The domestic equity benchmarks tumbled on Monday, tracking negative global cues. The decline was driven by a global market sell-off amid concerns about a potential slowdown in U.S. economic growth. The Nifty closed below the 24,100 level. All the sectoral indices on NSE ended in the red with metal, media and realty shares declining the most.
As per provisional closing, the barometer index, the S&P BSE Sensex slumped 2,222.55 points or 2.74% to 78,759.40. The Nifty 50 index tanked 662.10 points or 2.68% to 24,055.60.
The broader market underperformed the frontline indices. The S&P BSE Mid-Cap index dropped 3.60% and the S&P BSE Small-Cap index tumbled 4.21%.
The market breadth was weak. On the BSE, 670 shares rose and 3,408 shares fell. A total of 111 shares were unchanged.
The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, soared 42.23% to 20.37.
Economy:
The seasonally adjusted HSBC India Services Business Activity Index was at 60.3 in July, down only fractionally from 60.5 and above the neutral mark of 50.0 for the thirty-sixth straight month. The latest reading was more than six points higher than its long-run average and highlighted a substantial upturn in business activity.
The HSBC India Composite Output Index posted 60.7 in July, down only fractionally from 60.9 in June and above the crucial 50.0 no-change mark for the thirty-sixth month running. Hence, the latest reading signaled a continuation of the strong growth momentum seen recently. As has been the case since February, the manufacturing industry led the upturn.
Total new work rose sharply and at a pace that was considerably above its long-run average. Manufacturers experienced the stronger increase in new orders, despite a slowdown in its rate of expansion. Meanwhile, job creation remained solid across the two segments.
Worryingly, charged inflation climbed to a near 11-and-a-halfyear high in July amid stronger increases at goods producers and service providers. Input cost inflation also ticked higher in July, but remained below its long-run average. Manufacturing firms reported stronger cost pressures than their services counterparts.
India’s foreign exchange reserves registered a decline of $3.471 billion, reaching $667.386 billion during the week ended July 26, according to the latest data from the Reserve Bank of India (RBI).
Gold reserves fell by $2.297 billion to $57.695 billion during the week. Special drawing rights (SDRs) decreased by $5 million to $18.202 billion.
India’s reserve position with the International Monetary Fund (IMF) saw a modest increase of $2 million, reaching $4.612 billion in the reporting week.
IPO Update:
The initial public offer (IPO) of Ola Electric Mobility received 36,44,32,575 bids for shares as against 46,51,59,451 shares on offer, according to stock exchange data at 15:30 IST on Monday (05 August 2024). The issue was subscribed 0.78 times.
The issue opened for bidding on Friday (02 August 2024) and it will close on Tuesday (06 August 2024). The price band of the IPO is fixed between Rs 72 to Rs 76 per share. An investor can bid for a minimum of 195 equity shares and in multiples thereof.
The initial public offer (IPO) of Ceigall India received 28,31,79,500 bids for shares as against 2,23,13,663 shares on offer, according to stock exchange data at 15:30 IST on Monday (05 August 2024). The issue was subscribed 12.69 times.
The issue opened for bidding on Friday (01 August 2024) and it will close on Monday (05 August 2024). The price band of the IPO is fixed between Rs 380 to Rs 401 per share. An investor can bid for a minimum of 37 equity shares and in multiples thereof.
Buzzing Index:
The Nifty Metal index fell 4.85% to 8,862.50. The index tanked 8.07% in three consecutive trading sessions.
Jindal Stainless (down 7.98%), Hindustan Copper (down 7%), National Aluminium Company (down 6.83%), Steel Authority of India (down 6.76%), Tata Steel (down 5.66%), Hindustan Zinc (down 5.65%), Hindalco Industries (down 5.32%), NMDC (down 5.05%), Vedanta (down 4.97%) and Jindal Steel & Power (down 4.47%) tumbled.
Stocks in Spotlight:
Titan Company slipped 2.50% after the company reported marginal decline in standalone net profit to Rs 770 crore in Q1 FY25 as against Rs 777 crore posted in Q1 FY24. Revenue from operations jumped 9.92% year on year (YoY) to Rs 11,105 crore in the quarter ended 30 June 2024.
LIC Housing Finance tumbled 8.50% after the company's standalone net profit shed 1.77% to Rs 1,300.21 crore in Q1 FY25 as against with Rs 1,323.66 crore in Q1 FY24. Total income rose marginally to Rs 6,783.69 crore in June 2024 quarter from Rs 6,746.55 crore posted in same quarter last year.
Delhivery declined 2.34%. The logistics solution provider reported a consolidated net profit of Rs 54.36 crore in Q1 FY25 as against a net loss of Rs 89.48 crore posted in Q1 FY24. Revenue from operations grew by 12.57% year on year to Rs 2,172.3 crore in the quarter ended 30 June 2024.
Utkarsh Small Finance bank fell 2.76%. The bank’s standalone net profit jumped 27.81% to Rs 137.39 crore in Q1 FY25 as against Rs 107.49 crore recorded in Q1 FY24. Total income stood at Rs 1,070.56 crore in Q1 FY25, registering a growth of 31.78% from Rs 812.39 crore reported in the corresponding quarter previous year.
Mahindra & Mahindra Financial Services (Mahindra Finance) slipped 4.34%. The company recorded an overall disbursement of approximately Rs 4,530 crore in July 2024, delivering 3% year on year (YoY) growth.
Adani Ports and Special Economic Zone tumbled 5.38%. The company said that the company’s total cargo volume for the month of July 2024 was 37.3 MMT, which is higher by 9.7% as compared with the same period last year.
Suven Life Sciences declined 4.99% after its consolidated net loss stood at Rs 28.04 crore in Q1 FY25 as compared with a net loss of Rs 24.09 crore in Q1 FY24. Net sales slipped 73.42% year on year (YoY) to Rs 1.01 crore in the quarter ended 30 June 2024.
Gland Pharma fell 1.30% after the company said that the United States Food and Drug Administration (US FDA) has conducted an un-announced inspection of the company’s Pashamylaram Facility at Hyderabad for good manufacturing practices (GMP).The inspection was conducted between 25 July 2024 and 02 August 2024 and it was concluded with three Form 483 Observations.
Ashoka Buildcon declined 4.89%. The company said that it has emerged as the lowest bidder for two projects floated by Mumbai Metropolitan Region Development Authority (MMRDA) worth Rs 1,280.8 crore.
Global Markets:
Dow Jones Futures were down 614 points, indicating a weak opening in the US stocks today.
European and Asian markets plunged on Monday as fears of a deepening US recession gripped investors worldwide. Concerns that the Federal Reserve may be lagging in cutting interest rates exacerbated the sell-off.
Japan bore the brunt of the decline, with the Nikkei 225 and Topix indices plummeting as much as 7% in volatile trading.
The Reserve Bank of Australia is set to announce its interest rate decision today.
A weaker-than-expected US jobs report for July fueled recession fears, sending US stocks tumbling on Friday. The S&P 500 dropped 1.84%, the Nasdaq Composite lost 2.43%, and the Dow Jones Industrial Average fell 1.51%.
The report revealed that US nonfarm payrolls increased by only 114,000 in July, one of the weakest figures since the pandemic. Job growth was revised downward for the previous two months. The unemployment rate unexpectedly rose to 4.3%, surpassing the Federal Reserve’s year-end forecast and triggering a recession warning.
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