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ICICIdirect Executive Posted on 09:36am 26-Nov-2021

TCS has been selected by The Multi Commodity Exchange India...

* Market Outlook

Indian markets are likely to open gap down on the back of weak global cues with mounting fears on slowing economic growth, elevated inflation, a global energy crunch and regulatory risks emanating from China.


*  Markets Yesterday

• Domestic markets ended lower tracking losses in IT, metals and select BFSI stocks amid expiry of F&O September series contract.

• US markets ended lower amid concerns about the outlook for inflation.


* Key Developments

• Output of eight core industries grew for a sixth consecutive month, increasing 11.6% YoY in August 2021 (9.9% growth in July 2021) on a lower base. Except for fertilisers and crude oil, which de-grew 3.1% and 2.3%, respectively, all other sectors grew – cement (36.3%), coal (20.6%), natural gas (20.6%), electricity (15.3%), refinery products (9.1%) and steel (5.1%). During April-August 2021, the sectors' output grew 19.3% YoY.

• As per latest RBI data on sectoral deployment, gross bank credit registered growth of 6.7% YoY at | 108.9 lakh crore, vs. 6.1% YoY growth in the previous month. Growth in retail and agriculture segments was at 12.1% YoY and 11.3% YoY, respectively. Industry segment witnessed tepid growth of 2.3% YoY mainly due to 1.7% de-growth in large industries while MSME (medium + micro & small) segment showed growth of 22.2% YoY.

• The government’s fiscal deficit for April-August 2021 was at 31.1% of budgeted estimates, the lowest in 18 years on the back of surge in the revenues and marginal increase in spending.

• Tata Steel has sold its entire stake in NatSteel Holdings (NSH) for an equity value of $172 million (| 1,275 crore). TS Global Holdings Pte (TSGH) (an indirect wholly owned subsidiary of Tata Steel) has executed definitive agreements with Toptip Holding Pte (a Singapore-based trader of iron ore and steel) to divest its entire equity stake held in NatSteel. The sale process of NSH shares has been completed and TSGH has received the consideration for the sale.

• The Department of Telecommunications (DoT) has issued notices to Vodafone Idea and Bharti Airtel to pay | 2000 crore and | 1050 crore, respectively, as penalties within three weeks for flouting licence conditions by denying Reliance Jio adequate points of interconnection (PoIs) in 2016. We expect the telcos to legally challenge this given their earlier stand that they had complied with norms.

• Bharti Airtel has said it will invest | 5,000 crore in expanding its data centre business with plans to build a data centre economy across 80 cities in India and triple its installed capacity to more than 400 MW by 2025. This announcement is in line with the management’s earlier guidance to expand the overall data centre business multifold over the next few years.

• As new norms relating to recurring payments kick in today, merchants and banking ecosystem fear that 50- 60% recurring transactions may fail on October 1, according to Business Standard. Under the new rules, all recurring transactions will need additional authentication. For payments exceeding | 5,000, a one-time password (OTP) will have to be validated by a customer each time a payment is due.

• According to The Economic Times, a consortium of lenders led by Uco Bank has sought RBI’s directions on pursuing recovery of dues from the Srei Group after loans worth about | 30,000 crore officially qualified to be moved to the list of NPA this quarter. Uco Bank, SBI have exposure of more than | 2,000 crore each.

• SBI, Bank of Baroda and Union Bank of India have each subscribed to 1.98 crore shares of National Asset Reconstruction Company. However, these banks will reduce their stake in NARC to 9.90% from 13.27% by December 31. Canara Bank has subscribed to 2.40 crore shares of NARC. It will reduce its stake in the asset reconstruction company to 12% from 16.09% by December 31. PNB has subscribed to 1.80 crore shares of NARC and will reduce its stake to 9% from 12.06% by December 31, according to Bloomberg.

• TCS has been selected by The Multi Commodity Exchange India (MCX), as the technology solution provider for its growth and transformation journey. As part of Project Udaan, TCS will help MCX build a new technology core, transforming its trading as well as post-trade functions, to support its future growth.

• Core sector output for August-21 expanded 11.6% YoY with cement production expanding the most by 36.3% on a YoY basis partially benefited due to lower base effect.

• NCLT has directed the board of Zee Entertainment Enterprises (ZEEL) to call for an extraordinary general meeting (EGM) by October 3, as sought by Invesco to comply with Section 100 of the Companies Act.

• According to data from the Inspector General of Registration (Maharashtra), 7,556 property deals were registered in Mumbai in September 2021, which is ~11% increase on an MoM basis. The registration number is 35% higher than September 2020 when 5,597 units were registered.

• NBCC (India) has been awarded the work order for construction of district and central drug warehouse, under National Health Mission (NHM), Lucknow having total project value of | 96.5 crore. While its order book remains robust at | 62,000+ crore, pick-up in execution and normalisation in margin remains key.

• Mahindra Integrated Township, a subsidiary of Mahindra Lifespaces, has transferred land within the Mahindra World City, Chennai measuring 15.64 acres on perpetual lease to Ashiana Housing (deal value undisclosed).

• The Delhi government’s current scheme of 20% reduced circle rates for all categories of properties, which was to be in effect till September 30, 2021 was extended till December 31, 2021.

• According to ET Auto, the Maharashtra government has said that any new vehicles purchased or leased from April 2022 onwards would only be EVs.

• Sanofi India has completed the slump sale and transfer of the company’s nutraceuticals business to Universal Nutriscience for a consideration of | 587 crore.

• Saregama India’s Yoodlee Films has announced its first series titled Invisible Woman. The foray in in line with earlier guidance to enter the web series business in FY22.

• According to media reports, IOC has floated an EoI for monetisation of two hydrogen units under National Monetisation Pipeline. The bidder will generate hydrogen for refineries' demand.

• According to ET Auto, bookings for M&M's XUV700 are set to commence from October 7.


*  Today's Highlight

Events: India Nikkei Market Manufacturing PMI, EU CPI YoY, EU Manufacturing PMI, US Personal Spending, US Manufacturing PMI.