Broad Strokes, July 16, 2024

Market reacts positively to prospect of Trump victory

• Financial markets rallied, particularly benefiting Trump Media and Technology Group’s shares.
• Sectors like oil, defense, and cryptocurrency saw gains with expectations of tax cuts and a hawkish trade policy.
• Analysts anticipate Federal Reserve interest rate cuts and ongoing corporate earnings reports influencing market sentiment.

Stock Market Hits Fresh High

• Indian stock market reached new highs with blue-chip indices surging, driven by IT stocks.
• Midcap stocks like Godrej Properties and LIC Housing Finance hit all-time highs; Infosys and HUL reached new 52-week highs.
• Gains in realty, FMCG, and IT sectors; market suggests a consolidation phase for Nifty and support levels for Bank Nifty.

Indian bonds attract global flows amid RBI rate cuts

• Foreign investors are drawn to Indian bonds due to high yield, stable currency, and potential capital appreciation.
• $1.5 billion flows into short-term government securities following India’s inclusion in JPMorgan’s bond index.
• US and Japanese funds focus on Indian equities; expectations for Union Budget 2024 and potential tax reforms monitored.

IT Sector Earnings Preview

• Infosys projected to lead Q1FY25 growth with 2-3% YoY revenue increase and 4-10% YoY net profit rise.
• Key focus areas: Liberty deal updates, FY25 revenue growth guidance, and macroeconomic impacts.
• LTIMindtree expected to show positive results; auto sector faces challenges while FMCG sector anticipates growth.

HUL sells ‘Pureit’ to AO Smith

• HUL stock rose 3% after Board approved sale of Pureit to AO Smith for Rs 601 crore.
• Move aligns with HUL’s strategy to focus on core areas; Pureit contributed less than 1% to FY24 turnover.
• Sale viewed as strategic shift amidst challenging market conditions, allowing AO Smith to strengthen its Indian market presence.

Bajaj Auto’s Strong Q1 Performance

• Bajaj Auto reported a 19.44% increase in Q1 FY25 profit, driven by strong operational results and revenue growth.
• Focus on premium motorcycles and electric vehicles contributed to revenue expansion.
• Despite initial stock price increase, shares settled at 0.22% gain; strategic mix improvement and margin expansion highlighted.

Bharti Hexacom stock surges on JPMorgan’s overweight rating

• Bharti Hexacom’s stock surged 9.5% after JPMorgan’s ‘overweight’ rating with a target price of Rs 1,280.
• Strong position in wireless services and presence in underpenetrated regions like Rajasthan and North East noted.
• Expected tariff hikes and increased dividend payouts reflect positive investor sentiment and growth potential.

SpiceJet stock soars on Q4 profit surge

• SpiceJet’s stock rose 7% following a six-fold increase in Q4 profit to Rs 119.6 crore.
• Consolidated net loss for FY24 reduced by 73%, with plans to raise Rs 2,000 crore by August.
• Positive financial results and strategic expansion efforts indicate a growth-oriented shift amidst legal and liquidity challenges.

Vodafone Idea stock gains on AGR dues plea

• Vodafone Idea’s stock gained as Supreme Court agreed to review its plea regarding AGR dues.
• Citi maintains ‘buy’ rating with a target price of Rs 23, indicating a potential 39% upside.
• Review of AGR dues plea crucial for financial stability; shares rose 2.8% on news; multibagger returns reflect sector challenges and opportunities.