June 10, 2022

Friday Fire Sale

Tale Of The Tape

Happy weekend everyone. Markets snapped their 3-week gaining streak. 📉

Nifty and Sensex were down big today after a sharp selloff in US stocks. Midcaps (-0.9%) and Smallcaps (-1.3%) witnessed lesser damage. Nearly three stocks were down for every one gainer. 👎

Not a single sector closed in the green. NBFC (-2.4%) and IT (-2.1%) got beat up the most. 🤕

Bajaj Auto (-0.2%) will consider the proposal of a share buyback on June 14. Separately, they opened a new EV plant at Pune. 🛵

IIFL Finance jumped 11% after Abu Dhabi Investment Authority picked up a 20% stake in its housing finance business. 💰

Welspun Enterprises (+8%) will sell six highway projects to global investment firm Actis for Rs 6,000 cr. 💸

Aurobindo Pharma (+1%) settled a patent dispute with US-based Teva Pharmaceuticals. 🤝

Oriental Aromatics (+15%) received the green light from the Environment Ministry to set up a new plant. 🏭

Cryptos continued to grind lower. Bitcoin and Ethereum were down 2%. Cardano slipped 5%. 🔻

Here are the closing prints:

Nifty	16,201	-1.7%
Sensex	54,303	-1.8%
Bank Nifty	34,483	-1.7%

Markets Get Dumped!

It was a sea of red across the board. Nifty and Sensex tumbled ~2% intraday as global macros continued to add pressure.😓

What’s the matter bro? Rising inflation is one of the biggest concerns for stocks right now. Earlier this week, the RBI Monetary Policy Committee (MPC) upped its FY23 inflation forecast to 6.7% from 5.7% earlier. Investors fear that soaring inflation may force the central bank to hike interest rates even more, which is a huge negative. 🚨

As we all know, the Russia-Ukraine tensions sent commodity prices through the roof. Oil, natural gas, and metal prices hit multi-year highs following the invasion. Concerns over the prolonged war in Europe and its impact on inflation left investors edgy. A weak rupee, worsening GOI finances, and persistent FII selling have only added matters worse. 🤦

What next? Most experts are bullish over the long term, but warn investors to be extremely selective. Sectors like Banks, Autos, and FMCG may gain big time from the pickup in economic activity and consumer spending, according to Sorbh Gupta, Fund Manager, at Quantum AMC. ✌️

Time For A Change?

Maruti Suzuki is all set to go through an image makeover. India’s largest carmaker aims to become the #1 SUV player in the coming 12 to 18 months! 🏆

Maruti is known as the common man’s car brand. They control over 2/3rd of the entry-level car market in India, which is insane. But, its largest customer base was hit the hardest by Covid. Supply bottlenecks and rising fuel prices made owning your first car even more expensive. 💸

Also, the trend of owning hatchbacks has been declining. Fun fact – The share of small cars in the total passenger vehicle market is down from 65% in FY12 to 45% in FY22. On the flip side, India’s love for larger SUVs has increased multifold. SUV sales have +2x in the past five years and are estimated to make up 50% of the total market by FY26. 📊

Maruti has identified the huge business potential and aims to ramp up its SUV portfolio. The all-new Brezza will be launched later this year. Going forward, Maruti says it will double its SUV capacity to 3 lakh units in the current financial year. 💪

Maruti has built a solid brand with a robust pan-India distribution network over the years. But, that would not guarantee it an instant success. The top three players – Hyundai Motor, Tata Motors, and M&M control over 50% of the SUV market. Let’s see how this goes. 🔥

Movers And Shakers

Here’s a look at this week’s top Nifty 500 movers. Mangalore Refinery & Petrochemicals took the pole position after rallying +40%. 🥇 PNB Housing Finance gained the most in a single week since May 2021. RattanIndia Enterprises (-15%) witnessed profit booking. Medplus Health Services (-14%) closed down for a third consecutive week. 📉 Check out their charts below: