For the week ended 30th September, the aggregate market cap of 7 out of the 10 most valuable stocks on the NSE depleted value by Rs116,053 crore as the indices lost about 1.3% in the week. Among big losers, Reliance market cap fell Rs41,706 crore, SBI Rs17,314 crore, ICICI Bank Rs13,807 crore, HDFC Bank Rs13,424 crore, HDFC Ltd Rs10,831, Bajaj Finance Rs10,241 crore and Bharti Airtel Rs8,732 crore. Among weekly gainers, Infosys added Rs20,145 crore, TCS Rs7,977 crore and Hindustan Unilever Rs4,124 crore.
FPIs disappointed in September with net selling of Rs7,624 crore in Indian equities. FPIs were net buyers at the end of 3 weeks but sold over $2.3 billion of equities in last 8 trading sessions. This is a kind of an anti-climax after the $6.44 billion infused by FPIs into Indian equities in August 2022. Between October 2021 and June 2022, FPIs had pulled out $34 billion from Indian equities over 9 months. Clearly, the very hawkish tone of the Fed, BOE and ECB is likely to translate into recession, which has the markets worried.
The sharp fall in Chinese stocks has made them relatively attractive compared to India. For the Sep-22 quarter, MSCI India Index rallied 10% while the MSCI China index fell by 23% in the same period. This is the biggest quarterly outperformance by India since year 2000. China has seen its markets take a hit on the back of stringent COVID restrictions along with weak demand. Since early 2021, Chinese equities have wiped out $5 trillion in value. However, global investors still remain cautious about China despite the fall.
In line with the falling global crude prices, the Indian government has cut its windfall tax rates. The windfall tax on domestically produced crude oil has been cut from Rs10,500/tonne to Rs8,000/tonne. In addition, the government also scrapped export tax on ATF and halved export duties on diesel from Rs10/litre to Rs5/litre. When the windfall tax was first introduced in July, it was pegged at Rs23,250/tonne for domestic crude, but now it is down to a third. However, the tax is being implemented in consultation with industry.
India will raise the price of locally produced gas from old oilfields by 40% to $8.57 per MMBTU (million metric British thermal units). This will be applicable for 6 months but could add to the input costs of gas fired fertilizer manufacturers and power producers. At the same time, the ceiling price for gas from more challenging fields has been hiked from $9.92/MMBTU to $12.46/MMBTU. This is likely to be an incentive for prospecting off-shore gas discoveries. With inflation back at 7%, this could add more price pressure.
The RBI is now encouraging PSU oil refiners to cut down on buying spot dollars. That has been a major reason for the rupee volatility. Instead, the refiners can lean on a special credit line. RBI has made $9 bn available at overseas branches of Indian banks for this purpose. This credit line is only available to IOCL, BPCL and HPCL. The RBI has been trying to defend the rupee by selling dollars, but in the process the RBI forex reserves are down by $110 billion in 2022. This had led to the rupee strengthening late on Friday.
Bharti Airtel’s 5G services were made available from Saturday in 8 Indian cities, including the 4 metros. From here on, Airtel plans to expand its footprint rapidly, completing the total rollout of 5G services across India by March 2024. According to company sources, Airtel will initially offer 5G services at existing 4G prices, but will revise tariffs later. To access the 5G services, users will need 5G enabled phones, although the SIM cards can remain the same. Bharti had acquired spectrum worth Rs43,084 crore at the auctions.
The NTPC group recorded generation of 203.5 BU in H1-FY23; 15.1% higher than the 176.8 BU generated in H1-FY22. This came on the back of higher power demand and quicker generation growth. In the first half of FY23 the overall Plant Load Factor (PLF) of NTPC coal stations was at a record 76.3%. NTPC has a total installed capacity of 70,234 MW. NTPC has diversified into producing energy via hydro, wind, solar as well as Green Hydrogen solutions. It also forayed in fuel cells, e-mobility and Waste-to-Energy solutions.