SumanSpeaks: The Information Super Highway

  Winning Strokes The BSE Sensex today closed at 55,566.41 down 359.33 points (-0.64%), while the NSE's Nifty was seen closing at 16,584.55 down 76.85 points (-0.46%), after yesterday's whirlwind 🌪️ rally. Today's FPIs were net sellers of Rs.1036.56 Cr, while the DIIs lapped up shares worth Rs.1845.15 Cr. However, FIIs were net buyers of Rs.4469.15 Cr in the Futures Segment. The India Vix was at 20.48. In an encouraging development, the recent media reports suggest that India's economy grew by 4.10% in the January-March quarter of 2021-22, pushing the annual growth rate to 8.70% on account of better performance by manufacturing, mining and construction sectors. In the previous fiscal 2020-21, the economy had contracted by 6.60% due to the disruption of business activities due to the Covid-19 pandemic. This should bring cheers 🥂 to the BULLS 🐂 tomorrow. #Today, I recommended ( on Twitter ) the stock of my old favourite, Coffee Day Enterprises Ltd (Rs.45) at Rs.45.10,...

Winning Strokes The Indian bourses staged a come back today after positive report flow from the US. The BSE Sensex was seen tradi g ar 54,036.35 up 287.09 points (+0.53%),.while the Nifty is was last seen at 16,100.50 up 74.70 points (+0.47). With bank interest down and real estate in doldrums, the money would continue to flow in the Indian Equities. Keep buying good stocks at reasonable valuations. Photo : Patel Engineering Ltd #Buy the share of Patel Engineering Ltd at Rs.23.40, T: 31/32, SL: Rs.17. The company came out with excellent set of numbers for the March, 2022 quarter. Construction company Patel Engineering Limited on Monday reported a Rs.33.58 crore consolidated net profit in the March quarter, boosted by higher income. The company had reported a loss of Rs 145.95 crore in the January-March quarter of 2020-21 fiscal. Its total income jumped to Rs.1,153.04 crore, from Rs.776.42 crore in the year ago quarter, the company said in a regulatory filing. The expenses during the sa...

Question - Answer Session Q. Should you buy the shares of Vodafone Idea Ltd (Rs.8.95)? Ans : There is no doubt that at the present it is more of a speculative counter than a fundamentally strong scrip. However there is a silver lining in the ☁️ cloud. Photo : The Economic Times . Recently, there are media reports that the government of India might be announcing a package for the company. According to a report published in Mint: "The Union government is set to become the biggest shareholder of Vodafone Idea Ltd as early as next week, an official aware of the development said, as it converts dues owed by the country’s third-largest telco into a shareholding of about 33%". In January, this year, Vodafone Idea Ltd (Rs.8.95) agreed to convert its dues of ₹16,133 crore into equity as part of the financial relief package offered by the government. After the equity conversion, the shareholding of Vodafone Group and Birla groups will drop to 50%, and a proportionate reduction will t...

  Question - Answer Session I have received numerous responses, from the Free Blog Readers, Facebook Groups and from my Twitter Followers as to why the shares of Canara Bank Ltd (Rs.191.90) and RBL Bank Ltd (Rs.111.70) falling inspite of having excellent fundamentals? My Take: There is no 2nd opinion that these two banks from the PSB and the Private Sector Banking space have superb fundamentals, with a steady growth trajectory. Both these banks are well managed with good CAR. However, the market might be feeling that the banks might not be able to hold on to the NIMs (Net Interest Margin) due to RBI's hike in Repo rates by 40 bps. The Paradox:  Though there could be a dip in credit offtake due to the inflation factor, however, too much speculative fear on this front is uncalled for, because, credit offtake is dependent on PLR and GDP growth and NOT on the Repo rate. If the banks continue with the old PLR, then what? The credit offtake continues at the earlier pace, right? 2n...

