Pre Market Updates for 14 July 2022

SGX Nifty -65 pts (15926) from last trade 15991 ,  

Nikkei +2 pts , 

Hangseng +20 pts , 

Dow -208.54 pts ,Nsdq -17.15 pts, S&P 

-17.02 pts, Bovespa -390 pts , Ftse -53 pts , Dax -149 pts , Cac -43 pts , Crude @ $95.82 brl (-0.48), Brent @ $98.28 brl (-0.29) , Gold @ 1726.00 (-9.60), Silver @ $19.05 (-0.14), Euro @ $1.0022, JPY @ $137.92, INR @ 79.655 

Today's Corporate Action

14th July Ex Date

ASHOKLEY

Dividend - Rs. - 1.0000

ATUL

Dividend - Rs. - 25.0000

BHARATFORG

Final Dividend - Rs. - 5.5000

BOSCHLTD

Final Dividend - Rs. - 110.0000

BOSCHLTD

Special Dividend - Rs. - 100.0000

INDIANHUME

Dividend - Rs. - 2.0000

M&M

Dividend - Rs. - 11.5500

NEULANDLAB

Final Dividend - Rs. - 5.0000

PEL

Final Dividend - Rs. - 33.0000

POWERINDIA

Final Dividend - Rs. - 3.0000

REDINGTON

Final Dividend - Rs. - 6.6000

SINCLAIR

Final Dividend - Rs. - 1.0000

ULTRAMAR

Dividend - Rs. - 5.0000

ZYDUSWELL

Final Dividend - Rs. - 5.0000

Today's Key Results/Board Meetings

14-Jul-22

ACC

Quarterly Results 

ANGELONE

Interim Dividend;Quarterly Results

LTI

Quarterly Results 

TATAELXSI

Audited Results 

Stock under F&O ban on NSE

14-Jul-22

1DELTACORP

US Markets in Detail...

SGX: 15,910 (-63) (-0.39%)

Provisional Cash Rs. In Crs. (13th July) 

FIIs: -2,840 (5,093 – 7,933)

DIIs: 1,799 (6,218 – 4,418)

*Today’s major corporate earnings: *

ACC, ANGELONE, BBTC, GTPL, LTI, SHAKTIPUMP, TATAELXSI, TATASTLLP, etc

Today: 

Listing of Bonus Equity Shares of Ratnamani Metals & Tubes Ltd.

2,33,64,000 Bonus Equity of Rs. 2/- each allotted on July 05, 2022.

Listing of Bonus Equity Shares of Swasti Vinayaka Art And Heritage Corporation Ltd

5,00,00,000 Bonus Equity of Re. 1/- each allotted on July 06, 2022

Migration of Equity Shares of Active Clothing Co Limited from BSE SME Platform to BSE Mainboard Platform

Sensex: 53,514 (-372) (-0.69%)

Nifty: 15,967 (-92) (-0.57%)

BankNifty: 34,828 (-304) (-0.87%)

NiftyIT: 26,950 (-114) (-0.42%)

MIDCAP: 22,754: +73: +0.32%

Dow: 30,773 (-209) (-0.67%)

S&P: 3,802 (-17) (-0.45%)

Nas: 11,268 (-17) (-0.15%)

Brazil: 97,881 (-390) (-0.40%)

Ftse: 7,156 (-53) (-0.74%)

Dax: 12,756 (-149) (-1.16%)

Cac: 6,000 (-44) (-0.73%)

MOEX: 2,074 (-60) (-2.82%) 

WTI Oil: $96.3: +0.48%

Brnt: $99.64: +0.15%

Gold: $1,736: +11: +0.62% 

Silver: $19.19: +1.24%

Copper: $332: +3: +1.05%

Copper (LME): $7,354 (-231) (-3.04%)

Alluminum (LME): $2,360 (-20) (-0.82%)

Zinc (LM): $3,016 (-26) (-0.85%)

Tin (LME): $25,574 (-689) (-2.62%)

Eur-$: 1.0059

GBP-$: 1.1892

Jpy-$: 137.42

Re: 79.6350: +0.04%

USD = RUB: 60.4049 (-2.18%)

