Market Commentary - End-Session
Benchmarks close lower for 2nd day, dragged by auto, IT stocks As on : 16-Oct-24  17:38

Domestic equity benchmark indices continued their downward trend on Wednesday, closing lower for the second consecutive session. The Nifty 50 index settled below the 25,000 mark, primarily weighed down by losses in the auto and IT shares. However, realty, energy, and financial services stocks advanced.

Technically, the immediate support level for the Nifty is now at 24,900. The index breaking below this level could signal further weakness, potentially leading to a decline to 24,700. On the upside, 25,000 remains a strong resistance level. A decisive breakout above this level could indicate a potential reversal and a bullish trend in the market.

The S&P BSE Sensex declined 318.76 points or 0.39% to 81,501.36. The Nifty 50 index lost 86.05 points or 0.34% to 24,971.30.

Trent (down 4%), Mahindra & Mahindra (down 2.87%) and Infosys (down 2%) were major drags.

In the broader market, the S&P BSE Mid-Cap index shed 0.10% and the S&P BSE Small-Cap index rose 0.31%.

The market breadth was positive. On the BSE, 2,021 shares rose and 1,941 shares fell. A total of 106 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, rose 0.63% to 13.09.

Economy:

India's trade deficit or the gap between imports and exports was $20.78 billion during the month of September. The trade deficit narrowed from $29.7 billion a month back, according to data released on October 16, as merchandise export growth turned positive for the first time in three months. India's merchandise exports in September slightly rose to $34.58 billion against $34.41 billion a year ago. Imports increased by 1.6% to $55.36 billion in September compared to $54.49 billion in the year-ago period.

Numbers to Track:

The yield on India's 10-year benchmark federal paper rose 0.13% to 6.889 as compared with previous close 6.880.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 84.0100, compared with its close of 84.0425 during the previous trading session.

MCX Gold futures for 5 December 2024 settlement rose 0.39% to Rs 76,660.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.01% to 103.26.

The United States 10-year bond yield slipped 0.57% to 4.012.

In the commodities market, Brent crude for November 2024 settlement lost 41 cents or 0.55% to $73.84 a barrel.

Global Markets:

Most European shares declined as investors reacted to earnings season. Inflation in the U.K. dropped sharply to 1.7% in September, the Office for National Statistics said on Wednesday. The steep fall from the 2.2% print seen in August adds to expectations that the Bank of England will cut rates in November.

Asian stocks ended lower on Wednesday as investors will be watching for more stimulus measures to prop up the real estate sector in China with the country's housing minister set to hold a press briefing on Thursday, according to a statement from the state council information office.

Regional markets followed Wall Street's lead, where a drop in chipmaking stocks pulled U.S. benchmarks from record highs. At the close in NYSE, the Dow Jones Industrial Average lost 0.75%, while the S&P 500 index fell 0.76%, and the NASDAQ Composite index lost 0.98%.

ASML, a major supplier of chipmaking equipment, provided disappointing sales guidance for 2025, citing softer demand in non-AI sectors. Its U.S. shares plummeted 16% overnight.

NVIDIA, a market darling, fell 4.5%, while AMD and Intel declined by 5.2% and 3.3%, respectively. All three stocks stabilized after the market closed.

Stocks in Spotlight:

Bajaj Auto gained 0.85%. The auto maker's profit after tax 9% to Rs 2,005 crore on 22% increase in revenue from operations to Rs 13,127 crore in Q2 FY25 over Q2 FY24. The revenue was underpinned by double digit volume growth on the back of yet another robust domestic performance and a steady recovery of exports, further buoyed by a richer sales mix.

L&T Technology Services rose 0.61%. The company's net profit stood at Rs 319.6 crore, up 1.3% YoY. Its revenue was at Rs 2572.9 crore, a growth of 4.5% QoQ growth of 8% YoY. USD revenue was at $307 million, a growth of 3.9% QoQ and 6.5% YoY.

UltraTech Cement fell 0.71%. The cement major announced the commissioning of an additional 1.2 mtpa grinding capacity at its existing unit situated at Arakkonam, Tamil Nadu. This addition in capacity forms part of the 22.6 mtpa capacity expansion announced in June, 2022, as informed earlier by our letter dated 2nd June, 2022. As a result, the company's total cement capacity has reached 156.06 mtpa.

Larsen & Toubro (L&T) shed 0.60%. The company said that the company's heavy civil infrastructure vertical has secured a 'significant' order from Uttar Pradesh Metro Rail Corporation (UPMRCL) for the design and construction of Agra Metro Phase 1, Line-2.

Rallis India soared 12.70% after the company reported 19.51% increase in net profit to Rs 98 crore in Q2 FY25 as against Rs 82 crore posted in Q2 FY24. Revenue from operations jumped 11.53% year on year (YoY) to Rs 928 crore in the quarter ended 30 September 2024.

KEI Industries dropped 6.52%. The company reported 10.41% increase in consolidated net profit to Rs 154.81 crore in Q2 FY25 as against Rs 140.21 crore posted in Q2 FY24. Revenue from operations jumped 17.21% year on year (YoY) to Rs 2,279.65 crore in Q2 FY25.

Strides Pharma Science jumped 3.79% after the firm said that its associate company, OneSource Specialty Pharma received commitment for raising Rs 801 crore ($95 million) from investors, in the pre-listing round.

Sunteck Realty fell 0.19%. The company said that it has recorded 32.66% increase in pre-sales to Rs 524 crore in Q2 FY25 from Rs 395 crore in Q2 FY24.

Akums Drugs and Pharmaceuticals rallied 5% after the company announced that it has entered into a license & distribution agreement with Triple Hair Inc, a company incorporated in New Brunswick, Canada.

BEML jumped 4.05% after the company received a contract worth Rs 866.87 from Integral Coach Factory (ICF), Chennai for design, manufacturing, and commissioning of two high-speed trainsets, each comprising eight cars.

PNC Infratech jumped 4.41% after the company received letters of acceptance from the Maharashtra State Road Development Corporation (MSRDC) for road projects on EPC mode aggregating to Rs 4,630 crore.

Ashoka Buildcon advanced 2.07% after the civil construction company received letter of acceptance (LoA) for projects totalling to Rs 1,126.58 crore from the Brihanmumbai Municipal Corporation (BMC).

RailTel Corporation of India surged 7.51% after the company informed that it has received work order from Maharashtra Housing and Area Development Authority (MHADA) amounting to Rs 79.84 crore.

IPO Update:

The initial public offer (IPO) of Hyundai Motor India received bids for 4,17,21,442 shares as against 9,97,69,810 shares on offer, according to stock exchange data at 17:00 IST on Wednesday (16 October 2024). The issue was subscribed 0.42 times.

The issue opened for bidding on Tuesday (15 October 2024) and it will close on Thursday (17 October 2024). The price band of the IPO is fixed between Rs 1,865 to Rs 1,960 per share. An investor can bid for a minimum of 7 equity shares and in multiples thereof.

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