MarketBuzz
1262: Marketbuzz Podcast With Hormaz Fatakia: Nifty under pressure; Tata Steel, Cummins react to results
Good morning and welcome to CNBC TV, 18's Market Buzz podcast. I am Hormas Patakya, the almost never ending May FNO series finally comes to an end today. And the last few days have been anything but calm for the index. Now what once stood as a 500 point gain for the NFT this series, that has been chopped down to just 130 points and that is good to see the pressure that we have witnessed at higher levels over the last four trading sessions. Now from 23, 110, the NFT is already back to 20 to 700 and with today being expiry, you can brace for some more volatility. Now if the US market handover is anything to go by, there is likely to be more weakness on the NFT as all three benchmarks there ended with sharp cuts overnight. The Asian markets are following their footsteps and are also trading lower. The gift NFT as we speak is also indicating another opening with an 80 to 90 point down tick for our own markets. Now there is a lot of chatter on the street as to whether this is pre-positioning before an election result. Does the street know something that we don't know or is this just traders keeping positions light before a big event. There are views for almost everything but then that's what they are just views. The street though appears to be factoring in the fact that the current government will surely be voted back to power on the 4th of June. Now Nomura conducted a survey of 150 participants and 99.3% of them, let's just say almost all of them believe that the BJP will be voted back to power. Now Nomura also said that any other outcome besides what the street is working with will have a negative implication for the market. Now in two out of the last four trading sessions that the NFT has been struggling, it has had support from the NFT bank which ensured that the losses were kept in check but that too has been facing selling pressure over the last two days and is already down 1200 points from Monday's high of 49, 680. Now almost all index heavyweights HDFC bank, ICICI axis continue to add pressure and almost suddenly from being the stronger of the two, the NFT bank has suddenly become the weaker of the two in comparison with the NFT. Now even an upgrade on India's outlook could not do anything to salvage sentiment but some of these banks will also be in focus today after SNP global ratings revised its outlook on six Indian banks to positive from stable on sovereign action. At the same time they have also revised upward their standalone credit profile of axis bank and ICICI bank by one notch each. Well that's on the index front, now in specific stocks today is yet another day that belongs to block deals and there will be three of them today as well. First up is K-Fintech where general Atlantic is likely to sell a 4.1% stake. This can also be upsized to 6.8%. Now so the base issue is worth 500 crores which if upsized will be worth 833 crores. The floor price is a 4% discount from Wednesday's close and there will be a 60 day lock in period for the seller post this deal. R-Be Infra is the second one where R-Be holding and Deepali Meiskar today together plan to sell around 4% stake. The offer price is set to be between 63 to 72 rupees a share and at the lower end of the price bank the deal is likely to be worth over 1500 crore rupees. R-Be Infra was also part of CNBC TV18's D-Street chatter a couple of days ago where Nimesha had mentioned that the block deal might take place soon. And the last among the block deals is RR Kabul where TPG Asia is planning to sell its entire stake of around 5% around 1700 rupees a share and that deal is likely to be worth 1000 crore. From block deals we move to earnings now and Tata Steel is the big earnings reaction for the day. The numbers were good as India's EBITDA per ton better expectations while losses from Europe were also lower than what was the street working with. The company undertook K-PX during the quarter but that has not led to an increase in debt which remains constant at around 77000 crore so that's another positive for Tata Steel. The company is also declared a 3.5 rupee dividend after the earnings announcement. The other big earnings reaction will be from Cummins India and in line with how its other capital goods pairs have fared Cummins has also absolutely smashed expectations. Revenue was up 20% EBITDA rose 67% and margins also expanded from almost 17% to nearly 24% which is a multi-quarter high. Even the street was working with a 17.8% estimate when it comes to margins. The management said that the new products that they have launched have been received well by customers but they warn of some sluggishness in exports because of the geopolitical uncertainties. The management will hold an earnings call at 10 o'clock this morning so we'll get to know whether these numbers are sustainable or not. Tata also reported results late last evening and mentioned that demand conditions remain sluggish during the quarter. Numbers were mostly flat compared to last year but it said that the e-commerce business saw significant growth compared to last year. It continues to bet on premiumization and is optimistic of a demand revival in the coming quarters. There will also be earnings reactions from stocks like GMR, airports, NoCil, Medhani, GR Infra. All of them reported results after marketers and will be reacting to the same. And Apollo hospitals is possibly the last nifty stock to report results today along with the likes of Gateway District Parks, Moothed Finance and other broader market names. That's all for today. We wish you a happy expiry day of trade and for the sharpest market insights. Stay tuned to CNVCTV18 and CNVCTV18.com [MUSIC] [BLANK_AUDIO]