MARKET SUMMERY FOR 8 AUG 2022 & LIVE TRADING TIPS FOR 10 AUG 2022

· After an initial hiccup, markets saw sustained buying and marched higher on Monday, August 8th, 2022.

·  In all, 34 of the Nifty50 stocks closed in the green.

·  Investor sentiment was positive as the major Asian and European indices rose on Monday.

Among the Nifty sectoral indices, Metal (+1.2%) and Auto (+0.9%) were the top gainers, whereas PSU Bank (-0.4%) and IT (-0.02%) were the top losers.

Top gainers	change
M&M	1,275 ▲ 39 (+3.2%)
Coal India	215 ▲ 6.5 (+3.1%)
Bajaj Finserv	15,528 ▲ 442 (+2.9%) trending

 

Top losers	change
BPCL	326 ▼ 10 (-3.0%)
SBI	520 ▼10 (-2.0%)
Britannia	3,633 ▼ 55 (-1.4%)

 

 ⭐ Tata Motors to acquire Ford’s Gujarat plant

TATAMOTORS (NSE): 468 ▲ 2.7 (+0.5%)

Electric vehicle subsidiary Tata Motors (EV) and Ford India have signed an agreement to acquire Ford's manufacturing facility in Sanand, Gujarat. The facility is being sold for 725 crore. The deal could be seen as timely as it will add 3,000 units to Tata Motors' total production capacity, which is already close to saturation. 

⭐ BPCL reports big loss

BPCL (NSE): 326 ▼ 10 (-3.0%)

Shares in state-owned Bharat Petroleum Corporation fell nearly 5% on the day. Selling pressure stemmed from a loss of 6,147 crore reported by the refiner for the June quarter. The freeze on retail prices for gasoline and diesel hampered its ability to offset a 90% increase in raw material costs. Revenue increased 54% year over year. Performance was also hurt by a currency loss of 966 crore.

⭐ India’s Q1 GDP set to jump 

According to economists, India's economy is expected to grow between 12.5% ​​and 15% in the first quarter of FY23. Growth will be supported by a strong pickup in consumption and a recovery in the service sector. The growth rate appears high partly due to last year's low base. Meanwhile, economists also said private investment is not yet fully picking up and rising interest rates triggered by monetary tightening could pose a challenge.

⭐ IPO rush: 28 firms get SEBI’s nod

Between April and July 2022, market regulator SEBI approved 28 companies to raise funds totaling 45,000 crore through IPOs. Companies such as FabIndia, Bharat FIH, TVS Supply Chain Solutions and Macleods Pharmaceuticals are among those that have received SEBI approval. Meanwhile, Syrma SGS, an electronic manufacturing services company, will launch its IPO on August 12, 2022. 

⭐ Berkshire Hathaway reports loss

Warren Buffett's Berkshire Hathaway reported a loss of $43.8 billion in the June quarter as share prices of major US stocks plummeted. The loss stems from a $53 billion depreciation of investments. Management said significant supply chain disruptions and higher costs continued as new Covid variants emerged and geopolitical uncertainties escalated. However, it must be noted that many of these portfolio losses are unrealized in nature.

In Focus

Festive sales to drive demand revival

Discretionary products such as electronic goods, apparel and automobiles are expected to be in high demand in the upcoming holiday season from August to December. Industry leaders are reportedly expecting 15-25% higher demand compared to the same period in 2019 (pre-pandemic). The increase in demand should be supported by pent-up demand and improved consumer sentiment. Discretionary spending refers to the money spent on non-essential goods and services, e.g. Recreation, entertainment, etc. It is considered one of the key parameters for assessing the country's economic health. This is because during crisis-like situations like pandemics or economic downturns, discretionary spending shrinks as individuals want to save more for tough days. AC maker Voltas expects positive consumer sentiment and is reportedly targeting over 25% growth in the holiday season compared to 2019. Similarly, Aditya Birla Fashion management said that initial bookings in the wholesale business are strong and the holiday season likely to give further impetus. The clothing retailer posted its highest-ever April-June sales last quarter, with sales growing 39% from pre-Covid levels. The cosmetics and fashion retailer Nykaa is also hoping for strong demand. It's important to note that the holiday season is a crucial time for businesses, as it accounts for 35% to 45% of annual sales for most consumer goods companies.

What is Return on Equity (RoE)?

Return on Equity (RoE) is a measure of a company's financial performance. It is calculated by dividing the company's net income by its equity. The number indicates how effectively the company manages shareholders' funds. The ideal RoE level varies by sector. Before investing, one should compare a particular company's RoE to the average for the corporate sector or its peers.