US10yr: 2.93%

GIND10YR: 7.337 (-0.73%)

$ Index: 108.0180 (-0.05%)

US Vix: 26.82 (-1.72%)

India Vix: 18.52 (-0.16%)

BalticDry: 2,013 (-68) (-3.27%)

ADR/GDR

Cogni (-0.17%)

Infy (-0.55%)

Wit (-0.20%)

IciciBk (-1.06%)

HdfcBk (-2.42%)

DrRdy: +1.24%

TataMo (-1.88%)

TatSt (-0.44%)

Axis: +0.59%

SBI (-0.16%)

RIGD (-1.89%)

INDA (-1.10%) (IShares MSCI INDIA ETF)

INDY (-1.23%) (IShares MSCI INDIA 50 ETF)

EPI (-0.77%) (Wisdom Tree India Earning)

PIN (-0.35%) (Invesco India Etf)

Stock futures slipped Wednesday night as traders look ahead to earnings from major U.S. banks.

Dow Jones Industrial Average futures shed 117 points, or 0.38%. S&P 500 and Nasdaq 100 futures were down 0.41% and 0.47%, respectively.

U.S. stocks end lower for 4th straight day as CPI data shows inflation at 41-year high of 9.1%, driven by an 11.2% monthly spike in gasoline prices. .: Hotter-than-expected inflation raises the risk of steeper rate hikes

 U.S. stocks closed modestly lower on Wednesday after investors digested hotter-than-expected U.S. inflation data, which fueled fears that the Federal Reserve could raise key interest rates by as much as 100 basis points later this month.

While all three major U.S. equity indexes bounced off lows reached early in the day (Dow tumbled 466 points in the morning), and occasionally edged into positive territory throughout the session, they were all red by the closing bell. At one point, the Nasdaq and S&P fell more than 2% and 1.5%, respectively.

Amid unnerving swings, the S&P 500 failed to hold gains after reversing a 1.6% slide. Also weighing on sentiment were hawkish signals from Fed Bank of Atlanta President Raphael Bostic, who said “everything is in play” to combat price pressures. Swap markets shifted to price in a full-point hike as more likely than a 75-basis-point increase in July. The Dow and S&P 500 have fallen for four straight days, while the Nasdaq marked its third straight loss.

“There’s no spinning this, other than the Fed has to get more aggressive near term and crush demand. That cements a recession now,” said Liz Ann Sonders of Charles Schwab. “I think a recession is an inevitability.”

Treasury two-year yields, which are more sensitive to imminent Fed moves, climbed. The euro snapped back after briefly falling below $1, while the loonie gained as the Bank of Canada raised rates by a 100 basis points. Bitcoin rose amid a revival of its inflation-hedge appeal.

Weekly jobless claims and the June producer price index report, which measures prices paid to producers of goods and services, will also be released Thursday. Both reports will give further insight into the economy.

Volume on U.S. exchanges was 10.66 billion shares, compared with the 12.56 billion average over the last 20 trading days.

What drove markets

Inflation, in the shape of the June consumer-price index report, was the focus for traders on Wednesday.

Soaring gasoline prices in June drove the rate of U.S. inflation to 9.1%, , coming in even higher than May’s 8.6% reading, a nearly 41-year peak (since 1981). Economists surveyed by Dow Jones had anticipated an 8.8% print. The CPI jumped 1.3% last month to mark the third time in the last four months it’s topped 1%. Economists polled by The Wall Street Journal had forecast a 1.1% advance.

Core CPI, which excludes food and energy prices, came in at 5.9% and above the 5.7% estimate.

We continue to see new record highs for inflation and it will weigh heavily on the markets. We saw last month with CPI overshooting expectations, June ended up being really troubling for risk assets. And so we believe investors are increasingly concerned of even more aggressive Fed rate hikes and therefore the likelihood of exacerbating recessionary fears. 

The biggest surge in US consumer prices since 1981 showed that an inflation peak may still be out of reach. The Fed will likely resort to hawkish rhetoric and further front-loading of tightening as it fights to maintain its credibility, according to Federated Hermes’ Silvia Dall’Angelo.

