Market Commentary - End-Session
Sensex drops 384 pts, Nifty holds 22,300, VIX crosses 17 mark As on : 07-May-24  17:40

The benchmarks equity indices ended with major losses on Tuesday, bucking positive global cues. The Nifty 50 index settled near 22,300 after reaching an intraday high of 22,499.05. Several factors contributed to the decline. Recent corporate earnings reports, lacking in significant positive surprises, failed to impress investors. Additionally, lower-than-expected voter turnout in the ongoing elections has raised concerns about the outcome, fostering investor caution. Further, some investors are choosing to take profits after the recent market rally, potentially due to valuations perceived as high. Finally, the delay in a potential US Federal Reserve rate cut and persistent global inflation are contributing to a risk-averse investor sentiment. This cautiousness is reflected in the sectoral performance. While FMCG and IT stocks witnessed buying, realty, metals, and PSU banks experienced a slump.

The barometer index, the S&P BSE Sensex slipped 383.69 points or 0.52% to 73,511.85. The Nifty 50 lost 140.20 points or 0.62% to 22,302.50.

ICICI Bank (down 1.48%), Reliance Industries (down 1.23%) and HDFC Bank (down 1.08%) were major drags.

The broader indices slumped. The S&P BSE Mid-Cap index dropped 1.90% and the S&P BSE Small-Cap index fell 1.65%.

The market breadth was weak. On the BSE, 1034 shares rose and 2794 shares fell. A total of 104 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, rose 2.45% to 17.01.

Politics:

The Lok Sabha elections entered their third phase today, 7 May 2024, with voting in 96 parliamentary constituencies across 12 states such as Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Uttar Pradesh, and West Bengal. The BJP is seeking a third consecutive term, facing opposition from a coalition named the Indian National Developmental Inclusive Alliance (INDIA), which includes the Congress party. This round is part of a seven-phase election process running from April 19 to June 1, with the final election results scheduled to be revealed on June 4.

Numbers to Track:

The yield on India's 10-year benchmark federal paper rose 0.30% to 7.129 as compared with previous close 7.108.

In the foreign exchange market, the rupee is edged higher against the dollar. The partially convertible rupee was hovering at 83.5100, compared with its close of 83.5200 during the previous trading session.

MCX Gold futures for 5 June 2024 settlement fell 0.38% to Rs 71,100.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.19% to 105.25.

The United States 10-year bond yield fell 0.58% to 4.461.

In the commodities market, Brent crude for July 2024 settlement declined 27 cents or 0.32% to $ 83.06 a barrel.

Global Markets:

Asian and European stocks rallied on Tuesday, with indexes in Japan, South Korea, and Australia extending gains. This followed positive earnings reports from several tech companies in Q1 and the Reserve Bank of Australia's dovish stance, which reinforced bets that it will not raise rates further in 2024. The positive sentiment mirrored Wall Street's performance on Monday, where U.S. stocks closed higher on expectations of a Federal Reserve rate cut later this year.

IPO Update:

The initial public offer (IPO) of Indegene received 21,20,23,944 bids for shares as against 2,88,66,677 shares on offer, according to stock exchange data at 17:00 IST on Tuesday (7 May 2024). The issue was subscribed 7.34 times.

The issue opened for bidding on Monday (06 May 2024) and it will close on Wednesday (08 May 2024). The price band of the IPO is fixed at Rs 430 to Rs 452 per share. An investor can bid for a minimum of 33 equity shares and in multiples thereof.

Stocks in Spotlight:

BPCL (-0.98%) and HPCL (+0.12%) will consider issuing bonus shares on May 9th.

Lupin slipped 4.12%. The pharma major?s consolidated net profit surged 52.33% to Rs 359.43 crore in the quarter ended March 2024 as against Rs 235.96 crore during the previous quarter ended March 2023. Sales jumped by 13.04% to Rs 4,895.11 crore in the quarter ended March 2024 as against Rs 4330.30 crore during the previous quarter ended March 2023.

Godrej Consumer Products rallied 5.70%. The company reported consolidated net loss of Rs 1,893.21 crore in the quarter ended March 2024 as against net profit of Rs 452.14 crore during the previous quarter ended March 2023. Sales rose 6.08% to Rs 3,365.11 crore in the quarter ended March 2024 as against Rs 3,172.21 crore during the previous quarter ended March 2023.

Uttam Sugar Mills tumbled 5.44% after the company reported -39.8% drop in net profit to Rs 42.14 crore in Q4 FY24 from Rs 70 crore in Q4 FY23. Net sales declined 11.8% year-over-year (YoY) to Rs 465.15 crore in the fourth quarter.

Prudent Corporate Advisory Services declined 2.09%. The financial products distributor's consolidated net profit rose 8.1% to Rs 44.57 crore on 35.45% jump in revenue from operations to Rs 239.7 crore in Q4 FY24 over Q4 FY23.

Route Mobile dropped 5.11% after the company?s consolidated net profit fell 13.3% to Rs 88.10 crore in Q4 FY24 as compared with Rs 105.74 crore posted in Q3 FY24. Revenue from operations increased 0.83% YoY to Rs 1017.03 crore in Q4 FY24.

Gujarat Fluorochemicals slipped 4.33% after the company?s consolidated net profit tumbled 69.58% to Rs 100.97 crore in Q4 FY24 as against Rs 331.88 crore recorded in Q4 FY23. Revenue from operations fell 23% year on year (YoY) to Rs 1,133.03 crore in quarter ended 31 March 2023.

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