Indian indices witnessed a positive start on Friday amid positive global cues. On Thursday, the markets bounced back strongly after registering losses in the previous session. The indices have witnessed turbulence this week over multiple headwinds including the Ukraine war, surging inflation, central bank monetary tightening and Chinese Covid lockdowns. However, the global indices were bolstered by upbeat technology earnings in the US, brushing aside fears of economic slowdown. The Wall Street indices ended sharply higher in Thursday’s overnight session after reports of strong quarterly results by Facebook parent Meta uplifted beaten down tech and growth stocks, despite worries about US economy’s contraction in the first quarter. The Apple and Amazon stocks also rallied before their quarterly results were announced. In Asia, shares rose in South Korea, Shanghai, and Australia, while that in Hong Kong declined in early trade on Friday. The market in Japan was closed on Friday for Showa Day.
BSE indices in early trade: Sensex off day’s high amid volatility
Mixed quarter; NIM the key monitorable: Prabhudas Lilladher on Axis Bank
Rating: BUY | CMP: Rs780 | TP: Rs940
Axis bank earnings were mixed as operating income missed estimates by 4% due to weaker margins although PAT was a beat at Rs41.2bn (PLe: Rs39.8bn) driven by lower provisions (due to stronger recoveries). Loan growth was a tad higher led by retail, however the management was a bit cautious on credit growth in FY23E owing to a tougher global environment. The likelihood of reaching the guided RoE of ~16% seems lower in the medium term as margin recovery could be protracted and opex may remain elevated. However, balance sheet strength and improving asset quality provide some cushion. Valuation discount to ICICIBC might widen to 20-25% (currently 16%) unless NIM improves. With RoE of 14.2% in FY24E, we maintain multiple for AXSB at 2.3x FY24E ABV though cut TP from Rs975 to Rs940. Maintain BUY.
BSE Power index muted in early trade; Adani Power, Adani Green, JSW Energy drag, NHPC, Adani Transmission gain
Beat on estimates; Clarity on Holcim’s exit holds the key: Prabhudas Lilladher on Ambuja Cement
Rating: HOLD | CMP: Rs383 | TP: Rs400
Ambuja Cement (ACEM) started the new calendar year with better than expected earnings. EBITDA fell 19% YoY to Rs7.9bn, above our/consensus estimates (CE) by 10%/16%. Higher clinker sales volume and lower other expenses drove the beat. While, we maintain our estimates as elevated other expenses in H2, a usual trend, would keep margins under check.
ACEM delivered material turnaround in earnings over last couple of years. The major contributors to this turnaround were multifold increase in volumes under MSA, optimisation of fixed costs and reduction in specific energy consumption. On the incremental basis, we don’t see meaningful scope for further cost reduction. Theme of capacity expansion would get delayed due to likely exit of parent. As the valuations have surged to rich territory with EV/EBITDA of 14x and EV/t of USD170/t, we downgrade rating on stock to Hold with TP of Rs400 with EV/EBITDA of 14.5x CY23e.
Deferral of RM cost to impact margins in 1HFY23: Prabhudas Lilladheron Bajaj Auto
Rating: ACCUMULATE | CMP: Rs3,834 | TP: Rs4,120
Bajaj Auto’s 4QFY22 EBITDA margin surprised positively at 17.1% (+190bps QoQ, PLe: 14.9%) driven by 1) deferral of raw material cost (RM cost at 71.9% of sales vs 74.7% QoQ), 2) positive impact of price increase, 3) improved USD realization in exports and 4) favorable sales mix. Deferred RM cost will cause an impact of 3.5-4% in 1QFY23, against which ~1.5% price hike taken in Apr22.
We remain positive on BJAUT’s growth prospects as (1) domestic 2W volumes are expected to grow in near-term led by marriage season, opening up of colleges and offices (however genuine demand needs to be monitored post Jun-22), (2) exports demand will likely remain steady and (3) 3W volumes (+28% in FY22) to pick-up momentum post opening up of the economy and increasing CNG demand. Considering near-term risks like commodity cost inflation and chip shortage, we trim our margin estimates by 90/60bps for FY23/24. Maintain ‘ACCUMULATE’, with a revised TP of ₹4,120 at 17x FY24E EPS (earlier 16x) on improving domestic outlook for 2Ws and 3Ws, along with increasing volumes of EVs.
