at 32,265.17, while the broader Topix index rose 1.50%  to 2,224.32.

Y. Viswanatha Gowd, MD & CEO of LIC Housing Finance: Keeping the interest rates steady at 6.5% is in line with the expectations. We expect the same state to continue for a few more quarters. Looking to the lead indicators, it gives optimism and shows demand revival. Monsoon prediction is yet another favorable point. For home buyers, stable interest rate is an encouraging trend.

The early morning trading saw an upward movement in the gold rate today, fueled by market speculation of a pause in the US Federal Reserve’s interest rates. On the MCX, the opening price of gold today stood at ₹59,934 per 10 grams and subsequently reached an intraday high of ₹59,943 per 10 grams. Meanwhile, in the international market, the current gold rate is fluctuating around $1,963 per ounce.

Similarly, the silver rate today commenced with a higher opening on the MCX at ₹73,860 per kilogram. In the global market, the price of the white metal is hovering around $24.20 per ounce, which is nearly in line with its Thursday closing price.

Paytm share price rallied over 4% on Friday, extending its rally for the third consecutive session amid upbeat sentiment. The stock price of One 97 Communications, the parent company of Paytm, rose as much as 4.8% to an intraday high of ₹809.45 apiece on the BSE. The stock witnessed more than 6% gains in the previous session.

The rally in Paytm shares comes after the company got a ratings upgrade from Bank of America Securities as it finds risk-reward turning more positive for the stock.

BofA Securities upgraded Paytm to ‘Buy’ from ‘Neutral’ and increased the target price to ₹885 per share from ₹780 earlier on the back of strong revenue momentum and operational leverage. (Read More)

The Indian rupee opened 8 paise higher against US dollar on Friday tracking losses in the American currency after a rise in US jobless claims increased hopes that the Federal Reserve will hold interest rates next week. The local unit opened at 82.48 a dollar, 8 paise higher than its previous close of 82.56.

The dollar index stood at 103.35 in early Asia trade, having lost more than 0.7% in the previous session, its largest daily decline in weeks.

The odds of a Fed rate hike at the June 13-14 meeting is now at 1-in-4, Reuters reported. (Read More)

Kotak Mahindra Bank shares traded choppy on Friday following news that the government-run Canada Pension Fund would probably sell a portion of its stake in the private lender bank through block deals today. Kotak Mahindra shares opened at ₹1863.55 apiece on BSE.

The Canadian Pension Fund will sell a 1.66% stake in Kotak Mahindra Bank, sources told CNBC TV-18, according to media reports. As of March 30, the Canada Pension Fund owned 4.34% of Kotak Mahindra Bank. As per reports, the 1.66% share held by the fund is worth $754 million.

People familiar with the transaction further stated that the fund is selling the shares at a price range of ₹1,792- ₹1,886 per share, which equates to up to a 5% discount from the current market price (CMP), according to media reports. (Read More)

Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services: The expected pause decision of the MPC yesterday came laced with an unexpected slightly hawkish message on inflation and the market reacted negatively to it. However, it is important to appreciate the fact that the MPC is playing it safe by trying to anchor inflation expectations. The most important factor determining the trajectory of inflation, going forward, will be the monsoon. If the monsoon is normal food inflation will remain under control, facilitating a rate cut by December 2023. Therefore, the progress of the monsoon should be keenly watched.

Latest news from the mother market US is that initial jobless claims have increased. This is slightly positive from the market perspective since it indicates that the US economy is slowing down in response to the Fed’s tight monetary policy. So, it is possible that the Fed might pause in the coming June policy meeting, boosting market sentiments. The Nifty range has moved up to 18500-18700 now.

Hiring activity in the month of May declined by 7% as compared to the same period last year, according to Foundit Insights Tracker, Business Standard reported.

The report shows positive hiring trends in tier-2 cities like Ahmedabad and Jaipur despite a decline in general trend.

