BSE revises Jio Fin price band to 20% from today

The BSE has revised the price band for Jio Financial Services to 20% from the earlier 5%, effective Monday. It was among 10 stocks for which the exchange announced a revision in price bands.Set by stock exchanges, price bands serve as limits for securities in order to curb extreme volatility in share prices.In addition, the stock will no longer be in the trade-to-trade (T2T) segment. The stock is expected to be removed from the NSE indices this week, subject to the condition that it doesn’t hit the upper or lower circuit in two consecutive sessions.Analysts say that with thanks to revision of the price band from 5% to 20%, chances of Jio hitting upper/lower circuits are slim.

According to Nuvama Institutional Equities, Jio could exit the NSE indices on Wednesday if it doesn’t hit the circuit limit on Monday and Tuesday. Nuvama’s calculation suggests JFS’ exit could lead to the sale of 105 million shares by Nifty50 passive trackers.

Digikore Studios plans listing, submits DRHP for IPO with NSE Emerge

Digikore Studios, a visual effects (VFX) studio, has filed preliminary papers with the NSE Emerge to enter the primary markets with the initial public offering (IPO) of 17,82,400 equity shares. According to the draft, the company proposes to utilise the fresh proceeds towards funding working capital requirements, general corporate purposes, and offer expenses.

The IPO comprises a fresh issue of 12,60,800 equity shares and an Offer for Sale (OFS) of 5,21,600 equity shares, by promoters and investor shareholders, according to the draft red herring prospectus (DRHP). The face value of the Equity Shares is ₹10.00 each.

In Q1FY24, the company’s revenue from operations was Rs 1,182.68 lakh, with an EBITDA of Rs 440.48 lakh. The Profit After Tax (PAT) for June 20, 2023, stood at Rs 279.65 lakh.

Digikore Studios is a Visual Effects Studio with a portfolio of over 200 Hollywood films and TV series. Some notable works include Thor: Love and Thunder, Black Panther: Wakanda Forever, Deadpool, Star Trek, Jumanji, Stranger Things, and Game of Thrones. Digikore Studios is one of the few studios in India that have cleared the audits and earned approval from entities like TPN, Disney/Marvel, Netflix, Amazon, Apple, Paramount, Warner Bros and Lionsgate.

MCX crude near its resistance zone; OPEC lifts its crude oil demand forecast for 2023 to 2.4 million bpd

By Bhavik Patel

Oil bulls are back with a bang as the market sentiment has shifted to positive note with inflation in the U.S. slowing dramatically and markets tightening on the back of supply disruptions and production cuts. Until now, the market was only looking at the consumption side but now concerns are emerging regarding the supply side. Oil production has been stopped at Libya’s 70,000 b/d El Feel oilfield on Thursday after tribal protests over the kidnapping of a former finance minister grew into larger unrest that could soon impact the adjacent El Sharara field.

Demand side is also expected to be stable as according to OPEC reports, OPEC has lifted its crude oil demand forecast for 2023, to 2.4 million barrels per day (bpd), according to the group’s latest Monthly Oil Market Report (MOMR) released on Thursday. OPEC’s expectation for this year’s oil demand is an upward revision of 100,000 bpd from last month’s forecast. We had also previously reiterated that there is disparity between prices and fundamentals where the market is clearly looking on the consumption side anticipating that demand will weaken due to recession fears but demand till date is strong from Asia. Now OPEC has also acknowledged that we may see a soft landing in the US and no chance of recession in 2023. Both supply constraint and steady demand had led to recovery in oil prices.

In MCX, crude is now near its resistance zone. We have seen since July 2022 that crude prices have failed to clear the 200-day moving average. It has faced resistance multiple times and been corrected. Now once again it is near its 200-day moving average on a daily scale and so we expect correction from the current juncture. Correction is also due as we have seen non-stop rally in crude for the past 7 trading sessions so both price-action wise and hurdle of the 200-day moving average suggest pullback from prices. 6050 is the support zone where one can initiate a long position with expected price of 6300 and stoploss of 5900. Anyone who has taken a long position can book profit and wait for corrections to take a fresh long position.

(Bhavik Patel- Commodity and currency analyst at Tradebull Securities. Views expressed are the author’s own. Please consult your financial advisor before investing.)

