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Global stock markets ended lower on Friday as investors grappled with fears of rising inflation and a surge in coronavirus cases while the dollar edged higher after upbeat U.S. retail sales data reaffirmed an economy in strong recovery mode.

The Commerce Department said retail sales rose 0.6% in June, contrary to an expected decline, adding weight to those who say inflation will run faster than the Federal Reserve forecasts and force interest rates to rise sooner than it projects.

Yet bond yields pared most initial gains, with the benchmark 10-year U.S. Treasury note trading at 1.2987%, or a scant 0.2 basis points higher on the day. The Fed's dovish outlook outweighed fears of a prolonged inflation spike.

Equity markets declined as investors turned risk-averse, with defensive stocks gaining both on Wall Street and in Europe.

MSCI's all-country world index, a gauge of global shares, closed down 0.62% at 719.17. The index scaled a record peak earlier in the week but lost 0.61% by the week's end.

In Europe, the FTSEurofirst 300 index fell 0.38% to 1,754.64. European defensive shares rose, with real estate, utilities, and healthcare up between 0.5% and 1% as worries about the coronavirus mounted.

England's coronavirus crisis could return again surprisingly quickly, the British government's chief medical adviser said, before lifting all pandemic-led restrictions on Monday despite rising COVID-19 cases.

In California, Los Angeles county will reimpose a mask mandate this weekend, the latest sign of public health officials struggling with rising cases of the Delta variant.

The slide on Wall Street is surprising given earnings from the companies that have reported second-quarter results so far have surpassed estimates by 22.1%, Credit Suisse said in a note.

Removing year-ago comparisons show earnings are up decently from levels two years earlier and inflation is likely running about 2.6%, once last year's low baseline is removed, said Jason Pride, chief investment officer for private wealth at Glenmede in Philadelphia.

"That should ultimately be acceptable to the (equity) market and permit an ongoing upward grind," Pride said. "My one hesitation is equity market valuations are high."

Economically sensitive industrials, energy, financials, consumer discretionary, and materials are projected to more than double earnings, while so-called big tech and non-cyclicals are expected to grow 36% and 10%, respectively, Credit Suisse said.

The Dow Jones Industrial Average closed down 0.86%, the S&P 500 slid 0.75%, and the Nasdaq Composite lost 0.80%.

For the week, the Dow lost 0.53%, the S&P 500 fell 0.97% and the Nasdaq shed 1.87%. The S&P 500 real estate index rose to a record high on Friday.

Gold prices dipped as a stronger dollar dulled bullion's appeal, while bond yields were subdued after Fed Chair Jerome Powell this week pledged "powerful support" to ensure the U.S. economic recovery does not falter.

Mark Haefele, chief investment officer at UBS Global Wealth Management, adviser to many of the world's super-rich, said he expected rates to move higher as the recovery fully takes hold.

"We believe the downward trend in yields will reverse as confidence in the economic recovery mounts. However, we see a rebound in 10-year yields to 2% by year-end as consistent with continued rally inequities."

In Europe, Germany's 10-year yield fell to a new three-month low in cautious trade ahead of next week's European Central Bank meeting.

Oil ended the week lower, sapped in volatile trade by expectations of growing supplies just when a rise in coronavirus cases could lead to lockdown restrictions and depress demand.

Brent crude settled down 12 cents at $73.59 a barrel. U.S. crude rose 16 cents to end at $71.81 a barrel.

U.S. gold futures settled 0.8% lower at $1,815 an ounce.

In foreign exchange, major currencies were little changed on the day but the dollar headed for its best weekly gain in about a month. The dollar index, which tracks the greenback versus a basket of six currencies, rose 0.10% to 92.675.

The euro slid 0.02% at $1.1810, while the yen rose 0.17% at $110.0500.Overnight in Asia, MSCI's broadest index of Asia-Pacific shares outside Japan lost 0.4%, weighed down by a 1.1% drop in China's blue-chip index and a 0.8% fall for Taiwanese shares.

The Asian weakness was in large part driven by lackluster earnings from TSMC, Asia's biggest firm by market capitalization outside China, which saw its shares fall 4.1%.

Article Source:- Moneycontrol

Angel Broking Ltd | The share price has surged 186 percent to 873.90 on July 1, 2021, from its issue price of Rs 306. It was listed on exchanges on October 5, 2020, with an issue size of Rs 600 crore.

Angel Broking's share price hit record high on July 16 surging over 13 percent intraday after the company declared its Q1 numbers.

