Market Commentary - End-Session
Sensex slides 353 pts, Nifty ends below 22,150; Asian Paints drops 4% As on : 26-Feb-24  17:37

The domestic stock market extended losses on Monday, dragged by select heavyweight stocks. The Nifty closed below the 22,150 mark, with demand evident in oil & gas, autos, and realty shares, while IT and metals shares declined. Although the bullish sentiment remains intact as long as the Nifty50 holds above the 21,000 level, concerns regarding tensions in the red sea, rate cut trajectory, and valuations pose key risks for the market. Uncertainty prevails regarding the timing of rate cuts, given that central banks have historically refrained from cutting interest rates when markets were at all-time highs.

The barometer index, the S&P BSE Sensex slipped 352.67 points or 0.48% to 72,790.13. The Nifty 50 index lost 90.65 points or 0.41% to 22,122.05.

Asian Paints (down 3.90%), Titan Company (down 1.95%) and Infosys (down 1.09%) were major drags.

In the broader market, The S&P BSE Mid-Cap index declined 0.38% and the S&P BSE Small-Cap index shed 0.06%.

The market breadth was negative. On the BSE, 1,710 shares rose and 2,268 shares fell. A total of 130 shares were unchanged.

The NSE's India VIX, a gauge of market's expectation of volatility over the near term, jumped 4.19% to 15.60.

Economy:

India's forex reserves decreased by $5.24 billion to $617.23 billion for the week ended 9th February 2024, as per RBI data, down from $622.5 billion the previous week. Despite this decrease, the reserves have increased by $50.28 billion in the current financial year 2023-24. The largest component, foreign currency assets, dropped by $4.07 billion to $546.52 billion, while the reserve position with the IMF declined by $28 million to $48.32 billion during the same week.

Numbers to Track:

The yield on India's 10-year benchmark federal paper shed 0.27% to 7.058 as compared with previous close 7.077.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 82.8900, compared with its close of 82.9175 during the previous trading session.

MCX Gold futures for 5 April 2024 settlement shed 0.11% to Rs 62,274.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.11% to 103.82

The United States 10-year bond yield slipped 0.42% to 4.242.

In the commodities market, Brent crude for April 2024 settlement gained 42 cents or 0.51% to $81.20 a barrel.

Global Markets:

Markets in Europe and Asia declined on Monday ahead of the release of a series of keenly-awaited inflation cues. Investors awaited the monthly personal consumption expenditures price index, the U.S Federal Reserve?s preferred inflation gauge, which is due on Thursday.

Meanwhile, Inflation reports from Germany , France and Spain are due on Thursday, ahead of the main release.

Japan's Nikkei 225 index hit a fresh record high Monday as traders returned from a long weekend.

In US, the S&P 500 and Dow Jones Industrial Average eked out record closing high on Friday, as artificial intelligence stocks had enough steam to keep the rally chugging along.

Meanwhile, Federal Reserve Bank of New York President John Williams reportedly said in an interview published Friday that the economy is headed in the right direction, and it will likely be appropriate to cut rates later this year.

Stocks in Spotlight:

Alkem Laboratories dropped 6.63% on reports that the income tax department's investigation into pharma major has found large-scale tax evasion by the company.

Last September, the income tax department surveyed Alkem Laboratories' offices due to suspected tax evasion. The investigation reportedly revealed alleged excessive deductions totaling over Rs 1,000 crore, particularly from manufacturing units in Sikkim. Additionally, the company made substantial payments to doctors for prescriptions, amounting to hundreds of crores. These findings may result in significant penalties for Alkem Labs, the media reports suggested.

Larsen & Toubro advanced 2.36% after the civil construction firm?s construction arm secured a 'significant order' for its Railways Strategic Business Group, to construct the Jakarta Mass Rapid Transit (MRT) project (phase 2A).

Kotak Mahindra Bank shed 1.05%. In respect of the proposed acquisition of the shares of Kotak Mahindra General Insurance Company (Kotak General) by Zurich Insurance Company (Zurich), the parties to the aforesaid transaction, viz., the Bank, Zurich and Kotak General have mutually agreed that Zurich will acquire 70% stake in Kotak General by way of a combination of primary and secondary acquisitions in a single tranche, for a total consideration of approximately Rs 5,560 crore.

Piramal Pharma shed 0.26%. The pharma major said that US Food and Drug Administration (USFDA) conducted a pre-approval inspection (PAI) at its Lexington facility, USA. The inspection was conducted from 20 February to 23 February, 2024 at Lexington facility, USA. At the end of inspection, USFDA issued Form-483 with 2 observations.

Transformers and Rectifiers (India) hit an upper circuit of 5% after the company said that it has received an order worth Rs 232 crore from Power Grid Corporation of India.

SJVN advanced 1% after the company said that its wholly owned subsidiary, SJVN Green Energy has signed a power usage agreement (PUA) with Jammu & Kashmir Power Corporation (JKPCL) for 300 megawatt (MW) solar power capacity.

Gensol Engineering rose 1.71% after the company announced the award of two significant EPC contracts, underscoring our commitment to India's renewable energy sector.

Aditya Birla Capital rose 1.15% after the company announced that it has made an investment of Rs 50 crore in its wholly owned subsidiary, Aditya Birla Capital Digital (ADBCDL) on right basis.

SBEC Sugar hit an upper circuit of 10% after the company announced that it has repaid its entire loan of Rs 201 crore along with interest thereon taken from the U.P. Co-operative Bank.

Rain Industries tanked 8% after the company reported a net loss of Rs 1,118.75 crore in Q4 FY23 as against net profit of Rs 89.52 crore in Q4 FY22. Revenue from operations declined 24.85% to Rs 4,100.58 crore in Q4 FY23 from Rs 5,456.81 crore recorded in the corresponding quarter previous year.

Skipper rose 3.4% after the company received an order worth Rs 737 crore from Power Grid Corporation of India to construct transmission line. The order includes design, supply and construction of new 765 kV transmission line.

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