India braces for Cyclone Biparjoy! Indian Army, NDRF prepare for landfall – See photos

The India Meteorological Department ( IMD) says that Cyclone Biparjoy is expected to make a landfall on Gujarat’s Saurashtra and Kutch regions and adjoining Pakistan coasts on June 15 between 4 PM to 8 PM. In the view of the very severe cyclonic storm, the weather department has sounded a Red Alert as for the Saurashtra and Kutch coasts. Bracing for the cyclone, several NDRF and SDRF teams have been deployed, while residents of coastal areas were being shifted to shelters in parts of Gujarat. Meanwhile, PM Narendra Modi, Union Home Minister Amit Shah and Union Health Minister Mansukh Mandaviya reviewed preparedness for cyclonic storm Biparjoy. Here we bring to you a glimpse of these coastal areas where NDRF, SDRF and the Indian Army preparing to provide succour to the locals post the landfall of the fierce cyclone Biparjoy. 

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Indian Army troops reach the coastal line of Gujarat as it prepares for landfall of cyclone Biparjoy in the state. (Photo Credits: Indian Army)

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The flood relief columns have been rehearsed and kept ready at Bhuj, Jamnagar, Gandhidham, Dharangdhra, Vadodara and Gandhinagar as well as at forward locations at Naliya, Dwarka and Amreli. The resources have also been made available from neighbouring Rajasthan as well to ensure minimisation of any loss due to the gusty winds and heavy rainfall. (Photo Credits: Indian Army)

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The Indian Army prepared itself to provide succour to the locals post the landfall of the fierce cyclone Biparjoy in Gujarat. The Army authorities have also jointly planned the relief operations with civil administration as well as NDRF. (Photo Credits: Indian Army)

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High waves crash against shops near the shore ahead of the landfall of Cyclone Biparjoy, in Mumbai. According to the meteorologists, the wind speed can go upto 125-135 km (78-84 miles) per hour. (Photo Credits: PTI)

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People evacuated from Kandla port, in preparation of Cyclone Biparjoy, rest at a shelter in Gandhidham, India. Authorities on Monday halted fishing activities, deployed rescue personnel and announced evacuation plans for those at risk. (Photo Credits: AP)

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Satellite image taken between 08:30 pm to 08:56 pm IST shows the location of Cyclone Biparjoy in the Arabian Sea on Tuesday. (Photo Credits: PTI)

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In a dramatic rescue operation, the Indian Coast Guard has succeeded in evacuating 50 personnel from an oil rig located 40 km off the coast of Gujarat as the nation prepares for the impact of cyclonic storm. (Photo Credits: PTI)

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The government has shifted around 4,500 people from coastal areas to various shelter homes ahead of cyclone Biparjoy, which is expected to cause extensive damage when it makes landfall near Jakhau port in Kutch district on Thursday. (Photo Credits: PTI)

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Union Minister Mansukh Mandaviya visits Bhuj Military Station to assess army’s readiness for cyclone Biparjoy, in Bhuj on Tuesday to review preparedness for cyclonic storm Biparjoy. (Photo Credits: PTI)

Punit Goenka moves SAT against SEBI’s confirmatory order

Punit Goenka, one of the promoters of Zee Entertainment Enterprises, on Friday appealed before the Securities and Appellate Tribunal (SAT) for relief against the August 14 confirmatory order by the Securities and Exchange Board of India (Sebi) barring him from taking key managerial positions in Zee group companies as well as the merged entity with Culver Max Entertainment (formerly Sony Pictures Networks India).

SAT will hear the matter next week. Zee declined comment when contacted.

Sebi Chairperson Madhabi Puri Buch in the order said that both Chandra and Goenka should be barred from holding directorships or key managerial positions in Zee Entertainment, Zee Media Corporation, Zee Studios, Zee Akaash News and any other company formed by a merger or demerger of these entities.

Legal experts say that Goenka may argue that he can’t be kept out of office till Sebi‘s probe is completed. Last month, Zee Entertainment had said that it was forming an interim committee to run operations at the firm after Goenka and Chandra had failed to overturn the ban on them by the market regulator at SAT.

The tribunal had instead directed Sebi to provide an opportunity of hearing to Chandra and Goenka and then issue the final or confirmatory order. Following the directive, it had provided hearing to the duo and issued the confirmatory order within the stipulated time.

The market regulator in its earlier order in June 12 interim order and Aug 14 confirmatory order has alleged that Chandra and Goenka had done sham transactions to divert funds to associate entities. The diversion was to the tune of Rs 200 crore.

Rupee weakens against US Dollar; support seen at 82.50-82.35, resistance at 82.88-83.05

In the early trading session on Tuesday, the rupee experienced a 0.02% depreciation, falling to 82.62 against the US dollar. The decline was influenced by the weakness of the US dollar against other major global currencies. The dollar index, which measures the strength of the US dollar against six different currencies was also trading lower by 0.20% at 103.85.

