Market Commentary - End-Session
Equities roar back on NDA's ascent, banks & FMCG lead surge As on : 05-Jun-24  17:45

The domestic stock market staged a comeback today, clawing back most of Tuesday's losses. Buoyed by the NDA's promise to form a government, the Nifty surged past 22,600 with financials, autos and FMCG leading the charge. However, experts caution of continued volatility until the new cabinet is formed. The long-term outlook for Indian equities, however, remains positive.

In the barometer index, the barometer index, the S&P BSE Sensex was soared 2,303.19 points or 3.20% to 74,382.24. The Nifty 50 index surged 735.85 points or 3.36% to 22,620.35.

Adani Ports & SEZ (up 8.59%), HDFC Bank (up 4.62%) and ICICI Bank (up 3.31%) supported the indices.

In the broader market, The S&P BSE Mid-Cap index rallied 4.41% and the S&P BSE Small-Cap index added 2.93%.

The market breadth was strong. On the BSE, 2,597 shares rose and 1,221 shares fell. A total of 100 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, tanked 29.39% to 18.89.

The Reserve Bank of India?s (RBI) Monetary Policy Committee commenced its three-day meeting today, 5th June. The committee, responsible for setting the benchmark interest rate, will conclude on 7th June, with Governor Shaktikanta Das announcing the decision at 10 am.

Lok Sabha Elections:

The Lok Sabha elections 2024 concluded with the Election Commission of India declaring all results. Prime Minister Narendra Modi is set to form the government for a third consecutive term. The BJP emerged as the largest party, winning 240 out of 543 seats, while the Congress secured 99 seats. The BJP-led National Democratic Alliance (NDA) won 293 seats, and the Opposition INDIA alliance obtained 232 seats. Despite significant losses in three Hindi heartland states, the NDA secured a majority in the Lok Sabha after a fiercely contested election.

Economy:

The seasonally adjusted HSBC India Services Business Activity Index remained comfortably above the neutral mark of 50.0 in May, highlighting a sharp upturn in output. That said, the headline figure fell from 60.8 in April to 60.2, its lowest mark since last December.

The HSBC India Composite Output Index slipped from 61.5 in April to 60.5 in May, highlighting the slowest rate of expansion since last December. There were softer increases in both factory production and services activity.

Numbers to Track:

The yield on India's 10-year benchmark federal paper shed 0.13% to 7.024 as compared with previous close 7.025.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 83.3750, compared with its close of 83.5100 during the previous trading session.

MCX Gold futures for 5 June 2024 settlement was up 0.04% to Rs 71,819.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.21% to 104.33.

The United States 10-year bond yield added 0.30% to 4.344.

In the commodities market, Brent crude for August 2024 settlement fell 13 cents or 0.17% to $77.39 a barrel.

Global Markets:

European market advanced as investors awaiting the European Central Bank?s latest policy meeting on Thursday. Meanwhile, Asian stocks ended lower on Wednesday.

US stocks rose slightly on Tuesday after data showed a weaker-than-expected labor market, which investors believe will lead the Federal Reserve to cut interest rates. The Dow Jones Industrial Average rose 0.36%, the S&P 500 gained 0.15%, and the Nasdaq Composite gained 0.17%.

According to the Bureau of Labor Statistics, US job openings decreased by 296,000, reaching 8.059 million on the last day of April. This marks the lowest level since February 2021 and signifies a decrease in labor market tightness.

IPO Update:

The initial public offer (IPO) of Kronox Lab Sciences received 78,54,49,390 bids for shares as against 66,99,000 shares on offer, according to stock exchange data at 17:00 IST on Wednesday (05 June 2024). The issue was subscribed 117.25 times.

The issue opened for bidding on Monday (3 June 2024) and it will close on Wednesday (5 June 2024). The price band of the IPO is fixed between Rs 129 to Rs 136 per share. An investor can bid for a minimum of 110 equity shares and in multiples thereof.

Stocks in Spotlight:

Tata Motors advanced 2.85% after the company said that its board has approved to set up a wholly-owned subsidiary namely TML Commercial Vehicles (TMLCVL).

Heritage Foods hit an upper limit of 20%, following Andhra Pradesh Chief Minister Chandrababu Naidu's victory in the recent Lok Sabha elections. The company's promoters - Bhuvaneswari Nara and Nara Lokesh - are the wife and son of Naidu respectively.

Vodafone Idea surged 14% after CARE Ratings upgraded the company's Long Term Bank Facilities from B+ to BB+, maintaining a stable outlook. Additionally, the Short Term Bank Facilities were upgraded from A4 to A4+.

Angel One rallied 4.42% after the company?s client base jumped 63.3% to 23.83 million in May 2024 as against 14.59 million recorded in May 2023.

State Bank of India (SBI) added 1.86% after the bank said that its board will meet on Tuesday, 11 June 2024 to consider raising funds through issuance of senior, unsecured notes via public offer and private placement methods.

Nazara Technologies rallied 4.10% after the company announced that its subsidiary Absolute Sports will acquire all the assets of SoapCentral.com, a US entertainment content provider, for a cash consideration of Rs 11.6 crore.

Indian Oil Corporation (IOCL) rallied 3.08% after the company announced that it has signed a joint venture agreement with Sun Mobility, Singapore to form a company for battery swapping business in India.

Avenue Supermarts surged 6.79% after CRISIL Ratings upgraded its rating on the long-term bank facilities of the company to 'CRISIL AAA/Stable? from 'CRISIL AA+/Positive?.

Hindalco Industries jumped 7.41%. The company?s wholly owned subsidiary Novelis Inc. announced the postponement of its initial public offering due to market conditions.

Knowledge Marine & Engineering Works (KMEW) surged 5.02% after the company announced the receipt of letter of award (LOA) from the Dredging Corporation of India for the capital dredging work at the Paradip Port.

Container Corporation of India (CONCOR) gained 4.79% after the company said that it has signed a memorandum of understanding (MoU) with Shipping Corporation of India (SCI) to provide seamless end to end logistics solution.

Delton Cables added 2.53% after the company announced that it has received an order of Rs 177.83 crore from Top EPC Companies under Revamped Distribution Sector Scheme (RDSS Scheme) for supply of power cables.

Shilpa Medicare soared 10.39% after the firm said that its wholly owned subsidiary, Shilpa Biologicals has filed its first Drug Master File (DMF) of recombinant Human Albumin 20% with the United States Food and Drug Administration.

GPT Infraprojects hit an upper circuit of 5% after the company announced that it has secured an order worth Rs 547 crore from Rail Vikas Nigam Limited (RVNL), which has to be executed on an engineering, procurement, and construction (EPC) mode.

KEC International rallied 3.43% after the company announced that it has secured new orders of Rs 1,002 crore in its civil business.

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