Market Commentary - End-Session
Sensex tanks 930 pts, Nifty ends below 24,500; RIL, M&M drop As on : 22-Oct-24  17:15

The domestic equity benchmarks suffered a sharp decline on Tuesday, extending the previous day's losses. The broader market slumped due to weak global cues and poor sectoral performance. The Nifty50 settled below the 24,500 mark amid widespread selling pressure, with PSU banks and metal shares witnessing major selling. Technical indicators suggest a bearish trend, with the Nifty breaking below its 20-week average.

The barometer index, the S&P BSE Sensex declined 930.55 points or 1.15% to 80,220.72. The Nifty 50 index declined 309 points or 1.25% to 24,472.10.

Adani Enterprises (down 3.81%), Mahindra & Mahindra (down 3.79%) and Reliance Industries (down 1.86%) were major drags.

In the broader market, the S&P BSE Mid-Cap index dropped 2.52% and the S&P BSE Small-Cap index tumbled 3.81%.

The market breadth was weak. On the BSE, 560 shares rose and 3,425 shares fell. A total of 74 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, jumped 4.21% to 14.34.

Economy:

The RBI article finds that monetary policy changes in India have a greater impact on short-term interest rates than long-term rates. While anticipated policy changes have little immediate effect on long-term rates, unexpected policy surprises significantly impact all market segments and tenors. However, the impact of policy signals diminishes over time, fading after three years.

Policy surprises also have a notable, albeit smaller, impact on the exchange rate and equity prices. In terms of the real economy, the policy rate tightening since May 2022 has significantly reduced inflation expectations. The long-run elasticity of the policy rate with respect to inflation expectations demonstrates that an increase in the policy rate effectively anchors expectations.

The article concludes that the 250 basis points increase in the policy rate since May 2022 has negatively contributed to both aggregate demand and headline inflation by 160 basis points each up to Q2:2024-25, working through various channels of policy transmission.

Numbers to Track:

The yield on India's 10-year benchmark federal paper advanced 1.73% to 6.955 as compared with previous close 6.950.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 84.0800, compared with its close of 84.0750 during the previous trading session.

MCX Gold futures for 5 December 2024 settlement rose 0.39% to Rs 78,830.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.09% to 103.92.

The United States 10-year bond yield gained 0.43% to 4.205.

In the commodities market, Brent crude for December 2024 settlement added 62 cents or 0.83% to $74.91 a barrel.

Global Markets:

The Dow Jones index futures were down 183 points, indicating a weak opening in the US stocks today.

European stocks declined on Tuesday as investors assessed earnings from bellweather firms across the region.

Asian shares ended mixed on Tuesday. In Japan, investors await general elections and a Bank of Japan (BoJ) meeting at the end of October. Tokyo's inflation data, due later this week, will likely influence expectations for Japanese interest rates.

Wall Street's retreat from record highs also weighed on regional sentiment. Rising Treasury yields and the looming earnings season contributed to the S&P 500's 0.18% decline. The Dow Jones Industrial Average fell 0.8%, while the NASDAQ Composite gained 0.27%.

NVIDIA Corporation's 4% surge to a new all-time high, boosting its market cap above $3.5 trillion, helped mitigate broader market losses as investors anticipated the start of big tech earnings season.

With the U.S. presidential elections less than two weeks away, investors were keenly focused on that event. Additionally, a series of major U.S. corporate earnings reports were expected to shape market sentiment.

In the Middle East, Israel's ongoing offensive against Hamas and Hezbollah continued to garner significant attention. Concerns about a potential Israeli strike on Iran also remained prominent.

Stock in Spotlight:

Zomato fell 3.58%. The food delivery platform reported 389% jump in net profit from Rs 36 crore in Q2FY24 to Rs 176 crore in Q2FY25. The company's revenue during the same time increased 69% from Rs 2,848 crore to Rs 4,799 crore as more customers ordered in. On a quarterly basis, the company's operating revenues increased from Rs 4,206 crore in Q1FY25 to Rs 4,799 crore in Q2FY25.