After the CPI data was released, traders of Fed funds futures tied to the Fed’s policy rate are now pricing in a higher than 80% probability of a full percentage-point rate rise at the meeting this month, up from 7.6% on Tuesday, according to the CME FedWatch Tool.

Last month, the Fed raised its benchmark interest rate three-quarters of a percentage point to a range of 1.5%-1.75% in its most aggressive hike since 1994.

“The core is chugging along at a frightening clip,” said Michael Schumacher at Wells Fargo.

Fed funds futures are now pricing in an 81 basis-point rate hike for July. That would indicate that some in the market expect a rate hike of more than 75 basis points, and 100 could happen, he added.

“With core running this strong, the Fed can’t ignore that. This is a bad number,” he said.

Wednesday’s hot CPI reading also prompted questions over whether inflation has in fact reached its peak. Headline CPI was up 1.3% and core CPI rose 0.7% on a monthly basis, compared with estimates of 1.1% and 0.5%, respectively. Monthly rental costs climbed 0.8% in June, the biggest increase since April 1986.

At the same time, crude oil, commodities prices and housing prices have come down in recent weeks, a signal that rising prices may have hit a wall, said Jeff Kilburg, chief investment officer and portfolio manager of Sanctuary Wealth.

“Big inflation, in my opinion, has happened,” he said. “That’s articulated in the June CPI data which can arguably be viewed as a lagging indicator. We’ve seen significant repricing across asset classes and sectors and when you see that repricing of sectors in our economy like housing and autos, that really has to be recognized and appreciated.”

President Joe Biden on Wednesday said in a statement that while a “headline inflation reading is unacceptably high, it is also out-of-date.” “Today’s data does not reflect the full impact of nearly 30 days of decreases in gas prices, that have reduced the price at the pump by about 40 cents since mid-June,” Biden said.

The International Monetary Fund on Tuesday warned that a surge in inflation poses “systemic risks” to the U.S. economy, a concern not lost on the Federal Reserve as it seeks to damp rising prices by sharply raising borrowing costs. The Fed’s tighter policy trajectory has removed liquidity from the market and helped pressure equity valuations.

However, Andrew Slimmon, an equity portfolio manager at Morgan Stanley Investment Management, argued that there’s a good chance that inflation has already peaked.

“There’re just too many inputs that are coming down…,” said Slimmon in an interview on Wednesday. “And this is one of the reasons why I think, for the equity market for the year, we’re in the range. I’m not saying the market’s going to take off from here, but I think we’re in the range of the low for the year. I think the second half of the year is going to be far better than the first half. “

“If you look at the history of when we’ve had these inflation spikes, stocks tend to bottom when the market believes that inflation has topped out.”

Slimmon said he is encouraged by Wednesday’s market moves, but a potential negative for stocks could come if inflation numbers fail to come down as swiftly as expected.

Meanwhile, the U.S. corporate earnings season kicks into gear on Thursday, and investors will be watching results for the second quarter, and most important, the outlook for the rest of the year.

Based on these continued high prices in energy, the supply-chain bottlenecks and corporate earnings are something that investors are going to be hyper focused on.

Stocks also need to see earnings are not as bad as consensus strategists’ bearish predictions, according to Slimmon.

“This is purely fact, the consensus estimate for the year has gone up, not down,” said Slimmon. “Companies have actually done better than what is expected and that number has not come down. I’m not saying it’s going to continue to go higher, but what it points to is that companies are doing better than what Wall Street expects.”

Investors should continue to consider investments that can help protect against the impact of inflation. At the same time, “we think that high volatility is going to continue to characterize July markets. Thus investors should also consider alternative investments that are designed to cushion portfolios.

“The June CPI print is ugly across the board,” wrote Krishna Guha, vice chairman at Evercore ISI. “This is bad news for risk assets as it increases the likelihood that the Fed will keep raising rates rapidly and end up overshooting by enough to push the economy into recession.”

