Nifty Opens Steady; L&T Gains, Tata Motors Slips on M&A Buzz
The Indian stock market opened flat on Monday, with investors awaiting cues from the Federal Reserve’s interest rate meeting and ongoing India-US trade talks. The Nifty traded near 24,860, with market participants expecting a rangebound move between 24,680 and 24,920 in the near term.
The Sensex was up 0.1% at 8,433.35, while the Nifty50 index was steady at 24,859.15. The broader markets were also steady, with the Nifty Midcap 100 index trading 0.1% higher and the Nifty Smallcap 100 index up 0.2%.
Among individual stocks, Larsen & Toubro (L&T) was the biggest gainer, surging 4% after the company reported strong earnings for the quarter ended June 30. The engineering and construction major’s net profit rose 23.3% year-on-year to ₹3,169 crore, driven by a 14.5% increase in revenue to ₹43,813 crore.
On the other hand, Tata Motors slipped 3% after reports emerged that the company was in talks to acquire Iveco, the Italian truck maker. The deal is expected to be worth around $1.2 billion and would give Tata Motors a significant presence in the European commercial vehicle market.
The acquisition is seen as a strategic move by Tata Motors to expand its global footprint and increase its market share in the commercial vehicle segment. Iveco, which is a subsidiary of CNH Industrial, has a significant presence in Europe and has a strong brand reputation.
However, the stock slipped on concerns that the deal may dilute Tata Motors’ focus on its core markets and lead to significant debt addition. The company’s net debt rose 14.5% year-on-year to ₹44,136 crore in the quarter ended June 30, driven by higher capital expenditure and working capital requirements.
Other stocks that were in focus on Monday included Hindalco, which rose 2.5% after the company reported a 16.3% year-on-year increase in net profit to ₹2,454 crore for the quarter ended June 30. The company’s revenue rose 14.5% year-on-year to ₹34,531 crore, driven by higher demand for its aluminum and copper products.
In other news, analysts at ICICI Securities have downgraded their rating on Tata Steel to ‘underperform’ from ‘outperform’, citing concerns over the company’s debt levels and the impact of the ongoing trade tensions on its Europe-based operations.
Meanwhile, analysts at Edelweiss Securities have maintained their ‘buy’ rating on HDFC Bank, citing the company’s strong earnings growth and improving asset quality. The bank’s net profit rose 23.5% year-on-year to ₹5,058 crore for the quarter ended June 30, driven by higher net interest income and a 16.5% year-on-year increase in fee income.
In terms of market trends, analysts expect the Nifty to trade in a range of 24,680-24,920 in the near term, driven by FII selling and MSCI rebalancing. Foreign institutional investors (FIIs) have been selling Indian equities in recent weeks, citing concerns over the impact of the ongoing trade tensions on the global economy.
The MSCI rebalancing, which is expected to take place in August, is also likely to impact the Indian market. The rebalancing process involves recalculation of the MSCI indices, which can lead to changes in the constituents of the indices and impact market sentiment.
Overall, the Indian stock market is expected to remain volatile in the near term, driven by the ongoing trade tensions and FII selling. However, analysts expect the market to stabilize once the trade talks between the US and India conclude and the MSCI rebalancing is complete.
Source: https://stocktwits.com/news-articles/markets/equity/nifty-sensex-open-steady-july-30/choQYNdR5yC
