Market Commentary - End-Session
Sensex tanks 723 pts, Nifty ends below 21,750; private banks drag As on : 08-Feb-24  18:13

The domestic equity market experienced deep losses on Thursday, ending a two-day gaining streak. The Nifty50 closed below the 21,750 mark after reaching a high of 22,011.05 earlier in the day. Private banks and heavyweights like ITC saw steep selloff. The volatility was triggered by the Reserve Bank of India's decision to maintain key interest rates, putting pressure on interest rate-sensitive sectors such as banks, financial services, and autos. Uncertainty surrounding potential interest rate reduction weighed on sentiment. However, some losses were offset by strength in IT and oil & gas stocks.

The S&P BSE Sensex tumbled 723.57 points or 1% to 71,428.43. The Nifty 50 index declined 212.55 points or 0.97% to 21,717.95.

ITC (down 4.04%), ICICI Bank (down 3.34%) and HDFC Bank (down 1.84%) were major drags.

In the broader market, the S&P BSE Mid-Cap index rose 0.08% and the S&P BSE Small-Cap index shed 0.44%.

The market breadth was negative. On the BSE, 1,575 shares rose and 2,274 shares fell. A total of 96 shares were unchanged.

The NSE's India VIX, a gauge of market's expectation of volatility over the near term, rose 2.07% to 15.83.

RBI Policy Outcome:

The Reserve Bank of India (RBI) monetary policy committee (MPC) voted to keep the repo rate unchanged at 6.5%. Consequently, the standing deposit facility (SDF) rate remains unchanged at 6.25% and the marginal standing facility (MSF) rate and the Bank Rate at 6.75%.

The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth. The MPC will remain resolute in its commitment to aligning inflation to the target.

These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%, while supporting growth.

The real GDP growth for 2023-24 is projected at 7.3%, higher than previous forecast of 7%. The CPI inflation for 2023-24 is projected at 5.4%, in line with the previous forecast.

Meanwhile, the real GDP growth for 2024-25 is projected at 7%. Assuming a normal monsoon next year, CPI inflation for 2024-25 is projected at 4.5%.

Five out of six members of the MPC voted to keep the policy repo rate unchanged. One member, Prof. Jayanth R. Varma, voted to reduce the policy repo rate by 25 basis points.

Numbers to Track:

The yield on India's 10-year benchmark federal paper rose 0.04% to 7.077 as compared with the previous close of 7.074.

In the foreign exchange market, the rupee was flat against the dollar. The partially convertible rupee was hovering at 82.96, same as the previous close.

MCX Gold futures for 5 April 2024 settlement shed 0.01% to Rs 62,519.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.01% to 104.04.

The United States 10-year bond yield rose 0.29% to 4.112.

In the commodities market, Brent crude for March 2024 settlement rose 39 cents or 0.49% to $79.60 a barrel.

Global Markets:

Most shares in Europe advanced while Asian stocks ended mixed on Thursday.

China's consumer prices fell for a fourth consecutive month in January while factory-gate prices declined at a slower pace, the National Bureau of Statistics data showed on Thursday. The country's consumer price index, a main gauge of inflation, dropped by 0.8% year-on-year in January, the NBS said, after a 0.3% decline in December. China's producer price index, which gauges factory-gate prices, dropped by 2.5% from a year ago in January, following a 2.7% fall in December, the NBS said.

US stocks advanced on Wednesday as strong earnings offset jitters related to US regional banks and China's markets.

Stocks in Spotlight:

Power Grid Corporation of India rallied 3.08% after the company's consolidated net profit rose 10.50% to Rs 4,028.25 crore in Q3 FY24 as compared with Rs 3,645.29 crore posted in corresponding quarter last year. Revenue from operations rose 2.56% YoY to Rs 11,549.79 crore in the quarter ended 31 December 2023.

Tata Consultancy Services (TCS) added 1.28% after the company said that it has entered into a strategic partnership with Enento Group for transforming the latter?s IT applications, cloud, digital workplace, and IT security for resilient business operations.

