MarketBuzz
1272: Marketbuzz Podcast With Hormaz Fatakia: Fed to boost Nifty? Nestle, Sobha in focus
Good morning and welcome to CNBC TV18's Market Bus Podcast. I am Horvus Vatakia. Let's start off with things that went on expected lines overnight. The Fed was supposed to keep interest rates unchanged and so they did. But the question was how many times will they cut in the remainder of 2024. Jerome Powell indicated once but left the door open for one more rate cut. So the key takeaway? Interest rates have been unchanged and there is one or possibly two rate cuts coming in the second half of 2024. Krishna Guha of Evercore said that the Fed Chair is keeping the door very much open to a September rate cut provided that the slowdown that the US economy has seen in May is broadly sustained in the next few months. The response from Wall Street largely positive. The S&P 500 in the NASDAQ made new records on Wednesday. The S&P 500 closed above 5400 for the first time. The NASDAQ also gained over a percent and a half led by Gaines in Tesla, Nvidia and Oracle Corp which surged over 13% post a strong quarterly performance. Treasure yields also fell nine basis points overnight. Now will all of this be enough to spur our own markets? Will that be enough to take the nifty out of this 200 to 250 point range that it is locked in? Time will tell. But that has been the week so far for the market. The nifty is stuck in this 23, 200 to 23, 450 range. It made another record high on Wednesday and so for the record keepers, 23, 4, 4, 1 is now the new record high for the nifty. But sticking to the script, the index saw a laid sell-off and gave up most of its gains by the close of trade. The positive, if you would like to call it that, is the fact that the index closed above 23, 300, something that it had failed to do so in the earlier two sessions of the week. Now this makes three levels very key for the nifty in today's trading session. First of course is 23, 400, then Monday's high of 23, 411 and the recent record of 23, 4, 4, 1 that it made yesterday. But chartists also believe that 23, 350, 23, 90 is also a very important zone for the index to surpass and sustain above for a sustained up move on the upside. Now today is also the weekly options expiry of the nifty. So some volatility can't be ruled out on either side. The gift nifty as we speak is indicating a 100 point gap up and is pointing to an open exactly at that 23, 450 level which is the upper band of the range. Now the nifty bank also tried to sustain above that mark of 50,000 on its weekly expiry yesterday, but it failed to do so yet again. But the index did manage to snap a two day losing streak. Now Wednesday's high which was 50,232 was just 20 points away from Monday's high which was 50,252. Now the index needs to close above 50,979 to recover all the losses it made during the Lok Sabha election results day. Now that is still quite a distance away till then the 50,000 level is a very important one until that level is not decisively taken out. The index remains stuck in this range between 49,500 or 49,000 on the downside to 50,000 on the upside. Now there are other reasons why our markets will react as well because industrial production for the month of April stood at 5% compared to the CNBC TV 18 poll of 4.7% while CPI which is the inflation for the month of May stood at 4.75% which was marginally below the CNBC TV 18 poll of 4.9% and compared to 4.83% in April. Most analysts on the street still advise remaining stock specific in this market and there are plenty of stocks that you need to keep an eye on. Now first up is the block deal that may take place in L&T finance today where Bain capital affiliates and BNP Paribah are likely to sell the remaining 3.45% stake in this clean out transaction. The base price is 169 rupees which is almost at par with Wednesday's close. Now at the base price the deal is valued at 1500 crore rupees. The L&T finance was also part of CNBC TV 18's D street chatter yesterday where my colleague Nimesh had highlighted about a potential block deal that might take place in the stock. Now what can be called as a victory for shareholders the board of Nestle India has approved continuing royalty payments to its parent company which is Nestle SA at 4.5% which was the existing rate. So more than 57% of the company shareholders had voted against this resolution to increase that royalty payout to 5.25% of net sales over the next 5 years from the current 4.5%. So the board has had to go back on that decision and continue with this existing rate of 4.5%. Now on to real estate and that has been a buzzing sector for a better part of the last 12 to 18 months. Now prestige estate is planning an IPO of its hospitality unit and now SOVA has decided to raise 2000 crore rupees through a rights issue. Now the company intends to issue 1.21 crore rights shares on a partly paid basis. The rights issue price is 1650 rupees a share which is around 20% discount to yesterday's closing price. Now if you are a shareholder of SOVA you will be entitled to 6 right shares for every 47 shares that you hold as of the record date which has been fixed as the 19th of June. Now the rights issue will open on the 28th of June and close on the 4th of July. Also keep an eye out on Arvind where operations at the Santhage plant which were impacted due to a strike are returning to normalcy but the company here is estimating a potential revenue loss between 180 crore to 200 crore and a reduction in a beta to the tune of 60 to 65 crore rupees. The labor court on the 6th of June had declared this strike at the Santhage plant as illegal. Now what can be a unique agreement of sorts whirlpool has signed a joint marketing agreement with Hindustan Unilever for developing joint marketing programs, product sampling, advertorials and providing advertisement or media for an initial period of 3 years they will be promoting each other's products through their campaigns. Now no cash consideration is involved here just product sampling and media spends will be involved. Now also watch out for some other stocks like Saksoft which acquired 100% stake in augmented labs they will do so for some of 100 crore rupees. Excite industries which has invested another 75 crore in its EV unit, Excite Energy Solutions taking their total investment to well over 2,450 crore and Torret Farmer whose Indrad facility has received a form 483 from the US FDA with five observations. Now away from the markets in some unpleasant news coming from Kuwait a fire broke out in a six-storey building in the Mangalf area in the early hours of Wednesday. Now over 14 Indians aged between 20 to 50 years were killed and more than 50 others were injured in this fire. Most of the Indian victims are said to be from the state of Kerala. An official statement confirmed that Minister of State for External Affairs Kiti Varthan Singh is urgently travelling to Kuwait to oversee relief measures and facilitate the expeditious repatriation of the mortal remains of those who were killed. More updates on that on CNBCTV18.com. But we would not want to end on an unpleasant note so here's something from the world T20 as well. India huffed and puffed but eventually prevailed over the United States in their round robin clash confirming their birth in the superades. However the form of both Virat Kohli and Roj Sharma would worry the team management ahead of some important encounters. More updates on that too on CNBCTV18.com. And that's all for today. We wish you a happy trading day. Stay safe and stay tuned to cnbctv18 and cnbctv18.com. [BLANK_AUDIO]