Ambuja Cements fell 2.42%. The company said that it has signed a binding agreement for the acquisition of Orient Cement (OCL) at an equity value of Rs 8,100 crore. Ambuja will acquire 46.8% shares of OCL from its current promoters and certain public shareholders. The acquisition will be fully funded through internal accruals.

HFCL tumbled 7.48%. The telecom gear maker's consolidated net profit rose 4.50% to Rs 73 crore on 1.61% decline in revenue to Rs 1094 crore in Q2 September 2024 over Q2 September 2023.

City Union Bank surged 11.77% after the private sector bank's net profit rose 1.62% to Rs 285.17 crore on 11.71% jumped in total income to Rs 1,660.26 crore in Q2 FY25 over Q2 FY24.

Lemon Tree Hotels slipped 4.47%. The company announced the signing of a new property in Kalaburagi, Karnataka. The hotel, to be managed by Carnation Hotels, is expected to open in fiscal year 2027.

Mahindra Logistics declined 5.30%. The company's consolidated net loss narrowed to Rs 10.75 crore in Q2 FY25 as against a net loss of Rs 15.93 crore posted in Q2 FY24. Revenue from operations grew by 11.45% to Rs 1,521.10 crore in Q2 FY25 as compared to Rs 1,364.76 crore recorded in Q2 FY24.

Spectrum Foods fell 1.85% after the company signed non-binding letter of intent with InterContinental Hotels Group (IHG) for the management and branding of their upcoming 5-star resort in Pushkar, Rajasthan.

Cyient DLM dropped 5.33%. The company reported consolidated net profit of Rs 15.50 crore in Q2 FY25, up 5.44% as against Rs 15.50 crore posted in Q2 FY24. Revenue from operation was at Rs 389.40 crore in Q2 FY25, registering a growth of 33.44% year on year.

Union Bank of India slipped 2.10%. The bank's standalone net profit jumped 34.41% to Rs 4,719.74 crore on 13.27% increase in total income to Rs 32036.46 crore in Q2 FY25 over Q2 FY24.

One 97 Communications (Paytm) declined 5.31%. The company reported profit after tax (PAT) of Rs 930 crore in Q2 FY25, including exceptional gain of Rs 1,345 crore on account of sale of entertainment ticketing business. The company reported net loss of Rs 292 crore in Q2 FY24 and a net loss of Rs 840 crore Q1 FY25. The company's operating revenue for Q2 FY25 reached Rs 1,660 crore, marking an impressive 11% quarter-over-quarter (QoQ) increase. The contribution margin expanded to 54%, up from 50.44% in the previous quarter. This translated to a contribution profit of Rs 894 crore, a substantial 18% QoQ growth.

New Listing:

Shares of Hyundai Motor India closed at Rs 1820.40 on the BSE, a discount of 7.12% over its issue price of Rs 1960.

The scrip was listed at Rs 1931, at a 1.48% discount to its issue price. The stock has hit a high of Rs 1968.80 and a low of Rs 1807.05 during the day. Over 15.87 lakh shares of the company changed hands at the counter.

IPO Update:

The initial public offer (IPO) of Deepak Builders & Engineers India received bids for 10,75,78,932 shares as against 89,67,061 shares on offer, according to stock exchange data at 17:00 IST on Tuesday (22 October 2024). The issue was subscribed 12 times.

The issue opened for bidding on Monday (21 October 2024) and it will close on Wednesday (23 October 2024). The price band of the IPO is fixed between Rs 192 to Rs 203 per share. An investor can bid for a minimum of 73 equity shares and in multiples thereof.

Waaree Energies' IPO received bids for 18,49,67,316 shares as against 2,10,79,384 shares on offer, according to stock exchange data at 17:00 IST on Tuesday (22 October 2024). The issue was subscribed 8.77 times.

The issue opened for bidding on Monday (21 October 2024) and it will close on Wednesday (23 October 2024). The price band of the IPO is fixed between Rs 1,427 to Rs 1,503 per share. An investor can bid for a minimum of 9 equity shares and in multiples thereof.

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