Angel Broking reported 19 percent increase in consolidated net profit at Rs 121.37 crore in Q1 FY22 over Q4 FY21.

The stock broker's consolidated net profit jumped 156.6 percent while revenue from operations jumped 94 percent in Q1 FY22 over Q1 FY21. Total income stood at Rs 474.5 crore in Q1 FY22 as against Rs 418.9 crore in Q4 FY21, a growth of 13 percent QoQ.

Its income growth was aided by strong growth in client base and high client activity.

Profit before tax increased by nearly 14 percent QoQ and 154.7 percent YoY to Rs 162.16 crore in Q1 FY22.

The stock was trading at Rs 1,194.45, up Rs 132.40, or 12.47 percent at 11:24 hours. It has touched a 52-week high of Rs 1,218.40. It has touched an intraday high of Rs 1,218.40 and an intraday low of Rs 1,109.15.

The company board declared an interim dividend of Rs 5.15 per share with a record date of July 26, 2021.

The company's board consented to submit an application to Sebi to obtain approval for acting as a sponsor to mutual fund and to constitute a committee. It will oversee the activities in relation to the proposal of setting up of mutual fund business by the company.The board, in its meeting held on July 15 also approved the change of name of the company from 'Angel Broking Limited' to 'Angel One Limited' or Angel One Fintech Limited' or any other name as may be approved by the Central Registration Center of Ministry of Corporate Affairs.

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Titan Company share price traded in the red on July 15 after ace investor Rakesh Jhunjhunwala pared his stake in the Tata Group company in the June 2021 quarter, the third consecutive quarter that he trimmed his holding.

Jhunjhunwala cut reduced his stake in Titan, one of the best-known stocks in his portfolio, by 0.25 percent in the June 2021 quarter.

He and his wife together held a 5.5 percent stake in the jewelry-to-eyewear maker as of September 2020, which they reduced to 5.3 percent in December 2020, and then further cut it to 5.1 percent in March 2021. Now, after the June 2021 quarter, their stake in the company stands at 4.8 percent, according to BSE data.

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As per the June 2021 shareholding pattern, Jhunjhunwala alone reduced his stake in Titan to 3.72 percent from 3.97 percent in March 2021 but his wife's stake remained unchanged at 1.09 percent.

As of June 2021, their total shareholding in the company was worth Rs 7,294.8 crore, the highest among the stocks that are known in their portfolio.

The stock was trading at Rs 1,701.25, down Rs 9.85, or 0.58 percent at 0933 hours. It has touched an intraday high of Rs 1,708.90 and an intraday low of Rs 1,693.65.

Article Source: Moneycontrol

The Rs 9,375-crore IPO of Zomato, one of the leading food services platforms in India, has received a 'subscribe' rating from many analysts given the investors' appetite and interest in the listing of a new business, unique status in the food delivery space, huge growth potential in tier-II and tier-III cities and a strong network of restaurants.

Zomato will be the first food delivery aggregator startup to get listed on the bourses.

While assigning a subscribe rating to the issue, all the analysts Moneycontrol spoke to said the valuations look expensive compared to global peers. The company's loss-making status is a concern, they added.

Zomato opens its biggest public offer in last sixteen months, after SBI Card, for subscription on July 14, with a price band at Rs 72-76 per equity share.

It has already mobilised Rs 4,196.51 crore from 186 anchor investors on July 13, a day before the issue opening. And, the rest of the money will be raised in the next three days till July 16, via public offer.

The offer comprises a fresh issue of Rs 9,000 crore and an offer for sale of Rs 375 crore by Info Edge, the largest shareholder in the company. The net proceeds from the fresh issue will be utilized towards funding organic and inorganic growth initiatives (Rs 6,750 crore); and general corporate purposes.

"The IPO is valued at price-to-sales of 28.6-29.9 times FY21 revenues of Rs 1,993 crore, which is at a premium to other comparable global food delivery companies. While the Zomato IPO may seem expensive based on FY21 numbers, we believe that FY21 was an aberration as business was impacted significantly due to the first Covid wave and the ensuing lockdowns," said Jyoti Roy, DVP- Equity Strategist at Angel Broking.

Post a 23.5 percent de-growth in revenues in FY21 due to the Covid-19 pandemic, growth is expected to pick up sharply from FY22, Roy feels. Moreover, Zomato has been able to reduce its losses in FY21 despite a de-growth in the topline.

