Oil prices fall as ahead of OPEC+ decision; Fed speakers signal bank may go on tightening monetary policy
时间:2024-09-29 02:08:57 阅读(143)
Oil slipped before an OPEC+ meeting as traders wait to see whether the group will heed a US call to boost supply. West Texas Intermediate fell below $94 a barrel in early Asian trading after ending marginally higher on Tuesday. The Organization of Petroleum Exporting Countries and its allies convene virtually later Wednesday, and a Bloomberg survey of traders and analysts suggested the alliance led by Saudi Arabia was more likely to keep output steady in September than agree on an increase.
Investors were also tracking the fallout from a visit by House Speaker Nancy Pelosi to Taiwan that’s inflamed US-China tensions and reduced appetite for risk assets. Pelosi, the highest-ranking American politician to visit the island in 25 years, plans to hold a press briefing with President Tsai Ing-wen.
US President Joe Biden visited Saudi Arabia last month in an effort to convince OPEC+ to produce more crude after gasoline prices spiked to a record. Ahead of this week’s meeting, an administration official talked up the prospect for a positive announcement from the group even though some members have been unable to meet current output quotas in full.
Goldman Sachs Group Inc. said it expected OPEC+ to agree to a “modest” increase in output, according to a note from analysts including Damien Courvalin. At present, the global crude market faces a deficit of 2 million barrels a day and stockpiles are near record low levels, the bank said.
Prices:WTI for September delivery declined 0.7% to $93.77 a barrel on the New York Mercantile Exchange at 8:53 a.m. in Singapore. Brent for October settlement fell 0.8% to $99.71 a barrel on the ICE Futures Europe exchange. Ahead of the OPEC+ session, the American Petroleum Institute reported that US crude stockpiles expanded by more than 2 million barrels, according to people familiar with the data. Government figures will follow later on Wednesday.
Brent crude’s prompt spread — the difference between its two nearest contracts — has narrowed to the lowest since May, suggesting the physical tightness is easing. The differential was at $1.88 a barrel on Wednesday, down from above $4 about a month ago.
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- uidance range. Ebit margins at 18.2% were down 140bps and missed estimates due to higher-than-expected employee costs. Profits at Rs 39.8 bn were up 11% y-o-y and were slightly ahead of estimates due to a $21m gain booked on the buyback of senior notes in Q4.
Services miss estimates; Software better than expected: Services business grew 0.6% q-o-q cc and missed HCLT’s Q3FY23 guidance, mainly due to a 3.8% q-o-q cc decline in the ER&D segment. Growth in the IT&BS segment moderated slightly to 1.6% q-o-qcc but was in line with estimates. BFSI and Life Sciences were the key growth drivers, while communications were the drag among verticals. Growth was led by the Americas region, while Europe and ROW posted declines.
Decline in bookings reflects delays in decision-making: HCLT won 10 large deals in services and three large deals in Software with net-new deal TCV of $2.1bn, down 8% y-o-y. Deal wins were driven by the services portfolio, were centered on cost optimisation and vendor consolidation and came mainly from BFSI, manufacturing and Life Sciences verticals. Management highlighted a ramp-down in discretionary spending in Hitech and communications verticals but pointed to a strong deal pipeline.
FY24 guidance in line with expectations: HCLT has guided for 6-8% y-o-y growth for overall business and 6.5-8.5% y-o-y cc growth in services segment and 18-19% margins in FY24—all in line with our assumptions. We maintain our FY24-25 cc revenue growth and margin estimates and expect HCLT to deliver 6.5% cc revenue growth and 18.4% margins in FY24. However, we lower our earnings forecasts by 2% to factor the higher tax rate indicated by the management.
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Raise PT: HCLT has fared better in Q4, particularly in North America and BFSI, unlike its peers. However, rising demand uncertainty as a US recession nears remains a concern. HCLT’s stock at CMP trades at 17x PE and offers a 5% yield, which in our view should limit downsides and derating. Hence, we raise our target PE to 17x (16x earlier) and raise our PT to Rs 1,125, offering 8% potential upside.
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