Rising recession fears

Fears of a recession have climbed as inflation surges. Bank of America economists said Wednesday they are forecasting a mild recession later this year as real GDP growth declines and anticipate that the unemployment rate will jump to 4.6% in 2023.

During the first quarter, GDP declined by 1.5%. It is expected to fall 1.2% in the second quester, according to the latest estimates from the Atlanta Fed’s GDPNow tracker. By definition, two consecutive quarters of negative GDP is often considered a recession.

Meanwhile, the Fed’s “Beige Book” report released Wednesday found higher fears of inflation and a potential recession.

It could be the case that we’re in a recession, but a very mild one.

That’s likely also the case if the economy is heading into a recession since consumers still have excess cash as a cushion. Whether that recession is enough to bring inflation down to the Fed’s target of 2% will remain in focus, he said.

Along with negative GDP, the cost of borrowing continues to rise. At the same time, job growth remains strong with the latest data showing a 372,000 increase in nonfarm payrolls last month, according to the Bureau of Labor Statistics. Real wage growth is rising, albeit at a slower pace than inflation, which could spell further trouble for the economy.

“We really need to restore price stability to get inflation back down to 2%, because without that we’re not going to be able to have a sustained period of maximum employment where the benefits are spread very widely and where people’s wages aren’t being eaten up by inflation,” wrote Wolfe Research’s Chris Senyek.

Bank of America Corp. economists forecast a “mild recession this year” in the US, saying services spending is slowing and hot inflation is spurring consumers to pull back. They join Wells Fargo Investment Institute and Nomura Holdings Inc. in expecting a contraction in 2022. Deutsche Bank AG sees one starting in mid-2023.

The multi-year market mantra of TINA -- there is no alternative to equities -- is facing a major threat as bond yields are looking more attractive. The percentage of S&P 500 members with a dividend yield higher than the 10-year US Treasury rate has fallen to the lowest since 2007. Payouts are under pressure as companies grapple with fears of recession, historically high inflation and supply constraints.

Investors fixated on the looming risk of recession are about to get a crucial read on a question that’s been burning a hole through markets for months: whether bank earnings will show cracks forming in the economy. Net interest income for the six largest US lenders is expected to rise by roughly 15%, while at the same time mortgage and investment-banking revenue is projected to decline, according to data compiled by Bloomberg.

Companies in focus

• Shares of Delta Air Lines Inc. dropped 1.5% Wednesday, after the air carrier reported second-quarter profit that fell well short of expectations but revenue that rose above prepandemic levels to beat forecasts. Net income of $735 million, or $1.15 a share, was down from $1.44 billion, or $2.21 a share, in the same period in 2019. 

• Shares of IronSource Ltd. jumped 50% Wednesday after the business app company agreed to be acquired by Unity Software Inc. in an all-stock deal valued at $4.4 billion. Unity stock fell about 3.8%.

• Polestar Automotive Holding UK PLC shares went down 1.9% after the Swedish electric car company backed its full-year guidance for deliveries of 50,000 cars, as the company offered an update on its year-to-date performance.

• Twitter Inc jumped 7.9% after Hindenburg Research said it had taken a significant long position in company's stock.

Japan’s NIKKEI 225 Index rose 0.5%, while the Shanghai Composite gained 0.1%. 

European stocks closed lower Wednesday as investors reacted to the latest inflation data from the United States.

European stocks sunk, with the STOXX Europe 600 Index losing 1% and London’s FTSE 100 Index declining 0.7%.

Other data out earlier on Wednesday showed the U.K.’s economy expanded unexpectedly in May with output growing by 0.5%, according to the Office for National Statistics. A Reuters poll of economists had anticipated zero growth in May from April.

