RBI bars JM Financial’s arm from lending against shares : Daily Market Update - 06 March 2024 | Globe Capital Market LTD.
RBI bars JM Financial’s arm from lending against shares : Daily Market Update – 06 March 2024

The Reserve Bank of India (RBI) on March 5 barred JM Financial Products Ltd (JMFPL) from giving loans against shares and debentures, including sanction and disbursal of loans against Initial Public Offering (IPO) of shares, with immediate effect. Announcing the decision, the RBI said the action has been taken after observing certain serious deficiencies in the financial services firm's loan process. More importantly, the central bank highlighted that there are serious concerns on the governance issues in the company, apart from violation of regulatory guidelines.

Overview and Outlook

Global Stock Market Today

  • US equity markets settled lower in range1% to 2%.
  • Barring FTSE, other European equity markets settled on a flat to negative note .
  • Asian equity markets are trading mix.
  • GIFT Nifty is little changed, Nifty futures is likely to open around 22425 levels (as on 8:30AM).


News highlights from across the globe

  • Asian equity markets are trading mix on Wednesday, tracking overnight losses on Wall Street lead by index-heavy tech giant companies.
  • U.S. stocks came under pressure as a trio of tech heavyweights slid, with traders wading through mixed economic data in the run-up to Jerome Powell’s testimony to Congress.
  • Brent crude was trading 0.92% lower at $82.04 a barrel.


Important news updates from the domestic front

  • JM Financial: The Reserve Bank of India directed the company to stop any form of financing against shares and debentures with immediate effect. This includes the sanction and disbursal of loans against the initial public offer of shares as well as against subscriptions to debentures.
  • JSW Energy’s step-down unit signed a battery energy storage purchase agreement with Solar Energy Corp. for 250 MW/500 MWh of battery energy storage systems. The company has signed an agreement for the first project out of the total awarded project capacity of 500 MW/1,000 MWh.
  • NHPC started work on Jalaun Ultra Renewable Energy Power Park in Uttar Pradesh. The company’s unit is to invest Rs 800 crore in a 1,200 MW renewable power park to be constructed in 24 months and generate 2,400 MU of electricity every year.
  • Wipro acquired a 27% stake in B2B sales platform SDVerse LLC for $5.85 million in cash. The transaction will be completed before the end of March. General Motors, Magna, and Wipro have teamed up to develop SDVerse LLC.
  • Aditya Birla Fashion: Caladium Investment exercised the right to convert all 6.6 crore warrants into equity shares.
  • IRCTC signed a MoU with Swiggy to provide pre-ordered meals via IRCTC e-Catering Services.
  • Sonata Software will open a delivery centre in Poland to address the growing demands from its global clients.
  • Bharat Forge had made an investment of Rs 179.9 crore in its unit, Bharat Forge Global Holding.
  • Havells India plans to add kitchen appliances to its portfolio, outsource the entire range of products and serve the domestic market.
  • Bharti Airtel: The telco approved the allotment of 56.8 lakh shares to FCCB holders at a conversion rate of Rs 518 per share.


Nifty Overview & Outlook

Benchmark Nifty index ended on a flat to negative note at 22356 levels, down 50 points from its previous closing values after a highly volatile trading session.

Broader markets underperformed the benchmark as Small and Midcap index fell 1.2% & 0.48% respectively.

Performance on the sectoral front was mix. Amongst them, Nifty PSU Bank index was the top gainers, rose over 2.5% followed by Nifty Auto index that settled higher by 1.35%. On the other hand, Nifty FMCG, IT, Media index led the decline, down in range 1% to 1.5%.

Technically, Nifty index is well placed on multiple time frames. Going ahead, we reiterate our bullish view on Nifty index and expect it to test 22650 levels in immediate near term till it is trading above 21850 levels on closing basis.


Derivatives Overview & Outlook

Yesterday, short buildup was seen in Nifty and Finnifty futures with increase in open interest by 4.3% and 30.7% respectively. Long buildup was seen in Banknifty futures with increase in open interest by 15.7%.

On the sectoral front, fresh long buildup was seen in Media, Automobile and Chemicals shares. Short buildup was seen in Cement, Finance and Textile share.

On options front, put writing along with call writing was seen at multiple strikes and maximum positions are at 22200 PE and 23000 CE followed by 22400 CE.


Institutional Trading Activity

Yesterday, FIIs bought stocks worth Rs 574 Cr in the cash segment, sold stocks futures and index futures worth Rs 4537 Cr and Rs 1401 Cr respectively. DIIs were net buyer in the cash segment to the tune of Rs 1835 Cr.


Nifty Futures, Banknifty Futures and Finnifty Key Levels

Nifty – Resistances 22550-22630; Supports 22350-22270

Banknifty – Resistances 47990-48300; Supports 47500-47200

Finnifty – Resistances 21050-21155; Supports 20880-20770


F&O Securities in Ban Today  – ZEEL.


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