Markets opened below yesterday’s closing point.
IT stocks and consumer durables stocks rose the most. PSU bank stocks and oil and gas stocks fell the most.
Global markets: US markets fell. Most Asian markets fell. European markets fell (as of 6 pm IST).
News
India’s forex reserves fell by $7.79 billion to $690.69 billion in the week that ended on 1 March.
Onemi Technology Solutions (Kissht) IPO listed on the stock exchanges at a premium of 11.11% over the issue price and closed 22.01% up at the end of the day.
Zepto has received SEBI’s approval for its IPO.
InCred Holdings has filed an updated DRHP (Draft Red Herring Prospectus) with SEBI for a Rs 1,250 crore IPO.
Stocks Updates
Tata Consumer: will invest up to Rs 160 crore to set up a 2,000 MT instant tea manufacturing facility in India.
Tata Power: partnered with Bhutan’s DGPC to develop 404 MW Nyera Amari hydropower project, taking the total pipeline to around 5,033 MW.
Power Finance: subsidiary incorporated ‘Pune West Power Transmission’ SPV to a develop transmission project in Maharashtra.
TVS Motor: received NCLT approval for merger of Sundaram Auto Components into the company.
L&T: won significant order (Rs 1,000 crore to 2,500 crore) from BCGCL and BHEL for a Coal-to-Ammonium-Nitrate project in Odisha.
Pidilite: net profit rose 37.15% year-on-year to Rs 579.27 crore in the Jan-March quarter. Dividend announced: Rs 11.50 per share.
Britannia: net profit rose 21.14% year-on-year to 678.34 crore in the Jan-March quarter. Dividend announced: Rs 90.50 per share, with 31 July as the record date.
SBI: net profit rose 1.1% year-on-year to Rs 20,161.30 crore in the Jan-Mar quarter. Dividend announced: Rs 17.35 per share, with 16 May as the record date.
Bank of Baroda: profit rose 6.4% year-on-year to Rs 5647.96 crore in the Jan-March quarter. Net Interest Income rose 8.7% to Rs 12,494 crore. Dividend announced: Rs 8.50 per share.
Hyundai Motors: net profit fell 22% to Rs 1255.63 crore in Jan-March quarter. Dividend announced: Rs 21 per share.
Word of the Day
Derivatives
It is a financial contract whose value is based on an underlying asset like stocks, commodities, currencies, or bonds.
Derivatives are primarily used for hedging (managing risk) or for speculation (betting on price movements for profit).
Their prices change based on the value of the underlying asset.
Common types of derivatives are futures, options, forwards, and swaps.
Example: an investor can buy a futures contract to purchase gold at a fixed price in the future, to protect (hedge) against price changes.
6 Day Course
Theme: India’s relation with USD
Day 5: Friday
How does the RBI ensure there are no sudden spikes in the USD-INR exchange rate?
One tool is to use the foreign exchange reserves.
The RBI has about ~$650 to $700 billion worth of USD in reserve.
It sells this USD to stabilise the prices when the volatility is too high.
When the INR starts appreciating and becoming strong, the RBI starts buying USD causing the price of USD to go up.
They also sell government bonds to reduce liquidity of the INR in the markets.
The RBI also brings out schemes for NRIs to make it attractive for them to park money in India (USD to INR).
Another tool in their toolbox is to increase/decrease the repo rate in India (interest rate).
This makes deposits in India attractive or unattractive based on what the RBI wants. A higher interest rate attracts more investment, and lower interest rates tend to cause money to flow out.
Featured Question
Q. “How does BSE, NSE or any other stock markets make money?”
Stock exchanges like BSE and NSE make money via charges.
When companies list themselves on the stock exchange, they are required to pay a fee.
They are also required to pay an annual fee to remain listed.
They charge transaction and trading fees (to brokers).
Exchanges also provide data services and information/insights to buyers.
Many exchanges offer co-location services wherein their own servers might host programs of HFTs and hedge funds for trading.
This allows for faster trading. They charge rent for such services.
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