Risky corporate bond issuances spike as investors chase high-yielding debt - Daily Market Update - Equity 21 Nov 2023 | Globe Capital Market LTD.
Risky corporate bond issuances spike as investors chase high-yielding debt – Daily Market Update – Equity 21 Nov 2023

Indian investors looking for better returns and to diversify from equities are lapping up high-yielding but riskier corporate bonds as demand for domestic debt rises. Funds raised by issuing low-investment grade corporate bonds, rated ‘BBB-’, have surged over eightfold to Rs 15,419 crore so far this year, according to data from Prime Database. Debt rated below 'BBB-' is considered non-investment grade.

Overview and Outlook

Global Stock Market Today

  • US equity markets ended on positive note, up in range 0.58% to 1.13%.
  • European equity markets ended on mixed note.
  • Asian equity markets are trading mixed.
  • GIFT Nifty is little changed & Nifty futures likely to open around 19810 levels (as on 8:30AM).


News highlights from across the globe

  • Asian stocks opened higher on Tuesday, buoyed by Wall Street gains as U.S. stocks extended their storming rally and a $16 billion sale of 20-year Treasuries lured bond buyers.
  • On Monday, the S&P 500 had its strongest close since August and the Nasdaq 100 hit a 22-month high.
  • Brent crude was trading at $77 a barrel and the yield on the 10-year US bond was trading at 4.41%.


Important news updates from the domestic front

  • Tata Power Renewable Energy crossed the 1.4-gigawatt capacity of group captive projects in the last seven months, aided by the signing of power delivery agreements with various industries across segments.
  • Adani Enterprises: Mumbai Travel Retail Pvt., a subsidiary of Adani Enterprises Ltd., has incorporated its wholly-owned subsidiary, MTRPL Macau Ltd., to set up tobacco shops at Macau International Airport.
  • Tech Mahindra Americas signed a collaboration deed with Neom Tech for providing digital services. It will incorporate a new subsidiary for provide product and platform development services to Neom Group companies.
  • IRCTC: The company received Railway Ministry permission for long-term tenders for a period of seven years through clustering of trains. The Rail Neer plant has commenced commercial production, and the production capacity of the plant is 72,000 litres per day.
  • Oberoi Realty announced the launch of ‘Forestville by Oberoi Realty’, the first luxury residential project in Kolshet, Thane. The company launched the first phase of this development, consisting of three towers.
  • Bayer CropScience received a GST demand and a penalty of Rs 85.5 lakh each from the Rajasthan GST authority.
  • Manappuram Finance: The Reserve Bank of India imposed a monetary penalty on Manappuram Finance of Rs 42.78 lakh for non-compliance with certain provisions of the ‘NBFCs – Systemically Important Non-Deposit-Taking Company and Deposit-Taking Company (Reserve Bank) Directions, 2016’.e
  • Karnataka Bank has entered into a strategic corporate tie-up with HDFC Life Insurance Co. to provide products to its customers. Through the partnership, it plans to provide innovative and customer-friendly solutions to those who are in search of financial security and life protection.
  • RateGain Travel Technologies raised Rs 600 crore from qualified institutional buyers through the issue of 93.3 lakh shares at a face value of Rs 1 each.


Nifty Overview & Outlook

Nifty index settled on flat to negative note after a lackluster trading session, closed shop at 19732 levels after a cut of 38 points from its previous closing values.

Broader markets too performed in-line with benchmark as Mid & Small cap index ended on a flat note.

Performance on the sectoral front was mix. Amongst them, Nifty Auto and Media Index were the top losers, fell 0.76% and 0.60% respectively. On the other hand, IT index witnessed some buying interest, gained 0.60%.

Technically, Nifty index is consolidating around an important resistance of 19850 levels. On the down side, support is placed around 19500 levels. Crossover and sustenance above 19850 levels might take it towards 20000 level in immediate near term.


Derivatives Overview & Outlook

Yesterday, long unwinding was seen in Nifty  futures with decrease in open interest by 4.2%, short buildup was seen in Finnifty futures with increase in open interest by 5%. No significant change was seen in Banknifty futures on price front but open interest was decreased by 1.3% with initial sign of  short covering.

On sectoral front, long buildup was seen in Technology stocks whereas short buildup was seen in Automobile and Infrastructure stocks. Short covering was seen in Realty stocks.

On options front, call writing was seen at multiple strikes and maximum positions are at 19700 PE and 19800 CE.


Institutional Trading Activity

Last week, FIIs sold stocks worth Rs 646 Cr in the cash segment, sold stocks futures worth Rs 1122 Cr and bought index futures worth Rs 27 Cr. DIIs were net buyer in the cash segment to the tune of Rs 78 Cr.


Nifty Futures, Banknifty Futures and Finnifty Key Levels

Nifty – Resistances 19870-19930; Supports 19590-19510

Banknifty – Resistances 44200-44500; Supports 43300-43100

Finnifty – Resistances 19760-19870; Supports 19450-19370




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