Gold rates today rise but still down ₹2,000 in 10 days
Gold and silver rates today edged higher in Indian markets, tracking a pullback in global rates after the precious metals fell to two-month lows. On MCX, gold futures were up 0.58% to ₹51,560 per 10 gram but are still down down about ₹2,000 from April 18 highs. Silver futures today rose 0.5% to ₹64,915 per kg.
Nifty50 at open: Trades above 17,300; Sun Pharma, IndusInd Bank, DRL, M&M lead, SBI Life, Axis Bank drag
Sensex at open: Surges over 200 points; Sun Pharma, Tata Steel lead, Axis Bank slips 3%
Nifty50 at pre-open: Trades above 17,300; Bajaj Finserv, Reliance, Coal India lead, Axis Bank, Bajaj Auto drag
Sensex at pre-open: Jumps 300 points; TechM, Bajaj twins, Wipro, Reliance lead, Axis Bank drags
Gold inches higher, but faces worst month in seven
Gold prices edged higher on Friday as lower U.S Treasury yields outweighed pressure from an elevated dollar, but bullion was still headed for its biggest monthly drop since September on fears of aggressive interest rate hikes by the Federal Reserve.
Spot gold was up 0.1% at $1,897.01 per ounce, as of 0054 GMT. U.S. gold futures rose 0.4% to $1,898.10.
Oil heads for longest run of monthly gains since early 2018
Oil is poised to eke out a fifth monthly advance after another tumultuous period of trading that saw prices whipsawed by the fallout of Russia’s war in Ukraine and the resurgence of Covid-19 in China.
West Texas Intermediate futures fluctuated near $105 a barrel on Friday and are almost 5% higher in April. The war has entered its third month despite diplomatic efforts for a cease-fire, and the European Union appears to be making gradual progress toward a ban on Russia crude imports.
China’s virus outbreak has added another source of volatility to the market. The nation has extended mass testing to more cities, with lockdowns leading to swelling oil stockpiles and putting the world’s biggest crude importer on track for the largest hit to demand since the early days of the pandemic.
Petrol, diesel prices today: Check fuel rates in Delhi, Mumbai, other metros
The prices of petrol and diesel have remained unchanged for the last 23 days on Friday, 29 April. Petrol and diesel prices were last hiked by 80 paise a litre each on 6 April,Wednesday, taking the total increase in rates in 16 days to ₹10 per litre.
Maruti Suzuki Q4FY22 preview: Expect a healthy quarter, PAT likely to record strong growth sequentially
Automobile manufacturer, Maruti Suzuki is set to announce its financial performance for the quarter and year ended March 31, 2022 (Q4FY22), today. Ahead of the earnings, on Thursday, Maruti shares witnessed positive sentiment from investors on stock exchanges.
Biocon Q4 profit declines by 4% to ₹283 cr
Biocon Ltd on Thursday reported a 4 per cent decline in consolidated net profit to ₹283.9 crore in the fourth quarter ended on March 31, 2022.
The company, which posted a consolidated net profit of ₹296.4 crore in the same quarter previous fiscal, has appointed former HSBC India Chairperson Naina Lal Kidwai as an independent director, Biocon Ltd said in a regulatory filing.
Cryptocurrency prices today: Bitcoin, ether, Litecoin gain while dogecoin, Shiba Inu slip
Cryptocurrency prices today were mixed with Bitcoin trading above the $39,000 mark. The world’s largest and most popular cryptocurrency rose 0.6% to $39,704. The global crypto market’s value today gained nearly a per cent in the past 24 hours to $1.92 trillion, according to pricing from CoinGecko.
Lower provisions propel Axis Bank Q4 net up by 49.77 pc to ₹4,434 cr
Axis Bank on Thursday reported a 49.77 per cent jump in its consolidated net profit for the March quarter to ₹4,434 crore on a consolidated basis, helped by a steep reduction in money set aside for bad debts.
On a standalone basis, the third-largest private sector lender reported a 54 per cent jump in its post-tax net at ₹4,118 crore. For the fiscal year 2021-22, it reported a 98 per cent jump in its post-tax profit at ₹13,025 crore.
Day trading guide for Friday
6 stocks to buy today — 29th April
Amazon reports rare quarterly loss as online shopping slows
Amazon reported its first quarterly loss since 2015 on Thursday, its money-making juggernaut stalled by a slowdown in pandemic-induced online shopping and a huge write-down of its investment in an electric-vehicle startup.
