Market Commentary - End-Session
Benchmarks drop from 2nd day; Nifty slips below 21,550; Infy drops about 3% As on : 03-Jan-24  18:00

The domestic equity indices dropped on Wednesday, sliding for the second day in a row. The Nifty closed below the 21,550 mark, dragged by IT and metal shares. On the other hand, realty, PSU banks and pharma shares climbed. The cautious sentiment is attributed to the upcoming third quarter earnings season and a lack of fresh triggers, alongside concerns over stretched valuation. Moreover, concerns about global economic revival in 2024 arose due to feeble signals from China and Eurozone. Further, investors are eagerly anticipating the US Fed minutes for potential insights into future interest rate movements.

The barometer index, the S&P BSE Sensex, was down 535.88 points or 0.75% to 71,356.60. The Nifty 50 index shed 148.45 points or 0.69% to 21,517.35.

Infosys (down 2.92%), HDFC Bank (down 1.55%) and Reliance Industries (down 1.07%) were major drags.

The broader market outperformed the headline indices. The S&P BSE Mid-Cap index rose 0.20% and the S&P BSE Small-Cap index gained 0.30%.

The market breadth was positive. On the BSE, 2,137 shares rose and 1,706 shares fell. A total of 102 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, declined 3.30% to 14.10.

Economy:

The HSBC India Manufacturing Purchasing Managers? Index survey, conducted by S&P Global, fell to 18-month low of 54.9 in December as against 56 in November. Despite the fall, the HSBC India Manufacturing PMI was indicative of a marked improvement in the health of the sector.

The HSBC India Manufacturing PMI survey, conducted by S&P Global, showed the sector still expanding strongly in December despite a loss of growth momentum. There were softer, albeit sharp, increases in factory orders and output, while business confidence towards the year-ahead outlook strengthened.

Numbers to Track:

The yield on India's 10-year benchmark federal paper rose 0.10% to 7.216 as compared with previous close 7.206.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 83.3075, compared with its close of 83.3200 during the previous trading session.

MCX Gold futures for 5 February 2024 settlement shed 0.41% to Rs 62,996.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.20% to 102.41.

The United States 10-year bond yield rise 0.028% to 3.975.

In the commodities market, Brent crude for March 2024 settlement loss 0.39 cent or 0.51% to $75.50 a barrel.

Global Markets:

Markets in Europe and Asia dropped on Wednesday as investors processed important economic data. The initial market positivity driven by expectations of early interest rate cuts from central banks diminished in light of underwhelming economic indicators.

Traders are eagerly anticipating the release of the Federal Reserve's meeting minutes later on Wednesday, which will provide insight into the central bank's perspective on potential monetary easing.

US stocks retreated Tuesday, setting Wall Street up for a downbeat start to 2024 after a winning year that left the S&P 500 just short of a new record high. Tech stocks lost ground after Barclays analysts downgraded their rating on Apple's stock, citing concerns about demand for new iPhones.

Apple shares dropped on Tuesday, after Barclays cut the iPhone maker?s rating to underweight and trimmed its price target to $160 from $161.

The U.S. manufacturing sector shrank more than expected in December, according to a new purchasing manager?s index from S&P Global. The Manufacturing PMI came in at 47.9 in December, down from 49.4 in November.

Market focus is now on the Fed minutes for the December policy meeting due later in the day. The ISM survey on U.S. manufacturing is also due later on Wednesday, as well as job openings data, before a private payrolls report and jobless claims results on Thursday. The closely watched U.S. nonfarm payrolls report is due on Friday.

Adani-Hindenburg probe:

Adani Group shares surged after the Supreme Court dismissed the company's petition alleging a conflict of interest against the panel established by the court in March 2023 to investigate claims from the Hindenburg report.

Several Adani companies, including Adani Energy Solutions, Adani Total Gas, Adani Green Energy, Adani Power, Adani Wilmar, Adani Enterprises, and Adani Ports and Special Economic Zone (APSEZ), rose from 2% to 11%.

The Supreme Court ruled that there was no basis for transferring the case to the Central Bureau of Investigation (CBI) and urged SEBI to conclude its investigation within three months. Additionally, the Supreme Court emphasized its limited authority to intervene in the regulatory realm of the regulator concerning the Adani-Hindenburg case. The allegations against Adani Group stemmed from a comprehensive probe by Hindenburg, a US-based investment research firm specializing in activist short-selling, which made wide-ranging allegations of corporate malpractice after a two-year investigation into the Adani group companies. In August, SEBI submitted the investigation report to the court regarding the allegations against the Adani group.

Stocks in Spotlight:

Bajaj Auto jumped 4.91% after the firm informed that its board will mull a share buyback on Monday, 8 January 2024.

Hero MotoCorp declined 2.46%. The company dispatched 393,952 units of motorcycles and scooters in December 2023. The company sold 394,179 units in December 2022.

Avenue Supermarts (DMart) slipped 4.18%. The company's standalone revenue from operations for the quarter ended (QE) 31 December 2023 stood at Rs 13,247.33 crore. Revenue from operations for the quarter ended (QE) 31 December 2023 stood at Rs 11,304.58 crore.

Bank of Maharashtra rallied 4.16% after the bank?s gross advances stood at Rs 1,88,796 crore as of 31 December 2023, recording a growth of 20.28% as against Rs 1,56,962 crore as of 31 December 2022. The bank reported a 17.90% growth in total deposit to Rs 2,45,738 crore as of 31 December 2023 as against Rs 2,08,436 crore as of 31 December 2022

Yes Bank fell 1.42%. The bank reported a healthy 13.2% year-over-year (YoY) increase in deposits to Rs 241,831 crore as of 31 December 2023, compared to Rs 213,608 crore a year ago. This marks a 3.2% climb from Rs 234,360 crore reported at the end of September 2023.

Sun Pharmaceutical Industries added 0.13%. The company has acquired 100% of shares of Libra Merger., a company incorporated in Israel to facilitate consolidation of business in Israel.

Punjab National Bank (PNB) lost 0.57%. The bank said that its domestic deposits increased 9.14% to Rs 12,89,318 crore in Q3 FY24 as compared with Rs 11,81,361 crore in Q3 FY23. The bank's domestic advances stood at Rs 9,35,163 crore in Q3 FY24, up 13.9% year on year.

Glenmark Pharmaceuticals gained 1.05% after the firm launched a biosimilar of the anti‐diabetic drug, Liraglutide, for the first time in India, under the brand name Lirafit.

Rail Vikas Nigam (RVNL) advanced 2.46% after the company?s joint venture (JV), KRDCL-RVNL has received letter of acceptance (LoA) from CAO-CN-ERS-Engineering for redevelopment of Sivagiri Railway station, Kerala.

GAIL (India) declined 1.07%. The firm said that it has signed a term sheet with truAlt Bioenergy for equity participation in the latter's joint venture company Leafinti Bioenergy, the owner and the operator of India's second compressed biogas (CBG) plant.

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