The NDA Government's recent moves on Export Duty Front and Steel Stocks The Union government's move to reduce import duty on some raw materials and put export duty of 15% on a range of finished steel products (accounted for almost 95% of India’s overall finished steel exports in FY21 and FY2) amid tepid demand during the seasonally weak monsoon quarter could lead to 10-15% correction in  domestic steel prices in the coming months, according to the ratings agency ICRA. But this is seasonal demand slackness is natural and normal. Photo : India Infoline. However, the point is whether the steel companies will be able to offset the expected loss of export gains with domestic leverages .  The market sources say that, the demand for steel would continue to rise in the domestic market, which would somehow balance the recently imposed Export Duty on finished steel products. In addition, lower cost of raw materials would be positive for steel companies,. especially in the iron ore spac...

  Winning Strokes The Indian bourses are getting sold off strangely due to American Flue.  The BSE Sensex was last trading at 52,692.68 down a whopping 1,460.19 points (-2.80%), while the Nifty was last seen trading at 15,781.60 down a massive 444 points. But I feel the fall is absolutely unnecessary. The SEBI should look into this issue and see if it is a case of market manipulation in collusion with the media. In another significant development in the US, a few companies have reported lower earnings because of inflation effect, and this spooked Dow Jones and Nasdaq. The companies said that they are witnessing a fall in consumer demand due to spike in inflation. Fine! However, what is important to note is that India has a domestic economy which is showing high growth. Moreover, if demand destruction is really seen in the US, this means demand - push - inflation is coming down, which is a good sign. This further means that, the US Fed will refrain from going for agressive rate...

  Winning Strokes Indian markets are selling off as if there is no tomorrow. The BSE Sensex is last seen trading at 53,075.53 down 942.82 points (-1.87%), while the Nifty was last seen at 15,845.75 down 298.95 points (-1.99%). The Nifty is looking highly oversold here and a bounce is expected soon.  Moreover, the share markets will continue to rise as long as people puts their fund into it.... There's a very little correlation with Sensex crash and monetary tightening, except some knee jerk reactions. #Meanwhile, the US is getting stronger, with each passing day. Today, $1 = Rs.77.46. This is gives us the ammunition to cheer for those companies like Wockhardt Ltd (Rs.231.80), who gets a substantial part of their revenues from export. Wockhardt Ltd will get benefited , apart from Covid - 19 triggered Diabetes and Vaccine Therapy. Buy the shares of the company in all dips. Wockhardt Ltd has a good Diabetes Drug basket. #The banking sector looks good for stronger players, accord...

Winning Strokes Yesterday's market sell off was brutal especially among the small and mid cap space. It seemed this happened due to triggering of the margin calls. Anyway, the things are expected to get calm within a short time as the US inflation data suggests that probably the worst is over. Photo : Motilal Oswal Securities Ltd The US Labour Department report showed that the CPI rose 0.3% (against expected 0.2%) from the prior month and 8.3% from a year ago, easing from March's 8.5% inflation rate. The core CPI, which strips out volatile food and energy categories, rose 0.6% from March. The annual core inflation rate fell to 6.2% from the prior month's 6.5% reading, which was the highest since August 1982.  Right now, the market is indicating that inflation is expected to average 2.86% a year for the next 10 years, according to data from the St. Louis Fed on the so-called 10-year Treasury note break-even rate. That might sound low, given that the consumer price index rose...

Winning Strokes The barometer index S&P BSE Sensex dropped 364.91 points or 0.67% to settle at 54,470.67 while the Nifty closed at 16,301.85 down 109.40 points or 0.67%. NIFTY Midcap was down 1.78%, while the NIFTY Smallcap was down 2.12%. The good point is that Nifty recovered as the session progressed and hit the day's high of 16,403.70 in mid-afternoon trade. This gives some hope to the Bulls that for the time being selling is probably over in Indian bourses. Meanwhile, as the report is being prepared, Dow Jones industrial average was trading at 32,378.37, down 521.00 points (1.58%). The US markets are reacting too much after that 75 bps rate increase even though the Fed Chair has said that there is less possibility of another 75 bps rate hike in the near future. I feel the Nifty is likely to rebound tomorrow, overcoming too much (unnecessary) pessimism surrounding rate hike.  Moreover, since the interest rate is still too low in both US and UK, the liquid money is...