“The USD-INR August 29 futures contract traded in a tight range. As per the daily technical chart, the pair is trading below its moving average trend-line support level of 82.88 and MACD is showing negative divergence. Looking at the technical set-up, RSI is fetching below 50 levels and the pair is sustaining below 82.88 levels. As per the daily technical chart the pair is having support at 82.50 – 82.35, while resistance is placed at 82.88 – 83.05,” said Rahul Kalantri, VP Commodities, Mehta Equities.

Meanwhile, the benchmark domestic indices were trading in the green in intraday trade on Tuesday. The NSE Nifty 50 was trading at 19,334.55, up by 0.15%, while the BSE Sensex was trading at 65,058.31, up by 0.09%.

“August has been weak for global equity markets. In the mother market of the US, the S&P 500 is down by 4% so far in August. This weakness has impacted all other markets including the Indian market where Nifty is down by around 2% so far in August. The global economic scenario and the growth, inflation and interest rate trends in the US will continue to determine stock market trends globally. The Fed chief Powell’s candid remark at Jackson Hole that ‘we are navigating by the stars under cloudy skies’ is an indicator of the uncertainty surrounding the global economy and markets. However, the Powell commentary was neutral without any market-moving hawkish or dovish tones. The high US bond yields and the dollar index above 104 are near-term negatives for capital flows to emerging markets like India,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial.

Rupee erases yearly gains; rise in dollar demand from oil imports, bargain buying weighs on Indian currency

By Dilip Parmar

The Indian rupee erases yearly gain in the week gone following the dollar demands from the oil importers and bargain buying. The fall in Asian currencies, risk-averse sentiments, absence of central bank’s intervention and gain in crude oil prices weighed on the local units.

Spot USDINR gained 0.86% or 70 paise to 82.74, marking the biggest weekly gains since December 9. We believe the central bank may intervene in the coming week as the pair reaches a psychological level of 83. Technically, the support has been shifted to 82.25 from 81.70 and resistance between 83 to 83.30. 

A gauge of the dollar declined after data showed US job gains moderating in June, spurring some concern about the labour market under the Federal Reserve’s monetary tightening. The dollar index registered the first weekly decline in three to settle at 102.27. Among the major trading currencies, the pound and yen surged the most among the G10 currencies while the euro gained half a per cent in the week gone.

Two-year yields last hit the level of 5.11% before closing at 4.94% the levels of 2007, indicating a hawkish Federal Reserve. With DM central banks still furiously tightening, the question is how long the bond remains weak. In the recent CFTC data, the speculators trimmed their dollar short position in the week gone and now the net dollar short position remained at $ 11.5 billion.

In the coming months, the effect of the Fed’s current Quantitative Tightening program is likely to be seen. While the RRP account stands at more than $1.8 trillion and the overall Fed balance sheet has only shrunk by a fraction of the amount. US Federal Reserve Bank credit fell by $48 billion from a week ago, leaving the Fed’s portfolio of interest-bearing assets at $8.269 trillion. In one of the events, Yellen said it’s too soon to rule out the threat of a US recession, but data suggest “that there is a path to bring inflation down in the context of a healthy labour market.

What to Watch:

The week will bring a heavy load of data releases, kicking off with China’s inflation report on Monday, and India and the US CPI on wednesday. In India, we see inflation picking up again, likely giving the central bank reason to keep its guard up. Inflation in the US likely continued to soften in June but a key measure of underlying price pressures is still running at an uncomfortable pace that keeps the Federal Reserve tilted toward resuming interest-rate hikes this month.

(Dilip Parmar, Research Analyst, HDFC Securities. Views expressed are the author’s own. Please consult your financial advisor before investing)

Wall Street Week Ahead-Historically stormy month of September may test US stock rally

U.S. stock investors are bracing for a potentially volatile September as the market faces key economic data reports, a Federal Reserve meeting and worries over a possible government shutdown during a month of historically muted equity performance.In Septembers since 1945, the S&P 500 has declined an average of 0.7%, the worst performance of any month, according to CFRA.Recent weeks have been volatile. The S&P 500, which is up nearly 15% this year, has retreated more than 4% from its July 31 high as investors reacted to weakness in China’s economy and a surge in Treasury yields that threatens to make equities less attractive.

The market is “coming up on a number of key inflection points at a time when the market is still on edge given the rise in rates,” said Jack Janasiewicz, portfolio manager and lead portfolio strategist at Natixis Investment Manager Solutions.The U.S. non-farm payrolls report kicks off the month next Friday. A hotter than expected employment reading for August would likely revive inflation concerns, while a much weaker number could fuel worries that the Fed’s interest rate hikes are starting to crack the economy, Janasiewicz said.

