Weekly Market Review
Dalal Street saw its worst week in over 2 years with Nifty & the Sensex down over 4 per cent, the biggest weekly fall since June of 2022. With this the BSE-listed companies have wiped out nearly Rs 20 lakh crore in investor wealth.
From the start of the week, the market followed a downtrend trajectory, with benchmark indices closing at lower levels compared to the previous day’s closing, driven by concerns over sustained selling pressure from the Foreign Institutional Investors (FIIs) and anticipation surrounding the US Federal Reserve’s key policy announcement.
Jerome Powell at a news conference in Washington | Getty Images
Coming to the actual outcome, Fed Chair Jerome Powell delivered what the street was expecting: a 25 bps rate cut, bringing it to the range of 4.25-4.50 per cent, but the commentary by him turned out to be hawkish. The Fed now projects just two rate cuts next year as compared to four previously expected. The fewer rate cuts in the coming year spooked the global markets including India.
However, he said they are very optimistic about the economy, calling the recent performance ‘remarkable’. They have, in fact, raised the GDP outlook for this year to 2.50 per cent and 2.10 per cent in 2025 from the earlier 2.0 per cent in the September meeting.
Coming to the domestic market, we had some positive news coming in terms of macro-economic numbers. The net direct tax collection till 17th December 2024 rose to 16 per cent YoY to Rs 15.82 lakh crore while advance tax collection rose 21 per cent to Rs 7.56 lakh crore during the period.
We expect corporate earrings to remain positive after strong advance tax collection.
We also had December Service PMI coming to a 4-month high at 60.8 vs 58.4 the previous month, Manufacturing PMI surging to a 2-month high at 57.4 vs 56.5 and Composite PMI during the month of December reported a 4-month high at 60.7 vs 58.6 the previous month. The Wholesale Inflation (WPI) fell to a 3-month low of 1.89 per cent vs 2.36 per cent the previous month against the consensus expectation of 2.1 per cent.
Earlier, we had December inflation decreasing to 5.48 per cent from 6.21 per cent in the previous 14 months, and November IIP growing 3.5 per cent, a 3-month high, likely to boost market sentiment. Strong economic data suggests that a recovery from lower levels is possible.
With this, let me present to you our weekly portfolio review.
How Did the Markets Fare Last Week?
On a weekly basis, which ended on Friday, the Indian benchmark indices ended flat. Sensex and Nifty were down ~5.0 per cent each, while Midcaps were down 3.2 per cent.
Crude and FII Flows
Brent crude oil prices traded around USD 73/bbl as expectation for the fewer interest rate cut by the Fed next year boosted the dollar. On the other hand, FIIs continue to remain net sellers.
Sector in Focus
Pharma, FMCG and Realty remained in focus during the week.
BSE-listed Companies Market Cap Hits $5 Trillion Mark For First Time | Representative Image
KPI Green:
KPI Green Energy has signed a Memorandum of Understanding (MoU) with the Government of Rajasthan for the development of Hybrid, Solar & Wind Power Projects at Jaisalmer (Ramgarh), Rajasthan. By signing this MOU, KPI Green demonstrates mutual commitment to the growth of the renewable energy sector and vision for a sustainable, clean energy future.
SpiceJet:
SpiceJet has entered into a services agreement with StandardAero Inc., a leading U.S.-based engine MRO (maintenance, repair and overhaul) provider and a ‘Premier MRO’ provider for CFM LEAP-1B engines. This collaboration will enable the restoration of SpiceJet’s grounded Boeing 737-8 MAX fleet.
Further, SpiceJet has reached an amicable settlement with Genesis, resolving their over USD 16 million dispute. Under the agreement, SpiceJet will pay Genesis USD 6 million and Genesis will acquire $4 million in SpiceJet equity at a price of Rs 100 per share.
BASF:
The Board has accorded its in-principle approval for demerger of company’s Agricultural Solutions business into a separate listed legal entity. This will enable operational flexibility, leverage differentiated steering and create value.
The company’s Agricultural Solutions business has generated sales of Rs 2,006.46 crore, representing 14.57 per cent of the total revenues of the company for FY24.
IOL Chemicals:
The Board Meeting is scheduled for 27th December 2024 to consider and approve the alteration in the share capital of the Company by sub-division / split of existing equity shares having face value of Rs 10 each, fully paid up, as may be determined by the Board of Directors. A sub division / split is generally aimed at making shares more affordable and to increase liquidity in the market.
Ambuja Cement:
Ambuja Cements announced separate Schemes of Arrangement of its subsidiaries Sanghi Industries Limited (SIL) and Penna Cement Industries Limited (PCIL). Aimed at enhancing shareholder value, this consolidation will help to streamline the organisation structure and simplify compliance requirements for effective governance.
For every 100 equity shares of SIL with a face value of Rs 10 each, Ambuja Cements will issue 12 equity shares with a face value of Rs 2 each, to eligible shareholders of SIL.
Subject to requisite approvals, the transaction is expected to be completed within 9-12 months.
Cellecor Gadgets:
Cellecor Gadgets announced its partnership with EPACK Durable Private Limited, a leading Original Design Manufacturer and Original Equipment Manufacturer in the living appliances space. This collaboration aims to enhance Cellecor’s air conditioner portfolio by leveraging EPACK Durable’s advanced manufacturing capabilities and technical expertise.
Exide Industries:
The company has invested Rs 99 crore by way of subscription in the equity share capital of its wholly owned subsidiary, “Exide Energy Solutions Ltd” (‘EESL’), on rights basis. With this investment, the total investment made by the company in EESL stands to Rs 3,152.24 crore. There is no change in the shareholding percentage of the company in EESL pursuant to such an acquisition.
ESSL is in the process of setting up a green field plant at Bengaluru for manufacturing & selling lithium-ion battery cells, modules and pack business. The equity investment in ESSL on a right basis is to fund the above green field project and meet its various funding requirements.
Texmaco Rail & Engineering:
The company has received an order for construction of 9 transmission lines on turnkey basis valuing Rs 187.41 crore from Chhattisgarh State Power Transmission Co. Ltd., a Government of Chhattisgarh Undertaking, which is to be executed over a period of 15 months.
RVNL:
Rail Vikas Nigam Limited (RVNL) received Letter of Acceptance from Maharashtra Metro Rail Corporation Limited for construction of elevated metro stations for various locations. The domestic order won by the company is to be completed in 30 months and the value of the said order won is Rs 270 crore.
Gravita:
The Board has approved fund raising via the qualified institutional placement (QIP) on 16th December 2024, keeping a floor price of Rs 2,206.49 per share, a discount of 1.45 per cent from the current price which is Rs 2,239.05. Further, the company may, at its discretion, offer a discount of not more than 5 per cent on the Floor Price so calculated for the QIP.
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