  Key Factors An interest rate hike is pushing up the USD.  The Dollar ($) and the risky assets such as emerging markets are inversely proportional.  But companies like Wockhardt Ltd (Rs.257.05) which gets major export revenues stands to benefit. The Net debt-equity ratio of Wockhardt Ltd as on September 30, 2021, stood at 0.54 -- this is likely to improve further. [Exports accounts for major portion of Wockhardt Ltd's revenue --- revenue from exports stood at Rs.2,282 crore (approximately 83% of total revenue) in FY21 compared with Rs.2,329 crore (approximately 73% of the total revenue) in FY20]. Photo : Live Mint Unfortunately, in these kinds of pessimistic environments, no trigger generally works. The Chief Causes of Market Fall: 🌟The rise in interst rates in US and UK to highest levels in the last one decade. 🌟The Bank of England giving a future inflation projection of 10%. 🌟The rise in Repo rate and the CRR in India. 🌟High crude price is pushing up manufacturing ...

  Dollar, Ruble, INR and Indian Markets The RBI on Wednesday raised its key lending rate by 40 basis points to 4.40% with immediate effect. The central bank also hiked the cash reserve ratio by 50 basis points. The decision was taken by the monetary policy committee (MPC) in an off - cycle meeting with the central board held on May 2-4, 2022. The  RBI governor Shaktikanta Das said the decision was taken in view of rising inflation, geo-political tensions, high crude oil prices and shortage of commodities across the globe, which have impacted Indian economy As a response to the repo rate high, the S&P BSE Sensex dropped 1,306.96 points or 2.29% to 2.29% to 55,669.03. The Nifty 50 index lost 391.50 points or 2.29% to 2.29% to 16,677.60. The NSE's India VIX jumped to 7.86% to 21.88. [ Update : Expectedly, the domestic bourses have opened in positive note. The BSE Sensex was last seen trading at 56,119.924 up 50.89 points (+0.81%) while the Nifty was seen at 16,816.20 up 138...

Winning Strokes The BSE Sensex closed at 56,975.99 down 84.88 points (-0.15%) while the Nifty was seen at 17,069.10 down 33.45 points (-0.20%). The indices closed with minor losses due to late buying in metals, private banks and media shares, while autos, IT and consumer durables dragged the markets. Though rising dollar index and continuous selling by the FIIs dampened the mood, India's robust GST collection (GST revenue collection touched an all-time high of Rs.1,67,540 crore in April), firm commodity prices and improving Manufacturing PMI (Rose to 54.7 in April, from 54 in March) for the month of April supported the sentiment.  The volatility in the domestic bourses is expected to continue as NSE's India VIX, the gauge of market's expectation of volatility over short term rose 4.46% to 20.2825. In such circumstances, the traders are suggested to buy fundamentally good counters in market dips as I feel that there is minimum downside of Nifty from here. In an encouraging d...

Winning Strokes On last Friday the BSE Sensex closed at 57,060.87 down 460.19 points (-0.80%), while the Nifty was last seen at 17,102.55 down 142.50 points (-0.83%). The Domestic equity benchmarks went into a tailspin during fag-end of the day on concerns over rising inflation and foreign fund outflows in the wake of unstable geopolitical situations. NSE VIX gained marginally and ended at 19.42. Meanwhile, the Russian President Vladimir Putin warned the West of a "lightning fast" response to countries who will dare to interfere in the war. In another significant development Russia halted the gas supplies to Poland and Bulgaria on Wednesday, because they refused to pay for the gas in Russian rubles, as demanded by Moscow.  In such uncertainties, the FIIs were net sellers to the tune of Rs.3648.30 Cr while the DIIs were net buyers of Rs.3490.30 Cr. Furthermore, India logged 3,377 new COVID-19 cases taking the country's total tally of cases to 4,30,72,176. The death toll c...