{"id":37211,"date":"2025-05-03T11:41:46","date_gmt":"2025-05-03T06:11:46","guid":{"rendered":"https:\/\/kuvera.in\/blog\/?p=37211"},"modified":"2025-05-03T12:37:38","modified_gmt":"2025-05-03T07:07:38","slug":"the-weekly-wrap-what-the-spoof","status":"publish","type":"post","link":"https:\/\/kuvera.in\/blog\/the-weekly-wrap-what-the-spoof\/","title":{"rendered":"The Weekly Wrap | What the Spoof!"},"content":{"rendered":"

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tl;dr<\/strong>\u00a0Hear the article in brief instead?<\/p>\n

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The main purpose of the stock market, the late American financier Bernard Baruch once said, is to make fools of as many men as possible. <\/span><\/p>\n

Baruch, who also advised US presidents Woodrow Wilson and Franklin D Roosevelt during the two world wars, knew a thing or two about the stock market. After all, he had made millions as a broker and stock market speculator in the bull market before the crash of 1929-1930<\/span><\/p>\n

A century later, and across the seven seas, the number of people in India who appear to be walking the same path that Baruch talked about seems to be increasing. <\/span><\/p>\n

It was the big bull Ketan Parekh in early January and Asmita Patel, the \u2018she wolf of the stock market\u2019, in February. And then there were companies like LS Industries Ltd, Brightcom Group and Gensol Engineering that the Securities and Exchange Board of India has caught manipulating stock prices or engaging in illegal or fraudulent activities.<\/span><\/p>\n

This week, SEBI caught yet another brokerage company and its executives engaged in sophisticated techniques to manipulate stock prices. The broker is Patel Wealth Advisors Pvt Ltd and, per SEBI, it made crores of rupees in illegal gains by \u201cspoofing\u201d orders.<\/span><\/p>\n

In its order, SEBI explained how Patel Wealth and its directors \u201cspoofed\u201d orders to artificially boost demand for stocks in both cash and derivatives segments over a three-year period. The SEBI investigation uncovered a total of 621 such spoofing instances across 173 stocks. <\/span><\/p>\n

But what exactly is spoofing? SEBI whole-time member Kamlesh Chandra Varshney himself described spoofing. He said that spoofing is a type of manipulative trading activity which involves placing bid or ask orders, with the intent of cancelling those orders before execution while simultaneously executing trades on the opposite side of the book. The suspect trader involved in such kind of activity is known as \u201cspoofer\u201d.<\/span><\/p>\n

\u201cA spoofer manipulates the order book by creating a false sense of demand or supply by placing large orders at a price which is far away from market prices. Such large orders on one side of the order book creates asymmetry in the book, thereby, influencing other market participants to trade. When such trading leads to movement in the price of the scrip, the spoofer trades on the opposite side of the book thereby making unlawful gains,\u201d Varshney said.<\/span><\/p>\n

Varshney also said that spoofing is a \u201cmanipulative, fraudulent and unfair trade practice\u201d that Patel Wealth employed to deceive other market participants and profit from price fluctuation they induced unwary investors in the market.<\/span><\/p>\n

SEBI has now banned Patel Wealth and four of its executives from buying, selling or otherwise dealing in securities, directly or indirectly. It also asked them to return about Rs 3.22 crore in illegal gains that they made.<\/span><\/p>\n

To sum it up, be very careful while trading or investing in the stock market. And avoid getting spoofed!<\/span><\/p>\n

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\"Start<\/a><\/b><\/p>\n

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Bumpy Ride<\/b><\/h3>\n

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Talking about taking people for a ride, let\u2019s move on to companies whose actual job is to let people, well, go on a ride quite literally. <\/span><\/p>\n

At the beginning of every month, automakers and two-wheeler companies report their wholesale numbers\u2014essentially, the number of units dispatched from factories to dealerships. The numbers for April show two big upsets, at least so far.\u00a0<\/span><\/p>\n

In the car and SUV market, three of the four largest companies that make up nearly 80% of the total industry sales reported weak numbers in April. Maruti Suzuki said sales rose just 0.6% in April to 138,704 units while Hyundai Motor\u00a0India reported a drop of 11.6% to 44,374 units and Tata Motors posted a 5.1% decline to 45,532 units.\u00a0<\/span><\/p>\n