Jyoti Roy expects losses to reduce further over the next couple of years due to a rebound in growth and improving unit economics. "Given the strong delivery network, high barriers to entry, expected turnaround, and significant growth opportunities in tier-II and tier-III cities, we believe that Zomato will command a premium to global peers and hence have a 'subscribe' recommendation on the IPO," he said.

Zomato reported a consolidated loss for the financial year ended March FY21 at Rs 816.43 crore compared to a loss of Rs 2,385.6 crore in FY20. Revenue from operations in the same period declined to Rs 1,993.78 crore from Rs 2,604.7 crore largely due to the impact of Covid-19.

Varun Singh and Kuber Chauhan of IDBI Capital also expect the company's losses to come down, going forward, driven by higher delivery charges (customers must pay for convenience) and reduction in competitive intensity (induced by consolidation).

"Valuation looks expensive from the near-term point of view (6 times FY21 gross order value versus 1-3 times multiple for global competitors), but given the non-linear growth opportunity, we believe it's better to stay invested in such companies," said the brokerage which recommended subscribe.

Analysts largely feel the traditional valuations metrics like price-to-earnings will not be the right measures to value such companies.

"A better way to value such high growth companies will be on Price to sales basis and compared with other global food delivery companies which are expected to witness similar growth trajectory over the next few years like DoorDash, Deliver Hero, etc," said Jyoti Roy.

As per Gaurav Garg of CapitalVia Global Research, customer acquisition costs, valuation, revenue, and competition from other players (in this example, Amazon and Swiggy) are a few aspects to consider for a tech-based firm.

Zomato is a technology-first organization leveraging artificial intelligence, machine learning, and deep data science to continuously drive innovations on its platform for its customers, delivery partners, and restaurant partners. The company runs an integrated product, design, engineering, and data science team without boundaries to boost collaboration and speed of output.

Zomato, having a strong brand name and recall across large and small Indian cities, has two core B2C offerings, Food delivery and Dining-out in addition to the B2B offering Hyper pure. Another important part of the business is Zomato Pro, which is the customer loyalty program and encompasses both food delivery and dining-out.

As of March 31, 2021, Zomato was present in 525 cities in India, with 3,89,932 active restaurant listings along with a presence in 23 countries outside India.

Listing Gains

Few analysts are recommending the issue only for listing gains given its first-mover advantage in the food delivery space, and tremendous enthusiasm among investors about this IPO.

"Zomato with first-mover advantage is placed in a sweet spot as the online food delivery market is at the cusp of evolution. It enjoys a couple of moats and with the economics of scale started playing out, the losses have reduced substantially. However, predicting the growth trajectory at this juncture is a little tricky for the next few years," said Sneha Poddar of Motilal Oswal.

She further said, "Though, valuing such early-stage businesses on plain vanilla financial matrix might not give the right picture and may look distorted. Investors with a high-risk appetite can subscribe for listing gains given fancy for unique and first-of-its-kind listing in the food delivery business."

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As it is the first start-up in the Indian Food Aggregator space to be listed on the bourses, the enthusiasm among the investors about the IPO is tremendous, and also, the company has a unique status of a UNICORN in the Indian Food Delivery space, said Parvati Rai of KR Choksey.

"From the valuation perspective, we are not very comfortable with the sky-high valuation that the IPO is valued at. As a result, we recommend our investors to 'subscribe' to the issue only for listing gains," she added.

Zomato enjoys the first-mover advantage and has built a strong brand name and recall across India. Its mobile application is the most downloaded food and drinks app in each of the last 3 fiscal years (as per RedSeer). During FY21, 32.1 million average MAU (monthly active users) visited Zomato's platform, of which 6.8 million MTU (monthly transacting users) placed transactions.

As per RedSeer, Zomato has consistently gained market share over the last four years to become the category leader in India in terms of GOV (gross order value).

Zomato operates in a duopoly market and has created strong entry barriers with the widespread network. It operates in a highly underpenetrated market where of the total food consumption in India, only 8-9 percent is from restaurants, of which only 8 percent is online food delivery. This is highly underpenetrated when compared it with bigwigs like US/ China where restaurant food/online food delivery matrix stands at 40-50 percent each. As per RedSeer, the Food Services market in India is expected to grow at 9 percent CAGR over CY19-25. Thus "the sector provides a huge opportunity for Zomato to grow," said Sneha Poddar of Motilal Oswal.