Tata Consumer Products declined 2.37% after the company reported 20.72% declined in consolidated net profit to Rs 278.87 crore in Q3 FY24 as against Rs 351.76 crore recorded in Q3 FY23. Revenue from operations rose 9.48% to Rs 3,803.92 crore in Q3 FY24 from Rs 3,474.55 crore recorded in the corresponding quarter previous year.

Lupin added 0.65% after the company's consolidated net profit jumped 292.6% to Rs 618.7 crore in Q3 FY24 as compared with Rs 157.6 crore posted in corresponding quarter last year. Revenue from operations rose 20.2% YoY to Rs 5197.4 crore in the quarter ended 31 December 2023 from Rs 4322.2 crore in the quarter ended 31 December 2023.

Parag Milk Foods (PMFL) jumped 6.49% after the company reported a consolidated net profit of Rs 34.16 crore in Q3 FY24, which is nearly four times as compared with the PAT of Rs 9.26 crore recorded in Q3 FY23. Revenue during the quarter rose by 8.8% YoY to Rs 800.84 crore.

Cummins India soared 7.77% after the company?s standalone net profit grew 26.32% to Rs 454.92 crore during Q3 FY24 as compared with Rs 360.14 crore posted in same period a year ago Revenue from operations increased 16.68% YoY to Rs 2,501.81 crore in the December 2023 quarter.

Sobha declined 2.88% after the real estate developer?s consolidated net profit dropped 52.58% to Rs 15.08 crore in Q3 FY24 as against Rs 31.80 crore posted in Q3 FY23. Revenue from operations fell 21.10% to Rs 684.93 crore in Q3 FY24 from Rs 868.16 crore recorded in the corresponding quarter previous year.

Page Industries added 1.28% after the company reported 23.13% increase in net profit to Rs 152.35 crore on 2.4% rise in revenue from operations to Rs 1,228.77 crore in Q3 FY24 over Q3 FY23.

Garware Hi-Tech Films (GHFL) hit an upper circuit of 20% after the company?s consolidated net profit surged 83.8% to Rs 55.88 crore on 39.9% increase in revenue from operations to Rs 453.62 crore in Q3 FY24 over Q3 FY23.

Venky's (India) tumbled 7.16% after the company reported a net loss of Rs 7.94 crore in Q3 FY24 as against a net profit of Rs 16.53 crore in Q3 FY23. Revenue from operations fell by 8% YoY to Rs 953.17 crore during the quarter.

IPO Update:

The IPO of Capital Small Finance Bank received bids for 97,15,520 shares as against 81,47,373 shares on offer, according to stock exchange data at 17:00 IST on Thursday (8 February 2024). The issue was subscribed 1.19 times.

The issue opened for bidding on Wednesday (7 February 2024) and it will close on Friday (9 February 2024). The price band of the IPO is fixed at Rs 445-468 per share. An investor can bid for a minimum of 32 equity shares and in multiples thereof.

The IPO of Jana Small Finance Bank received bids for 1,85,40,108 shares as against 1,01,16,284 shares on offer, according to stock exchange data at 17:00 IST on Thursday (8 February 2024). The issue was subscribed 1.83 times.

The issue opened for bidding on Wednesday (7 February 2024) and it will close on Friday (9 February 2024). The price band of the IPO is fixed at Rs 393-414 per share. An investor can bid for a minimum of 36 equity shares and in multiples thereof.

The IPO of Rashi Peripherals received bids for 4,53,93,936 shares as against 1,42,37,289 shares on offer, according to stock exchange data at 17:00 IST on Thursday (8 February 2024). The issue was subscribed 3.19 times.

The issue opened for bidding on Wednesday (7 February 2024) and it will close on Friday (9 February 2024). The price band of the IPO is fixed at Rs 295-311 per share. An investor can bid for a minimum of 48 equity shares and in multiples thereof.

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