Jefferies warns of clouded growth outlook for Asian Paints

Indian Markets:

• Nifty 50 Movement: Indices closed below the 17,100 level after hitting days high of 17,205.40 in afternoon trade.
• Investors processed the U.S. Federal Reserve’s recent interest rate hike and statements from Fed Chair Jerome Powell and Treasury Secretary Janet Yellen. 
• The market reacted with heightened volatility, driven in part by the weekly index options on the NSE that were reaching expiration.
• Market showed a mixed trend on the sectoral front in recent trading. The realty, bank, information technology, and PSU bank sectors saw a decline of 0.5-1 percent, while buying activity was observed in metal, FMCG, and power sectors.

Global Markets:

• European shares declined while Asian stocks ended mixed on Thursday, following Wall Streets reaction overnight after the U.S. Federal Reserve hiked rates by another 25 basis points.
• The Swiss National Bank on Thursday morning announced it would raise its benchmark interest rate by 50 basis points, taking it to 1.5%.
• US stocks end sharply lower on Wednesday after the U.S. Federal Reserve delivered a widely expected policy hike. U.S. Federal Reserve Chair Jerome Powell re-stated his commitment to curbing inflation, including the possibility of more interest rate rises.
• Treasury Secretary Janet Yellen said Wednesday that the FDIC was not considering providing blanket insurance for banking deposits. Yellen said the administration was not considering expanding bank deposit guarantees beyond the current limit of $250,000, as per reports.

Stocks in Spotlight:

• Shares of Asian Paints experienced a 1.4 percent decline following a recent analysis by Jefferies, which suggested that any potential tailwind from input price deflation should be viewed as an opportunity to sell the stock. The brokerage firm has warned that the medium-term growth outlook for Asian Paints may be clouded by emerging competition from Grasim, which is set to enter the market within the next 12 months.
• Maruti Suzuki, the leading automaker in India, has announced that it will be raising prices in April 2023, citing increased cost pressures that will be passed on to consumers through the price hike. The move comes amid a broader trend among auto companies, who have been grappling with persistent input cost pressures and have been compelled to raise prices to maintain profitability.
• Fitch Ratings, a leading credit rating agency, has affirmed the Long-Term Foreign-Currency Issuer Default Rating (IDR) of India-based port operator Adani Ports and Special Economic Zone Limited (APSEZ) at ‘BBB-‘ with a ‘stable’ outlook. This move comes after recent allegations of governance issues at the Adani group were made in a Hindenburg report. According to Fitch, the affirmation of APSEZ’s rating reflects the agency’s view that the allegations made in the Hindenburg report are unlikely to have a significant impact on the company’s cost of funding or access to capital at its current rating level

News from the IPO world?

• IndiaFirst Life Insurance IPO gets SEBI nod
• Mobikwik to file for IPO again in next 12-18 months
• SBFC Finance refiles DRHP IPO size reduced from Rs. 1600 crore to 1200 crore

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