In its latest report, talent platform Foundit, formerly known as Monster APAC & ME, indicated that hiring activity across industries declined 4% month-on-month (MoM) decline due to the economic slowdown, which led the companies to cut expenses, including hiring efforts. (Read More)

Tata Power Renewable Energy Limited through its subsidiary TP Vardhaman Surya Limited, has been granted the Letter of Award (LOA) to develop a 966MW Round-the-clock (RTC) hybrid renewable power project for Tata Steel, the company said in a statement on Thursday.

This project, combining solar and wind power, stands as one of the largest industrial RTC power purchase agreements (PPAs) under the Group Captive segment in India.

The project will comprise a solar capacity of 379MW and a wind capacity of 587MW. Tata Steel, a prominent global steel producer with an annual crude steel capacity of 35 million tonnes, seeks to meet a significant portion of its green energy requirements through this initiative. (Read More)

HDFC Bank Ltd. has shortlisted veteran Arvind Kapil, its current retail assets head, to spearhead the home loans business post its mega-merger with India’s biggest mortgage financier Housing Development Finance Corp.

Kapil, who has worked at India’s most valuable bank for almost a quarter of a century, recently met executives at the mortgage lender to discuss plans for the loan book post-merger, according to people familiar with the matter. If he gets the role, Kapil will lead a mammoth mortgage business, that currently includes gross individual loans of ₹5 trillion ($61 billion) at HDFC and over ₹1 trillion at HDFC Bank, according to the firms’ latest financial statements. (Read More)

Binance.US on Thursday suspended USD deposits while notifying customers that their banking partners are preparing to pause fiat (USD) withdrawal channels as early as June 13. This came after the US financial regulators supported a freeze on the cryptocurrency exchange’s assets earlier in the day, according to a report published by Reuters.

In a tweet of an email to customers, the crypto exchange company said, “Our ability to accept USD fiat deposits and process USD fiat withdrawals will be impacted. We maintain 1:1 reserves for all customer assets.”

The U.S. Securities and Exchange Commission (SEC), in a lawsuit on Monday, accused Binance and its founder Changpeng ‘CZ’ Zhao of mishandling customer funds, misleading investors and regulators, and breaking securities rules, as per Bloomberg reports. (Read More)

Market observers said that IKIO Lighting IPO grey market premium (GMP) today is ₹113, which is ₹7 lower from the IKIO Lighting IPO GMP of ₹120 on Thursday. Market observers maintained that the dip in grey market mood towards the IKIO Lighting IPO can be attributed to the negative close on Thursday after weak global sentiments. However, they went on to add that secondary market is witnessing profit booking after rallying for four straight sessions. So, grey market sentiment is expected to remain bullish as market sentiment is still sideways to positive. They said that strong response by investors across all categories would continue to provide support to the conviction of unlisted market participants. (Read More)

Canada’s CPP Investments to sell 1.66% stake in Kotak Mahindra Bank for INR 5,914-6,225 crore; HDFC Bank shortlists Arvind Kapil for home loans business post-merger with HDFC; Tata Power to develop 966 MW RTC hybrid renewable power project for Tata Steel; Delhivery accuses Go Air of accepting payments while aware of impending voluntary insolvency; IIFL Finance to raise up to INR 1,500 crore through public issue of secured redeemable NCDs; Punjab National Bank proposes to raise funds from sale of up to 15 crore shares under ESPS; Torrent Power raises INR 600 crore through NCDs on private placement basis; L&T Finance Holdings declares final dividend for FY 2022-23; CCL Products (India) acquires six coffee brands from Lofbergs Group; Zydus Lifesciences receives FDA approval to market generic drug for stomach and oesophagus problems. (Read More)

The National Company Law Tribunal (NCLT) on Thursday (June 8) accepted logistic courier service provider Delhivery’s notice to declare Go First’s voluntary insolvency resolution as fraudulent and malicious, media reports suggested.

As per an Economic Times report (ET), NCLT accepted Delhivery’s notice seeking Go First’s voluntary insolvency resolution as fraudulent and malicious. NCLT gave the interim resolution professional (IRP) of Go First two weeks to reply.