What to watch this week:

• # Earnings due from JPMorgan, Morgan Stanley, Citigroup, Wells Fargo

• # US PPI, jobless claims, Thursday

• # China GDP, Friday

• # US business inventories, industrial production, University of Michigan consumer sentiment, Empire manufacturing, retail sales, Friday

• # G-20 finance ministers, central bankers meet in Bali, from Friday

• # Atlanta Fed President Raphael Bostic speaks, Friday

Currencies

• # The Bloomberg Dollar Spot Index fell 0.2%

• # The euro rose 0.2% to $1.0060

• # The British pound was little changed at $1.1895

• # The Japanese yen fell 0.3% to 137.32 per dollar

Bonds

• # The yield on 10-year Treasuries declined six basis points to 2.91%

• # Germany’s 10-year yield advanced one basis point to 1.15%

• # Britain’s 10-year yield declined one basis point to 2.06%

Commodities

• # West Texas Intermediate crude was little changed

• # Gold futures rose 0.4% to $1,731.10 an ounce

India Daybook – Stocks in News

JSW Energy: Subsidiary gets order for 300 MW wind capacity from Solar Energy. (Positive) 

Infosys: Company to acquire Base Life Science for up to 110 million Euros. (Positive)

Tata Power’s: Subsidiary TP Saurya receives order to set up 600 MW power project in Karnataka. (Positive)

Vedanta/Hind Zinc: Hindustan Zinc To pay ₹21 per share dividend (Positive)

Mindtree: Revenue `3121.1cr vs `2897.4cr qoq, PAT `471.6cr vs `473.1cr qoq (Positive)

Eureka Forbes: Lunolux Acquired 8.70% Stake In Co From Shapoorji Pallonji. (Positive)

NHPC: Ministry of Power has accorded investment approval for pre-investment activities for Sawalkot HE Project. (Positive)

Balaji Tele: Abhishek Kumar joins Balaji Telefilms Ltd. as the Group CEO. (Positive)

Sanofi: Board to consider One-time Special Interim Dividend on 26 July (Positive)

Jubilant Pharmova: Entered in an agreement with Standard Chartered Bank for a five year loan facility for repayment of existing term loan and bonds aggregating $350 million. (Positive)

Greaves Cotton: Retail arm started its multi-brand EV retail store in Thiruvananthapuram. (Positive)

Midcap PSU Banks: Government plans to start next round of public sector bank mergers. (Positive)

Duroply Industries: Total 26 investors including Porinju Veliyath, and Ashish Chugh will take stake in the company (Positive)

Dabur India to acquire balance 24% stake in JV Asian Consumer for 600 million Bangladeshi taka (Positive)

Rites: HDFC Mutual Fund today sold 50.4 lk shares of RITES (Neutral)

IndiGo: Company is addressing remuneration-related issues as its business recovers from the pandemic. (Neutral)

Axis Bank: Rakesh Makhija reappointed Non- Executive (Part-time) Chairman of the Bank, upto October 26, 2023 (Neutral)

Two wheelers: Entry level automobile sales under pressure in Q1: SIAM

Tata Metaliks: Net profit down 98.71% at Rs 1.22 cr Vs Rs 94.72 cr.

Balkrishna Papers Fire broke out in Coal Feeding Hopper in Power Plant in Maharashtra.

Economic Calendar, Thursday, July 14th 2022

🇯🇵 Japan : Foreign Investments in Japanese Stocks, Foreign Bonds Buying, Capacity Utilization (MoM) (May), Industrial Production (MoM) (May)

🇸🇬 Singapore : GDP (YoY) (Q2), GDP (QoQ) (Q2)

🇨🇳 China : FDI

🇪🇺 Euro : German WPI (YoY) (Jun), German WPI (MoM) (Jun), German Current Account Balance n.s.a (May)

🇬🇧 Great Britain : RICS House Price Balance (Jun), BOE Credit Conditions Survey

🇮🇳 India : WPI Manufacturing Inflation (YoY) (Jun), WPI Food (YoY) (Jun), WPI Fuel (YoY) (Jun), WPI Inflation (YoY) (Jun), CPI (YoY) (Jun)

🇺🇸 USA : Continuing Jobless Claims, Initial Jobless Claims, Jobless Claims 4-Week Avg., PPI (YoY) (Jun), Core PPI (MoM) (Jun), Core PPI (YoY) (Jun), PPI (MoM) (Jun), Natural Gas Storage, 4-Week Bill Auction, 8-Week Bill Auction

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