Investors will also watch what happens with roughly $82 billion worth of student loans held by the government whose payments will begin in October. This could sap consumer spending ahead of the holiday shopping season.Meanwhile, a feud over spending cuts between hardline and centrist Republicans in the U.S. House of Representatives raises the risk that of a fourth federal government shutdown in a decade if lawmakers cannot reach a deal by Sep. 30, when funding runs out with the end of the current fiscal year.A government shutdown stands to directly reduce U.S. economic growth by around 0.15 percentage points for each week it lasts, analysts at Goldman Sachs wrote this week.

Of course, bullish stock investors have largely been rewarded for looking past potential pitfalls this year. The S&P 500 rallied despite the regional bank crisis in Feb., concerns over a debt default in June, and fear that the Federal Reserve’s most aggressive pace of interest rates hikes since the early 1980s will push the economy into a recession and derail corporate earnings growth.Some investors believe further gains could come from a resilient economy and continued excitement over the business potential of artificial intelligence, fanned this week by chip maker Nvidia’s strong earnings report and $25 billion stock buyback announcement.

Tim Hayes, chief global investment strategist at Ned Davis Research, expects a relief rally in September. The August decline looks similar to the 6% fall between Feb and March of this year which relieved “excessive optimism” and set the market on course for more gains, he said.”The correction started on the first day of the month, and now it has corrected the conditions that made it vulnerable,” Hayes said.

Torrent Pharma shares sink 4% as reports suggest co is likely to acquire controlling stake in Cipla

Torrent Pharma share price sank almost 4% in trade on Friday, falling for the third consecutive session, as reports suggested that the sixth large pharmaceutical player in India was likely to acquire the Hamied family’s stake in Cipla. Shares of the company touched an intraday low of Rs 1,772.05 apiece. The share price of Cipla sank around 1% to hit a low of Rs 1,244.70.

According to the ET NOW report, Torrent Pharma’s promoters are considering placing a bid for Cipla along with a consortium of private equity firms. Additionally, the reports suggested that Torrent Pharma has secured funding from international entities for this purpose. If the Cipla stake acquisition goes through, it might lead to an open offer with a potential transaction value between $6.5-7 billion.

In July, reports emerged that Cipla’s promoters were exploring a stake sale with PE firms such as Blackstone and BPEA EQT. YK Hamied, Chairman and MK Hamied, Vice Chairman are over 80 years old and lack a clear succession plan.

After the BSE sought clarification on the news report, Torrent Pharma refused to comment on the claims. In a filing with the exchanges, Torrent Pharma said, “The Company has noted that the news item refers to a potential sale of shares by its promoters pertaining to their involvement in the acquisition of Cipla’s shares. As a policy, the Company does not comment on speculative reports in the absence of verified data.”

What next for Nifty after making new all-time high above 19,400?

By Manish Jain

Markets have been on a surge and quite unexpectedly so. Nifty is now at a new high, having crossed 19,400 and is up ~7% YTDCY23 and 22% in the last 12 months. As retail investors there are only two questions that come to mind – a) why is the bull rally happening, and b) what next from here?

India stands tall: Last year was a tough one with a massive slowdown happening globally. USA, EU, UK and China, all went through their fair share of troubles. At one point in time, it looked as if we would also get impacted by the global meltdown. True to expectations, the currency crisis, tightening, the balance of payment etc. all stared us in the face. However, at 7.2% our GDP growth was exactly where it was expected to be. We stood very tall amidst the whole mayhem.

FII flows:One key catalyst that has turned around the market fortunes is the FII flows. They were selling aggressively last year and moving money from India to other emerging markets. However, the tide seems to have turned now. The net inflow has been strong and should continue in the coming months.

Rural growth: At the start of the CY23, it seemed like rural growth would continue to remain iffy as monsoons were expected to be below normal and WPI inflation remained alleviated. However, all of that seems to be a distant memory and rural demand is already early showing signs of a strong revival.

Broad basing of earnings growth: Last financial year Nifty reported strong earnings growth but a large part of it was driven just by banks while other sectors continued to suffer. However, now this trend is expected to reverse. Banks, Auto, consumer, are all expected to participate in the mid-teens market earnings growth.

So, now having established that the market outlook remains strong, what should the investors be doing? The way we, at Ambit, are looking at the markets, we feel that this is a strong sustainable bull market that’s staring at us. Valuations are not expensive, earnings are strong, and the government is stable. There seems to be no red flag on the horizon. The visibility is fairly strong for the next 18-24 months. So our advice? It would be to buy and hold. Invest now, the right time was yesterday. However, here are two pieces of advice before we part ways – a) don’t get swayed by noise and hold on tight to equities, and b) always buy quality businesses.

(Manish Jain is a Fund Manager, Coffee Can PMS at Ambit Asset Management. Views expressed are the author’s own. Please consult your financial advisor before investing.)