The report further quoted Delhivery’s counsel stating that the Wadia-group airline had received ₹57 lakh on May 2 as payment in advance for future services, despite being aware that they were planning to file for insolvency. (Read More)

Colin Shah, MD, Kama Jewelry: The RBI’s decision to hold rates is a prudent one. It will provide support to the gold prices. A higher interest rate scenario reduces the investment appeal of gold, and vice-versa lower interest rate regime leads to investment in the yellow metal. Going forward, we expect interest rates to remain stable for the remainder of CY23 and softening in CY24. Expect gold prices to scale newer peaks in the near future due to the current setup. Softening of bond yields also indicates a long pause by the RBI.

Benchmark Nifty 50 index is slowly striving to reclaim its all-time closing high of 18,813 seen in December 2022. On Thursday, the index closed just a percent away from that level. But valuations are getting steeper.

India’s equity valuations measured using the market capitalization to GDP (gross domestic product) ratio is above its long-term average. Also known as the Warren Buffett indicator the measure stood at 95% in FY23, showed an analysis by Motilal Oswal Financial Services Ltd. This is well ahead of its long-term average of 81%. This ratio is derived by using the total market cap of a country’s listed stocks as the numerator and GDP as the denominator. (Read More)

Canada’s CPP Investments will sell a 1.66% stake in Kotak Mahindra Bank on the stock exchanges for ₹5,914-6,225 crore on Friday, a person aware of the development said.

The Canadian pension fund will sell 33 million shares at the stock’s Thursday closing price of 1,886.5, or a discount of as much as 5%, the person cited above said on condition of anonymity, adding Kotak Securities will be the book-builder for the transaction.

After the deal, CPP Investments’ stake in the bank will fall to 2.68% from 4.34% at the end of March. The fund reduced its shareholding in the March quarter by a marginal 0.1% from the preceding quarter. (Read More)

Vaishali Parekh has recommended three intraday stocks for today. Here we list out full details in regard to those day trading stocks:

1] NTPC: Buy at ₹182, target ₹190, stop loss ₹179;

2] GPIL: Buy at ₹373, target ₹387, stop loss ₹369; and

3] Mahindra CIE: Buy at ₹512, target ₹532, stop loss ₹502. (Read More)

Foreign institutional investors’ (FIIs) buying slows on Thursday after RBI maintained a status quo for the second time in a row which was in-line with expectations. However, domestic institutional investors (DIIs) turned net sellers in Indian equities. Both Sensex and Nifty 50 ended in the red dragged by auto, banking, IT, and healthcare stocks.

As per NSE data, FIIs buying value was at ₹8,013.28 crore and selling value at ₹7,800.88 crore. Thereby, they held the title as net buyers with an inflow of ₹212.40 crore.

On the other hand, DIIs bought ₹5,461.85 crore and offloaded ₹5,866.86 crore worth of equities — resulting in an outflow of ₹405.01 crore. (Read More)

U.S. stocks closed higher on Thursday regaining some of their momentum thanks to a rebound by technology stocks, while volatility dropped to record lows ahead of an eventful economic and policy calendar next week.

The CBOE Volatility index, also known as Wall Street’s fear gauge, dropped to a fresh post-pandemic record low.

“What you are really seeing in the vol market is an unwillingness to engage,” said David Bianco, Americas chief investment officer for asset manager DWS Group. “You’ve just got paralysis in investors.”

Investors were sitting on the sidelines ahead of inflation data and a Federal Reserve policy meeting next week.

Traders have priced in a 73% chance of the U.S. central bank holding interest rates at the current 5%-5.25% range during its monetary policy meeting on June 13-14, according to CMEGroup’s Fedwatch tool. However, they see a 50% chance of a rate hike in July.

The Dow Jones Industrial Average rose 168.59 points, or 0.5%, to 33,833.61, the S&P 500 gained 26.41 points, or 0.62%, to 4,293.93 and the Nasdaq Composite added 133.63 points, or 1.02%, to 13,238.52. (Reuters)