Shoppers Stop Stock Spikes
- 18th December 2024
Aaj Ka Bazaar
Indian equity markets are expected to open lower on Wednesday, with the Gift Nifty indicating a weak start, as global market pressures mount. Foreign institutional investors are turning risk-averse ahead of the US Federal Reserve’s policy rate decision, shifting their investments from Indian equities to US stocks. Market sentiment is cautious, with volatility anticipated ahead of the Fed’s announcement and its economic projections. While most Asian markets are in the green, Japan’s Nikkei is trading lower due to concerns over Japan’s trade data and the Bank of Japan’s upcoming rate decision. Central banks in Japan, Britain, Sweden, and Norway are meeting this week, with Sweden expected to hike rates. The US Fed is widely anticipated to cut rates by 25 basis points. In stock specific front, the cancellation of Va Tech Wabag’s contract for a major desalination project in Saudi Arabia has further added to market uncertainty.
Markets Around Us
BSE Sensex –80,564.70 (-0.15%)
Nifty 50 – 24,302.75 (-0.14%)
Bank Nifty – 52,701.20 (-0.25%)
Dow Jones – 43,512.80 (-0.04%)
Nasdaq – 20,108.30 (-0.33%)
FTSE – 8,195.20 (-0.82%)
Nikkei 225 – 39,210.33 (-0.39%)
Hang Seng – 19,810.83 (0.56%)
Sector: Retail
Shoppers Stop Rises on Major Deal
Shares of Shoppers Stop surged nearly 6% on December 18 after a large trade worth ₹236 crore took place, involving 37.6 lakh shares, or 3.4% of the company’s stake, at an average price of ₹628 per share. By 9:24 am, the stock was trading at ₹660 on the NSE, with trading volumes spiking to nearly double the one-month daily average. Despite today’s rally, the stock has been under pressure, falling over 23% in the past three months due to weak urban demand. The company reported a net loss of ₹20.59 crore in Q2, compared to a ₹2.73 crore profit in the same period last year, as extended rains and weak discretionary spending weighed on performance. However, revenue grew 7.3% year-over-year to ₹1,114.87 crore. To boost growth, Shoppers Stop recently announced plans to enter quick commerce, offering delivery of products like clothing and cosmetics within three hours from its stores.
Why it Matters:
Shoppers Stop’s stock surge reflects market optimism following a significant ₹236 crore trade, despite recent underperformance. The company’s focus on quick commerce highlights strategic efforts to adapt to evolving consumer preferences. This could signal potential growth opportunities for investors amid challenging retail conditions.
NIFTY 50 GAINERS
DRREDDY – 1275.35 (2.22%)
SUNPHARMA – 1818.65 (1.65%)
CIPLA – 1471.90 (1.45%)
NIFTY 50 LOSERS
TATAMOTORS – 762.25 (-2.24%)
POWERGRID – 324.90 (-1.49%)
LT – 3769.05 (-1.00%)
Sector: : Real Estate
DLF Shares Drop Despite Positive Outlook
DLF shares have gained 20% this year, and an international brokerage predicts a 12% upside with a target price of Rs 975. The company’s luxury project, “The Dahlias,” has seen strong demand, with 130-150 units sold, potentially generating Rs 10,000-11,000 crore in sales—exceeding FY25 expectations. DLF reported a 121% rise in profit to Rs 1,387 crore for Q2FY25, up from Rs 628 crore last year, driven by tax reversals and higher revenues. Revenue grew 48% year-on-year to Rs 2,181 crore, while expenses rose 58% to Rs 1,604 crore. New sales bookings totaled Rs 692 crore, and operating cash surplus stood at Rs 1,211 crore.
Why it Matters:
DLF’s strong profit growth of 121% and robust demand for its luxury project, “The Dahlias,” signal its resilience and leadership in India’s real estate market. With a 20% rise in share price this year and an additional 12% upside forecast, it presents a compelling investment opportunity. The company’s consistent performance underscores the growing demand for premium housing and solidifies its market position.
Around the World
Asian markets mostly rose on Wednesday, supported by reports of increased fiscal spending in China, though gains were capped by caution ahead of a key U.S. Federal Reserve decision. China’s proposed fiscal deficit increase to 4% of GDP by 2025—its highest ever—signals a focus on boosting growth with an additional 1.3 trillion yuan in spending and more debt issuances. This uplifted Chinese stocks, with the CSI 300, Shanghai Composite, and Hang Seng gaining modestly. Meanwhile, Japan’s markets were mixed as investors awaited the Bank of Japan’s meeting, while speculation of a Honda-Nissan-Mitsubishi merger spurred notable stock moves. Broader markets saw mixed performances, with South Korea’s KOSPI up 1%, Australia’s ASX 200 edging higher, and Singapore’s STI dipping slightly. In India, Nifty 50 futures pointed to a weak opening after recent losses. All eyes remain on the Fed’s expected rate cut and its 2025 policy outlook, which may shape global market sentiment.
Option Traders Corner
Max Pain
Nifty 50 – 24,450
Bank Nifty – 53,000
Nifty 50 – 24,421 (Pivot)
Support – 24,218, 24,100, 23,897
Resistance – 24,538, 24,741, 24,859
Bank Nifty – 53,019 (Pivot)
Support – 52,524, 52,213, 51,717
Resistance – 53,330, 53,826, 54,136
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