Meanwhile, Scorpio and Thar SUV maker Mahindra & Mahindra reported a 27.6% jump in monthly sales to 52,330 units that helped it overtake Hyundai and Tata to occupy the No. 2 spot in\u00a0the car market.<\/span><\/p>\n

Most other smaller automakers recorded strong growth. Toyota\u2019s sales jumped nearly 33% as it benefitted from its product sharing tie-up with Maruti. Hyundai affiliate Kia\u2019s sales climbed 18.3% while MG Motor\u00a0India\u00a0posted a 23% rise.
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Overall, the new financial year is off to a weak start for India\u2019s auto industry, which contributes nearly 7% to the country\u2019s GDP and has an even larger share of the manufacturing sector. Car sales grew only about 2% in 2024-25 and are projected to increase at a similar pace this year as demand cools though interest rate cuts later in the year may help.<\/span><\/p>\n

There was a big upset in the two-wheeler segment, too. Hero MotoCorp, which has been India\u2019s biggest two-wheeler maker for decades, has been losing ground over the past many months with rising competition especially from its former Japanese partner Honda and local rival TVS Motor. In April, Hero\u2019s factory dispatches to dealerships plunged while TVS posted a strong jump that may have been enough to take the crown of India\u2019s No.1 two-wheeler maker.<\/span><\/p>\n

Hero MotoCorp’s factory dispatches dropped 43% to 305,406 units in April from 533,585 units in the same month last year. Domestic sales slumped 44% to 288,524 units. The company cited a production halt at its factories for supply chain alignment and maintenance as the reasons for the sharp drop. Bajaj Auto\u2019s total two-wheeler sales slipped 7% to 317,937 units, as a 4% rise in exports partially offset a 13% drop in local sales.<\/span><\/p>\n

In contrast, TVS Motor\u2019s total dispatches climbed 15% to 430,330 units in April 2025. Domestic two-wheeler sales rose 7% to 323,647 units, with motorcycle sales revving up 17% to 220,527 units and scooters recording an 18% growth to 169,741 units. TVS also topped the electric scooter market with sales surging 59% to 27,684 units in April.<\/span><\/p>\n

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The Chips are Down<\/b><\/h3>\n

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There was some more upsetting news this week. India\u2019s ambitious target to emerge as a global semiconductor powerhouse is facing a reality check with two more companies halting their chipmaking plans.<\/span><\/p>\n

Tamil Nadu-based software-as-a-service company Zoho has suspended its $700 million plan to expand into chip manufacturing. Zoho had planned to set up its semiconductor facility in Karnataka, and the state government had given its approval. Its billionaire co-founder Sridhar Vembu, a widely known proponent of making in India, tweeted this week that the company was abandoning its plan for now.\u00a0<\/span><\/p>\n

\u201cWe did not have that confidence in the tech so our board decided to shelve this idea for the time being, until we find a better tech approach,\u201d he wrote. Vembu also said that chipmaking is a capital-intensive business which requires government backing and that it wanted to be \u201cabsolutely sure\u201d of the technology path before it took taxpayer money.<\/span><\/p>\n

Indeed, government backing is what US-backed Micron to set up a chip packaging unit in Gujarat. While the Micron facility has a total project cost of $2.75 billion dollar, the company itself is chipping in with just $825 million and the Indian government as well as the Gujarat government will contribute the remaining. The central government is also providing 50% fiscal support to the Tata Group\u2019s Rs 91,000 crore chip plant being set up in Gujarat.\u00a0<\/span><\/p>\n

To be sure, Zoho isn\u2019t the first Indian company to back out of chipmaking. In 2023, mining conglomerate Vedanta\u2019s proposed multi-billion-dollar joint venture with Taiwan\u2019s Foxconn collapsed as it failed to get government incentives. The other company that has paused its planned foray into chipmaking is Adani Group.\u00a0<\/span><\/p>\n

Billionaire Gautam Adani\u2019s group has halted talks with Israel\u2019s Tower Semiconductor for a $10 billion chip project in Maharashtra, according to a Reuters report. The report said that the Adani Group feels that the project, announced last year, did not make strategic and commercial sense for the conglomerate. While Adani Group hasn\u2019t officially commented on pausing the project, but if it\u2019s true it deals a big blow to the government\u2019s semiconductor plans.<\/span><\/p>\n

