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23 June 2021, Pre Market Report: Can we confirm the trend reversal this week?

Good Morning everyone, as we discussed in the post-market report yesterday, markets fell to the end of the day as foreign institutional investors (FII's) sold huge yesterday which brought some weakness in the market. They generally get active after 1 pm and that can be seen in the chart yesterday. If you missed reading yesterday's post-market report, do read that by clicking here.

Auto, FMCG, Realty & Banks are looking good to rally as the economy opens up. Auto lead the day yesterday, FMCG has been stable too, the Banking sector still has been lagging and hence, we can expect some power to banking sector soon.

There has been a sharp growth in the advance tax payment by Auto & IT sectors. This indicates that these sectors have not been much affected by lockdown. This is led by Maruti Suzuki, Hero MotoCorp, TCS and Infosys. These four companies reported a jump between 44 percent and 200 percent in the April-June quarter of this financial year on account of a low base.

Even top financial institutions such as SBI and ICICI Bank reported lower (but double-digit) growth in tax payment.

The second installment will have a clearer picture.

Heavyweights such as Reliance Industries, Tata Motors, HDFC, and ITC are yet to pay their first installments.

Global markets are doing good, as Powell gave an assurance that the interest rates hike will be handled patiently as the economy revives. This gave confidence to the US market and S&P 500 closed at a record high last night. However, we can see a good amount of volatility in the coming days as fed policy details keep coming out in different interpretations and it does affect the markets highly.

Asian markets were mixed in Wednesday morning trade, following overnight gains stateside that saw the tech-heavy Nasdaq Composite rising to a record high.

Mainland Chinese stocks declined in early trade, with the Shanghai composite slipping 0.16% and the Shenzhen component dipping slightly. Hong Kong’s Hang Seng index advanced 0.47%. The Nikkei 225 in Japan sat below the flatline while the Topix index slipped 0.36%.

Trends on the SGX nifty confirm yet another gap up opening today, and the market may open around 15830-15850. But as discussed yesterday, 15900 will be strong resistance, and only if the Index breaks the resistance with power and closes above that, can we confirm a movement to 16000 records. However, tomorrow being the monthly expiry, expect the markets to be really volatile today & tomorrow.

Housing sales in the top 7 cities increased by 29% and new launches by 51% during this quarter against the corresponding period in 2020. The housing sector in the top seven cities staged a comeback post-COVID-19, ANAROCK's Q1 2021 data has indicated.

As many as 58,290 homes were sold in the top 7 cities in Q1 2021 in comparison to 45,200 units in Q1 2020 - effectively breaching pre-COVID levels.

Mid-segment housing saw the maximum new launches in the quarter with a 43% overall share, whereas the affordable housing segment accounted for 30%. The supply of luxury housing (priced less than Rs 1.5 crore) also rose by 31% in Q1 2021 against the corresponding period in 2020.

Results on June 23

Apollo Hospitals Enterprise, Asian Hotels (East), Allcargo Logistics, Andrew Yule & Company, Deepak Spinners, Empire Industries, HCC, MBL Infrastructures, Mcleod Russel India, Mercator, Munjal Showa, Precision Wires India, Schneider Electric Infrastructure, Sharon Bio-Medicine, Speciality Restaurants, Technofab Engineering, and V2 Retail will release quarterly earnings on June 23.

FII and DII data

Foreign institutional investors (FIIs) net sold shares worth Rs 1,027.94 crore, while domestic institutional investors (DIIs) net purchased shares worth Rs 302.45 crore in the Indian equity market on June 22, as per provisional data available on the NSE.

Stock Specific News

HDFC Bank | The bank, along with its subsidiary HDFC Securities, will pick up a 7.76 percent stake worth Rs 6.9 crore in Borderless Softtec. Also, HDFC Bank on Tuesday offloaded 19.8 lakh shares of Central Depository Services at an average price of Rs 936.4 apiece through a bulk deal on NSE.

Hero MotoCorp | The company will hike prices across the range of motorcycles and scooters by up to Rs 3,000 from July 1.

Vedanta | The company has been awarded the Kuraloi (A) North coal block in Odisha. The mine has geological reserves of 1,680 million tonnes and an estimated capacity of 8 million tonnes per annum.

NMDC | The company’s Q4FY21 net profit jumped to Rs 2,833.8 crore from Rs 347.3 crore, while revenue increased to Rs 6,847.6 crore from Rs 3,187.2 crore, YoY.

IDBI Bank | The government invited bids from transaction advisors and legal firms for assisting in the strategic sale of IDBI Bank.

Wabco India | The company’s promoter ZF International UK will sell a 2.64 percent stake in the company via an offer for sale at a set floor price of Rs 6,550 per share.

Bharat Electronics | The company’s Q4FY21 consolidated profit rose 30.6 percent to Rs 1,368.15 crore from Rs 1,046.97 crore, while revenue jumped 19 percent to Rs 6,917.47 crore from Rs 5,816.77 crore, YoY.

Sobha | The company’s Q4FY21 consolidated profit plunged 64.7 percent to Rs 17.9 crore from Rs 50.7 crore, while revenue fell 39.2 percent to Rs 553.4 crore from Rs 910.1 crore, YoY.

GE Power India | The company reported a higher consolidated profit at Rs 16 crore in Q4FY21 against Rs 14.87 crore in Q4FY20. Revenue jumped to Rs 930.5 crore from Rs 732.68 crore, YoY.

Krebs Biochemicals & Industries | The company said a group or section of employees from Krebs workers and staff union at Nellore unit are remaining absent from duties during various shifts in an unauthorized and unjustified manner. The company may face loss of production and hindrance in the operations due to the said strike of the workers.

Centrum Capital | The company reported a consolidated net loss of Rs 5.54 crore in Q4FY21 as against a net profit of Rs 25.05 crore, YoY. Total income jumped 18.2 percent to Rs 148.39 crore from Rs 125.56 crore, YoY.

GSS Infotech | Promoter Raghunadha Rao Marepally acquired 1.02 lakh equity shares via an open market transaction on June 16, increasing shareholding to 18.55 percent from 17.95 percent earlier.

Jaypee Infratech | Jaypee Infratech Ltd posted a consolidated net loss of Rs 491.60 crore for the quarter ended March 2021. The company had reported a net loss of Rs 940.53 crore in the year-ago period

NMDC | NMDC’s PAT for the quarter ended March 31 was 708 percent higher at Rs 2,838 crore compared to Rs 351 crore during the same period last fiscal. During the fourth quarter of the last fiscal, turnover stood at Rs 6,848 crore compared to Rs 3,187 crore in the same quarter in FY20.

Minda Industries | Minda Industries limited announced that it has won the bid to acquire of 51% stake in automotive lighting manufacture UZ Chasys LLC (UZ Chasys) in Uzbekistan.

Dabur | Dabur has become the first company to do away with paper cartons for toothpaste. This move is expected to result in an annual saving of 150 tonnes of paper. In addition, Dabur is also rolling out a carton-free low unit price pack for rural India.

So with all this info, let's enter into another day of investment with confidence. More discussions in our group.

-Srikant Rajan

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