Market Capsule 20th April'24 | War Tensions; Nifty's Roadmap
- samarwealth
- Apr 20, 2024
- 5 min read
Rising Volatility in Global Markets
As we look ahead to next week, the escalating tensions between Iran and Israel continue to inject volatility into global markets. This past week witnessed significant fluctuations, largely influenced by military engagements between the two nations—the first time direct strikes have been exchanged on each other's territory. Despite fears of oil prices surging to $100 a barrel, U.S. crude oil and the global benchmark Brent concluded the week approximately 3% lower.
Amidst the uncertainty, global investors are increasingly gravitating towards safer assets. This shift is underscored by the rising prices of traditional safe havens like gold and silver. The primary concern remains the potential impact on oil prices, particularly for countries heavily reliant on oil imports such as India.
India, maintaining a balanced foreign policy stance, recognizes the conflict as predominantly regional. Although the current situation does not heavily impact the Indian economy directly, the potential risks could escalate if Iran targets key oil infrastructure in Saudi Arabia or disrupts shipping in the Persian Gulf.
On Friday, the Nifty demonstrated a strong recovery from its intraday low, finding solid support at 21,900. Should the geopolitical tensions between Iran and Israel ease, the market is poised for a potential uptick, with an optimistic target of 22,500. The sectors to monitor in the coming week include power infrastructure, defense, and metals, as they are expected to be key drivers of the market's direction.
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Charting the Pulse of Indices: A) Sector Wise Performance
This week, almost all Indian sectoral indices showed Stagnant Movement lead primarily by Metals and Oil & Gas. Nifty IT index Underperformed the other indices considerably. Nifty Auto and Infra index however stood strong and is likely to extend the gains with leading names like Mahindra & Mahindra, Motherson, Maruti etc. showing relative strength.
B) Heatmap
Heatmap helps investors quickly understand the performance of multiple stocks or sectors in a single view. Color coding, with varying shades indicating the degree of movement - red for declines, green for gains, and sometimes grey or other colors for little or no change. Heatmaps are effective for spotting market patterns and can be a time-saving resource in investment analysis.
C) Market Breadth
A) Nifty 500
Source: Stockedge
Analyzing market breadth is important as it provides insight into the underlying strength or weakness of the market, beyond just looking at benchmark indices. Breadth measures the percentage of securities in NIFTY 500 surpassing specified moving averages over the specified period. Comparing the market breadth of nifty 500 during the previous week's trading sessions, we can analyze that number of stocks above key moving average support areas are reducing by the end of week. This can be considered as a sign of weakness if change is seen to be significant.
Elecon Engineering Company Ltd.
Established in 1960, Elecon Engineering Company Ltd. specializes in the manufacturing and distribution of power transmission and material handling equipment both domestically in India and globally. Additionally, the company is involved in the steel and non-ferrous foundry sectors.
The company was among the pioneers in introducing Mechanized Bulk Material Handling Equipment in India. Since then, it has evolved into the leading provider with a comprehensive range of Bulk Material Handling Equipment and Products. The company now serves various industries such as steel, power, marine, chemical, cement, and coal, among others, by offering a diverse array of material handling solutions tailored to their specific requirements.
As one of the largest industrial gear manufacturers in Asia, the company commands a significant market share for industrial gear in India, standing at approximately 39%. It holds the distinction of being the first in India to produce advanced equipment for bulk material handling, boasting a product range that caters to virtually every industrial sector in the country. Furthermore, it is the sole company in India with the capability to manufacture complex gearbox solutions for the defense sector, specifically for the Indian Navy.
The company's prestigious customer list includes Ultratech Cement, British Steel, HAYLEY, Tetra Pak, Adani, Larsen & Toubro (L&T), NMDC, SAIL, BHEL, and others.
Product Portfolio:
Financial Highlights:
Key Takeaways:
Seven good-looking charts for next week 1. Chennai Petroleum Corporation Ltd.
2. EMudhra Ltd.
3. SMS Pharmaceuticals Ltd.
4. Cochin Shipyard Ltd.
5. Electrosteel Casting Ltd.
6. Tata Power Company Ltd.
7. Kirloskar Oil Engines Ltd.
Order Wins:
Deep Industries has secured an order valued at Rs 81 crores from Oil India. Link
Happy Forgings has secured an order worth Rs 500 crore from a prominent global Tier 1 manufacturer specializing in automobile driveline components and systems. Link
RVNL announces winning a contract valued at ₹440 crore. Link
Bonus Share Issue & Share Splits:
Appointments & Resignations:
Safari Industries has announced the appointment of Mr. Shubham Kapoor as General Manager of Human Resources, effective from April 15, 2024. Link
Punjab & Sind Bank has appointed Mr. Prem Chand Kumar as the Chief Technical Officer (CTO) for a three-year term starting from April 15, 2024. Link
Brigade Enterprises has announced that its Board has approved the appointment of Mr. Jayant Bhalchandra Manmadkar as the Chief Financial Officer and Key Managerial Personnel, effective from April 18, 2024. Link
ICICI Lombard has announced the appointment of Mr. Steve Dsouza as the Chief Risk Officer effective April 18, 2024. Following this appointment, Mr. Steve Dsouza will no longer serve as the Chief Information Security Officer of the company.
Safari Industries has appointed Mr. Ramchalam Krisnaswamy as Assistant Vice President - Hyper Sales, effective from April 17, 2024. Link
Agreement:
Mphasis has entered into a long-term Strategic Collaboration Agreement (SCA) with Amazon Web Services (AWS) to introduce Gen Al Foundry, a new initiative for financial services. Link
Ambuja Cements has finalized an agreement with My Home Industries Private Limited to acquire its 1.5 MTPA Cement Grinding Unit located in Tuticorin, Tamil Nadu. Link
Cipla has entered into a business transfer agreement to acquire the distribution and marketing segment of the cosmetics and personal care business from Ivia Beaute Pvt Ltd, India. This acquisition will be conducted through a slump sale on a going concern basis. Link
Biocon Limited has entered into an exclusive licensing and supply agreement with Biomm S.A. for the commercialization of generic Ozempic (Semaglutide) in Brazil. Link
Other Important News:
Coal India's Chief Officer has reported that the company has surpassed its capital expenditure target for the year by 120%, effectively achieving an expenditure of Rs. 16,500 crores. Link
JIO Financial Services has formed a 50:50 joint venture with BlackRock aimed at engaging in the wealth management sector. This includes establishing a wealth management company and subsequently setting up a brokerage firm in India. Link
One 97 Communications has been granted approval by the National Payment Corporation of India (NPCI) to immediately commence the user migration to new Payment System Provider (PSP) bank handles. Link
HUDCO has announced that the Department of Public Enterprises has awarded the company Navratna status. Link
NESTLE: Ministry of Consumer Affairs calls on FSSAI to take prompt action against Nestle for alleged malpractices - Business Today Link
That's all for now! I hope you enjoyed the content. Do share your comments below! Disclaimer: Any stock or company discussed above should not be considered as a Buy/Sell recommendation. We personally or our clients might or might not have a position in any of the stocks discussed. This newsletter is purely is for educational purposes only.
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