The Seattle-based e-commerce giant’s stock fell 9% in after-hours trading.
Amazon reported a loss of $3.84 billion, or $7.56 a share, for the first three months of the year. A year ago, it reported a profit of $8.1 billion, or $15.79 a share, for the first quarter. Wall Street analysts expected a profit of $8.35 a share in the latest quarter, according to FactSet.
Hong Kong shares open flat
Hong Kong stocks barely moved at the open of trade Friday as traders struggled to track a strong rally on Wall Street, with tech firms in the spotlight after Apple and Amazon reported below-forecast earnings.
The Hang Seng Index inched down 4.77 points to 20,271.40.
The Shanghai Composite Index rose 0.36 percent, or 10.58 points, to 2,986.06, while the Shenzhen Composite Index on China’s second exchange added 0.80 percent, or 14.44 points, to 1,822.91.
Apple sees bigger supply problems after strong start to year
Apple Inc on Thursday forecast bigger problems as COVID-19 lockdowns snarl production and demand in China, the war in Ukraine dents sales and growth slows in services, which the iPhone maker sees as its engine for expansion.
Shares were down 2.2% in late trade after executives laid out their glum outlook on a conference call. The news outweighed record profit and sales for Apple’s fiscal second quarter, which ended in March.
Asia stocks up; US futures fall on tech outlook
Most Asian stocks climbed Friday following a Wall Street rally, though slumps in Amazon.com Inc. and Apple Inc. in late trading dented some of the optimism and left U.S. equity futures in the red.
An Asia-Pacific share gauge rose, helped by South Korea, while China and Hong Kong fluctuated. Contracts on the S&P 500 and technology-heavy Nasdaq 100 retreated but came off session lows. Japan is closed for a holiday.
Amazon projected sluggish sales growth and Apple flagged supply constraints. E-commerce giant Amazon shed 9% in extended trading and Apple lost 2%. That partly clouded the S&P 500’s best climb since early March in regular hours.
The yen pared a tumble while staying near 20-year lows. The dollar dipped but is set for its best week since 2021 amid investor caution and as the Federal Reserve readies sharp interest-rate hikes to slow inflation.
Oil was near $105 a barrel, as traders evaluated the prospect of a European Union ban on Russian crude in retaliation for the invasion of Ukraine.
Corporate earnings are just the latest variable to whipsaw markets. There are concerns that tightening U.S. monetary policy, the war in Ukraine and China’s Covid outbreak all herald more challenges for investors.
US economy shrinks, threats loom, but growth likely to last
The U.S. economy shrank in the first three months of the year, and faces threats from high inflation and rising interest rates, yet economists foresee a return to growth for the rest of 2022 based on the strength of the job market and consumer spending.
The first quarterly decline in gross domestic product since the pandemic hit in 2020 – a 1.4% drop on an annualized basis – is not likely a prelude to recession, economists say. That may bring little comfort to President Joe Biden and Democrats, who face mid-term elections this year in which rising prices for food, energy and other essentials will be a major theme of Republican opposition.
Wall Street ends sharply higher, lifted by Meta and Apple
Wall Street ended sharply higher on Thursday after a strong quarterly report from Meta Platforms lifted beaten down technology and growth stocks and offset worries about the U.S. economy’s contraction in the first quarter.
The Facebook parent surged 17.6% after the social network reported a larger-than-expected profit and rebounded from a drop in users.
Apple Inc, the world’s most valuable company, and e-commerce giant Amazon.com Inc both rallied more than 4% ahead of their quarterly reports later in the day.
In extended trade, Amazon tumbled about 10% after the company forecast current-quarter sales below Wall Street estimates.
The S&P 500 has gained or lost 2% or more in a day some 32 times so far in 2022, compared to 24 such days in all of 2021.
The U.S. economy unexpectedly contracted in the first quarter as Covid-19 cases surged again, and government pandemic relief money dropped.
The first decrease in gross domestic product since the short and sharp pandemic recession nearly two years ago, reported by the Commerce Department, was mostly driven by a wider trade deficit as imports surged, and a slowdown in the pace of inventory accumulation.
Unofficially, S&P 500 climbed 2.47% to end the session at 4,287.50 points.
The Nasdaq gained 3.06% to 12,871.53 points, while Dow Jones Industrial Average rose 1.85% to 33,916.39 points.
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