Among other analysts, Meet Jain of LKP Securities, Shikhar Jain of Anand Rathi, Himanshu Nayyar of Yes Securities, and Saurabh Joshi & Ridhima Goya of Marwadi Financial Services also assigned 'subscribe' rating to the issue, while Rajnath Yadav of Choice Broking assigned a 'subscribe with caution' rating for the issue.

"The issue seems to be overpriced at the higher end of the price band. The company has certain positivities like asset light scalable business model, expanded target market post the pandemic, first-mover advantage in the food delivery business, etc. But its operations in almost duopoly market may attract regulatory actions, which would be negative for the company," Yadav explained

He further explained, "Also its operations are generating heavy losses, albeit some improvements in FY21, which we believe is not sustainable once socialization normalizes post-pandemic. Thus considering the above observations, we feel that this IPO is not for the retail investors, but investors with higher risk appetite with long term investment horizon can apply."

Article Source:- Moneycontrol

ICICI Direct's currency report on USDINR

Spot Currency

The rupee continued to appreciate on the back of positive domestic equities and no major rise in oil prices The dollar on Tuesday posted moderate gains. A larger-than-expected increase in US June consumer prices pushed T-note yields higher and supported gains in the dollar. Also, weakness in US stock indices on Tuesday spurred some liquidity

Currency futures on NSE

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The US$INR pair is struggling at higher levels. Due to no major move in the Dollar index and strong domestic equities, we feel a move towards 74.4 is expected The dollar-rupee July contract on the NSE was at | 74.61 in the last session. The open interest fell 6% for the July series

Intra-day strategy

"When we look at it from the inflation perspective, what is the contribution (of petrol and diesel) to inflation is something we have to keep in mind. So we should speak based on data on all these aspects," he told Mint, when asked if cut in fuel taxes is on the cards.

Subramanian said food inflation is a bigger concern. He said that reducing fuel taxes may not have a significant impact on retail inflation, since the weightage in the index is low.

"If you look at the last 6-7 years, anywhere between 35-60 percent of contribution to retail inflation comes from food inflation," he said as quoted by the publication.

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"Weightage of petrol and diesel in CPI (Consumer Price Index) is less than 3 percent while weightage of food is about 50 percent. Even if you consider second-round effects (of the fuel price hike), the weightage is about 5 percent. So if you do an analysis, it becomes very clear that the contribution is not that large."Subramanian also said rising crude oil prices are reflecting in overall inflation.

In June, CPI-based inflation rose 6.26 percent, slightly lower than 6.30 percent in May. Food inflation rose slightly to 5.15 percent in June, while inflation in the 'fuel and light' sub-group increased to 12.7 percent.

Article Source:- Moneycontrol

Finance chiefs of the G20 club of large economies have backed a landmark move to stop multinationals shifting profits into low-tax havens and win back hundreds of billions of dollars in lost revenues, a draft communique showed.

The agreement at talks in the Italian city of Venice is set to be finalized on Saturday and caps eight years of wrangling over the issue. The aim is for country leaders to give it a final blessing at an October summit in Rome.

The pact to establish a minimum global corporate tax rate of at least 15% in an attempt to squeeze more money out of tech giants like Amazon and Google as well as other multinationals able to shop around for the most attractive tax base.

While tax campaigners point to loopholes in the proposals and wanted a more ambitious crackdown, the move is a rare case of cross-border coordination in tax matters and could strip many tax havens of their appeal.

"We invite all members that have not yet joined the international agreement to do so," the communique seen by Reuters said of a number of countries still resisting the move.

Two sources said the statement was expected to be released at the end of talks on Saturday without changes.

Oil prices fell more than $1 a barrel on July 7 in another seesaw trading session, as investors feared this week's collapse in OPEC+ talks could mean more supply, not less, is on the way.

Crude markets have been volatile over the last two days following the breakdown of discussions between major oil producers Saudi Arabia and the United Arab Emirates, signaling investors are unclear on what the OPEC+ standoff means for worldwide production.

Brent crude settled at $73.43 a barrel, falling $1.10, or 1.5%. U.S. West Texas Intermediate settled at $72.20 a barrel, shedding $1.17 or 1.6%. Both benchmarks rallied more than $1 a barrel earlier in the session, similar to Tuesday's action.

The Organization of the Petroleum Exporting Countries and its allies including Russia, known as OPEC+, have restrained supply for more than a year since demand crashed during the coronavirus pandemic.

The group is still maintaining nearly 6 million BPD of output cuts. It was expected to add to supply, but three days of meetings failed to close divisions between the Saudis and the Emiratis.