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The Magnificent Five<\/b><\/h3>\n

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Staying with tech news, some of the world\u2019s biggest technology companies have reported quarterly earnings over the past few days. And all of them\u2014Apple, Amazon, Microsoft, Meta Platforms and Google parent Alphabet\u2014topped analysts\u2019 forecasts amid fears that President Donald Trump\u2019s tariff policies will slow growth in the US.<\/span><\/p>\n

Apple marginally exceeded analysts\u2019 expectations as it reported an 8% rise in first-quarter earnings per share to $1.65 while revenue increased 5% to $95.4 billion. iPhone revenue increased to $46.8 billion from $45.96 billion a year earlier while services revenue grew 11.6% to $26.6 billion.<\/span><\/p>\n

However, Apple warned of a $900-million hit due to tariffs in the current quarter. This, even as Trump has exempted electronic products including smartphones and laptops from the 145% tariffs imposed on imports from China.<\/span><\/p>\n

Apple also said it is sourcing most of its iPhones for sales in the US from India. CEO Tim Cook said the company can source \u201calmost all\u201d iPad, Mac, Apple Watch, and AirPods from Vietnam. Outside of the US, however, it will continue to sell products made in China.<\/span><\/p>\n

Ecommerce giant Amazon also topped forecasts for first-quarter earnings but its guidance for the second quarter came below expectations. For Q1, Amazon’s EPS rose to $1.59 from $0.98 a year earlier while revenue climbed to $155.7 billion from $143.3 billion in Q1 last year.<\/span><\/p>\n

Microsoft announced its third-quarter earnings this week, beating expectations thanks to its cloud business. Its EPS jumped to $3.46 from $2.94 a year earlier and revenue surged to $70 billion from $61.8 billion. Its revenue from commercial cloud business climbed to $42.4 billion from $35.1 billion in Q3 2024. Microsoft shares surged after the earnings report, helping the company briefly overtake Apple as the world’s most valuable company.<\/span><\/p>\n

Facebook and WhatsApp parent Meta Platforms also managed to exceed expectations as Q1 revenue jumped 16% to $42.31 billion while profit soared 36.5% to $6.43 per share. Alphabet reported EPS of $2.81 on revenue of $90.2 billion for Q1, compared with EPS of $1.89 on revenue of $80.5 billion during the same period last year.<\/span><\/p>\n

These five are part of the so-called Magnificent Seven tech stocks. The other two are chipmaker Nvidia, which will report its earnings later this month, and electric carmaker Tesla, which missed analysts’ estimates last month as its adjusted EPS fell to $0.27 from $0.45 a year ago and revenue slipped to $19.34 billion from $21.3 billion.<\/span><\/p>\n

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\"FD<\/a><\/p>\n

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Market Wrap<\/b><\/h3>\n

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The NSE Nifty 50 and the BSE Sensex climbed for a third consecutive week, driven higher by foreign inflows and optimism that India would be able to stitch a trade deal with the US soon. The Nifty rose almost 1.3% during the week while the Sensex logged a gain of 1.6%.\u00a0<\/span><\/p>\n

Foreign portfolio investors turned net buyers in April, investing $510 million in Indian equities after pulling out $13.4 billion in the previous three months, according to data from the National Securities Depository Ltd.\u00a0<\/span><\/p>\n

Index heavyweight Reliance Industries surged 9.4% this week after reporting posted strong fourth-quarter earnings last week. This was the company\u2019s best weekly performance in nearly five years.\u00a0<\/span><\/p>\n

Adani Ports was the second-best performer after its quarterly earnings exceeded analysts\u2019 estimates. Other top gainers included Maruti Suzuki, Bharat Electronics, SBI Life, IndusInd Bank, HDFC Life Insurance, and Zomato parent Eternal.\u00a0<\/span><\/p>\n

Shriram Finance was the top loser for the second week in a row. It was followed by JSW Steel, which lost over 5% after the Supreme Court on Friday scrapped its acquisition of Bhushan Power and Steel four years ago.<\/span><\/p>\n

Other laggards included UltraTech Cement, Bajaj Finserv, Hero MotoCorp, Nestle and Bajaj Finance.<\/span><\/p>\n

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Other Headlines<\/b><\/h3>\n

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