Broad Strokes, August 16, 2024

Japanese Stocks See Best Week in 4 Years

• Japanese stocks, particularly the Nikkei, experienced their best weekly performance in four years, surging 7.6%.
• Positive U.S. economic data alleviated recession fears and boosted global market sentiment.
• The rally was fueled by strong retail sales and declining jobless claims in the U.S.
• Broader Asian markets also reflected this optimism, indicating a shift from recent volatility to a more stable and risk-on sentiment.

Nifty, Sensex Rise on Easing Recession Fears

• Indian benchmark indices, the Nifty 50 and Sensex, experienced a positive trading session due to easing recession fears in the U.S.
• GIFT Nifty indicated a gap-up start, with Nifty futures trading up 202 points.
• The Sensex closed up 149.85 points, while the Nifty gained 4.75 points.
• IT sector led the gains, despite mixed sentiment among institutional players.

Sebi Chief Faces Potential Rules Violation

• Madhabi Puri Buch, head of SEBI, faces allegations of potential rules violations due to earnings from a consultancy firm during her tenure.
• Concerns raised by Hindenburg Research about a conflict of interest related to Buch’s investigations into the Adani Group.
• Bajaj Housing Finance plans an IPO with a targeted valuation of Rs 56,000-59,000 crore.
• Suprajit Engineering announced a share buyback worth Rs 112.5 crore.
• Smartworks and Ecom Express have filed draft papers for their respective IPOs.

M&M Stock Rises After Thar ROXX Launch

• Mahindra & Mahindra’s stock surged over 3% following the launch of its new Thar ROXX SUV, starting at ₹12.99 lakh.
• Analysts project strong demand and sales of 8,000 to 10,000 units per month, with around 50,000 bookings anticipated on the first day.
• Nomura and Morgan Stanley maintain ‘Buy’ ratings on M&M, citing the Thar ROXX’s potential to redefine the urban SUV market.

Balrampur Chini and OFSS Show Bullish Trend

• Balrampur Chini and OFSS have demonstrated a bullish trend, with rising prices and increased open interest.
• HDFC Life and SBI Life are showing bearish signs, marked by increasing open interest and declining stock prices.
• HCL Technologies recommended for purchase after breaking out of a consolidation pattern.
• Naukri, Voltas, and Laurus Labs have seen long positions build up, indicating potential for further gains.

Ola Electric Shares Surge Post-IPO

• Ola Electric Mobility’s shares surged 75% to Rs 133.08 since its IPO, driven by strong trading volumes and the launch of its electric motorcycle lineup.
• The company reported a record quarterly revenue of Rs 1,718 crore for Q1 FY25, despite a widening net loss of Rs 347 crore.
• HSBC initiated coverage with a ‘buy’ rating and a target price of Rs 140, citing expected reductions in EV manufacturing costs and regulatory support.

HAL Shares Face Delivery Concerns

• Shares of Paras Defence and Space Technologies surged 5% after securing a Rs 305 crore order from L&T.
• Year-to-date, Paras Defence’s stock has risen nearly 60%, with significant increases in net profit and revenue.
• Hindustan Aeronautics Ltd (HAL) reported a 77% YoY profit increase but faces delivery concerns for the LCA Tejas Mk1A due to supply chain issues.

Navratna Firm Reports 121% Profit Surge

• Mazagon Dock Shipbuilders reported a 121% YoY increase in net profit for Q1 FY25 to Rs 696 crore.
• Despite strong performance, analysts are bearish on the stock due to overvaluation concerns.
• ICICI Securities and Nirmal Bang Institutional Equities issued ‘Sell’ recommendations, projecting a potential downside of 77% from current levels.
• Hindustan Aeronautics also reported a 77% profit increase, highlighting mixed sentiment in the defense sector.