Reliance industries stock price tumbles as Jefferies reiterate outlook

Indian Markets:

• Nifty 50 Movement: Indices settled below the 16,950 mark after hitting days high of 17,109.45 in early afternoon trade.
• Investor sentiment took a hit as the Finance Bill 2023 was passed by the Lok Sabha with some amendments, resulting in all sectoral indices on the NSE ending in the red. The media, realty, and metal sectors saw the most significant declines.
• The proposed amendment to the Finance Bill includes taxing gains arising from debt mutual funds at the investor’s slab rate, regardless of the investment period. This change eliminates any tax arbitrage across debt instruments, including bank deposits, debt MFs, or life insurance savings products.
• In addition to this, the amended bill has raised the securities transaction tax (STT) on the sale of F&O contracts. The STT has been increased by 23.52% on the sale of options and 25% on the sale of futures contracts. 

Global Markets:

• The Dow Jones Futures index futures were down 274 points, indicating a weak opening in the US stocks today.
• Shares in Europe and Asia declined on Friday, as investors weigh remarks from U.S. Treasury Secretary Janet Yellen, who said federal emergency actions to back up failed regional banks could be used again if necessary.
• The Bank of England raised interest rates by a further quarter of a percentage point on Thursday and said it expects the surge in British inflation to cool faster than before. The BoEs nine rate-setters voted 7-2 in favour of a 25 basis-point increase in Bank Rate to 4.25%.
• Japans core inflation reading fell from its January peak of 4.2% to 3.1% year-on-year in February, government data showed Friday. Overall, nationwide inflation was at 3.3% for the month compared to a year ago, also lower than the January print of 4.3%.
• Wall Street closed higher on Thursday as market participants were reassured by US Treasury Secretary Janet Yellens reassurances that measures will be taken to keep Americans deposits safe.

Stocks in Spotlight:

• Interglobe Aviation, the parent company of Indian airline IndiGo, saw its stock prices fall by 2.4 percent following a report by brokerage firm Jefferies India. The report maintained an “underperform” rating for the airline, citing concerns over medium-term industry capacity addition. Despite this, Jefferies expects the airline to benefit from the recent slump in crude oil prices in the near future.
• Proposed changes to tax gains arising from debt mutual funds have sent shares of asset management companies tumbling. The Indian government has proposed taxing gains at the investor’s slab rate, regardless of the investment period. This move has led to a drop of between 1.56% and 4.77% for companies such as HDFC Asset Management Company, Aditya Birla Sun Life AMC, UTI Asset Management Company, and Nippon Life India Asset Management.
• Jefferies has stated that concerns raised by investors of Reliance Industries about a delay in telecom tariff hike seem overblown. Although it is likely that the hike will be deferred until after the general elections in May 2024, Jefferies believes that once it is implemented, it could rapidly transform the market structure in favor of RIL.

News from the IPO world?

• Jupiter Hospital likely to file for Rs, 1100 crore IPO
• 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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