The domestic equity benchmarks ended almost flat on Monday, with the benchmark Nifty 50 index settling below the 22,450 mark, a significant reversal from its intraday high of 22,588.80.
Volatility continued to grip the market, with the India VIX, a key volatility gauge, surging over 13%. PSU banks bled heavily, dropping over 3.6%, in reaction to the Reserve Bank of India's proposed stricter lending norms for infrastructure and development projects. Profit booking and valuation concerns also weighed on the broader market, leading to significant selling pressure across sectors.
Meanwhile, on the global front, weaker-than-expected US payroll data has fueled speculation of potential interest rate cuts by the Federal Reserve. Investors are keeping a close eye on speeches by US Fed officials this week, hoping to glean insights into the future trajectory of US monetary policy, which could have a significant impact on global markets, including India.
The S&P BSE Sensex, a barometer index, managed a marginal gain of 0.02%, closing at 73,895.54. However, the Nifty 50 index, representing the 50 largest companies, inched down by 0.15%, settling at 22,442.70.
Broader market indices fared worse. The S&P BSE Mid-Cap and Small-Cap indices fell by 0.95% and 1.06%, respectively.
Market breadth, a measure of advancing and declining stocks, was skewed negative, with 1207 stocks rising compared to 2726 falling shares.
Adding to the cautious mood, the India VIX, a volatility gauge for the National Stock Exchange (NSE), witnessed a sharp rise of 13.56%, reaching 16.60. This suggests that investors anticipate increased market volatility in the near future.
Economy:
The seasonally adjusted HSBC India Services Business Activity Index fell from 61.2 in March to 60.8 in April, highlighting one of the strongest growth rates seen in just under 14 years.
Meanwhile, the HSBC India Composite PMI Output Index moderated to 61.5 in April, from 61.8 in March, the latest reading was one of the highest seen in close to 14 years and signalled a substantial rate of expansion across the private sector.
On a separate note, India's foreign exchange reserves witnessed a decline for the third consecutive week, falling by $2.412 billion to $637.922 billion during the week ending April 26th. This decrease was primarily driven by a decline in foreign currency assets and gold reserves.
Numbers to Track:
The yield on India's 10-year benchmark federal paper shed 0.55% to 7.110 as compared with previous close 7.149.
In the foreign exchange market, the rupee is edged lower against the dollar. The partially convertible rupee was hovering at 83.5100, compared with its close of 83.4550 during the previous trading session.
MCX Gold futures for 5 June 2024 settlement added 0.81% to Rs 71,703.
The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.03% to 105.06.
The United States 10-year bond yield fell 0.53% to 4.474.
In the commodities market, Brent crude for July 2024 settlement fell 85 cents or 1.02% to $ 82.82 a barrel.
Global Markets:
Dow Jones index futures are currently up 124 points, indicating a strong opening for US stocks today.
Shares in Asia and Europe advanced on Monday, mirroring the positive sentiment in the US. This optimism stems from the possibility of a Fed rate cut. Japan and South Korean markets remained closed for a public holiday.
Investors are closely watching the Reserve Bank of Australia's rate decision scheduled for Tuesday. China's April trade data, due for release on Thursday, will also be closely monitored.
US stocks closed Friday on a high note after a weaker-than-expected jobs report for April. Investors interpreted this as a sign that the Fed might be more inclined to cut interest rates in the near future.
The U.S. economy added fewer jobs than expected in April while the unemployment rate rose. Nonfarm payrolls increased by 175,000 on the month. The unemployment rate ticked higher to 3.9%, compared to 3.8% in the prior month, according to the Bureau of Labor Statistics.
IPO Update:
The initial public offer (IPO) of Indegene received 4,80,93,837 bids for shares as against 2,88,66,677 shares on offer, according to stock exchange data at 17:00 IST on Monday (6 May 2024). The issue was subscribed 1.67 times.
The issue opened for bidding on 6 May 2024 and it will close on 8 May 2024. The price band of the IPO was fixed at Rs 430 to Rs 452 per share.
Buzzing Index:
The Nifty PSU Bank index fell 3.66% to 7,252.85, marking a decline of 4.63% in three consecutive trading sessions. This downward trend was led by Punjab National Bank (down 6.41%), Canara Bank (down 5.4%), Bank of Baroda (down 4%), and other PSU banks. The decline is attributed to the impact of RBI's draft circular proposing stricter guidelines on project financing, which would require banks to make provisions of up to 5% of the outstanding exposures during construction, which would then reduce to 2.5% once the asset becomes operational.
Stocks in Spotlight:
Titan Company dropped 7.18% after the company?s standalone net profit tumbled 24.42% to Rs 786 crore on 22.18% decrease in revenue from operations to Rs 10,047 crore for Q4 FY24 over Q3 FY24. For year on year basis, The Tata Group company reported 7.08% rise in standalone net profit and 17.47% jumped in revenue from operations for Q4 FY24 over Q4 FY23.
One 97 Communications (Paytm) hit a lower circuit of 5% after the company announced the resignation of Bhavesh Gupta, president and chief operating officer (COO) of the company effective from 31 May 2024,citing personal reasons.
Kotak Mahindra Bank jumped 5% after the bank reported 18% rise in standalone net profit to Rs 4,133 crore in Q4 FY24 from Rs 3,496 crore in Q4 FY23. Total income of the bank increased by 27% YoY to Rs 15,285.35 crore during the period under review.
Avenue Supermarts (Dmart) ended almost flat after its consolidated net profit jumped 22.41% to Rs 563.25 crore in Q4 FY24 as compared with Rs 460.13 crore in Q4 FY23. Revenue from operations increased 20.13% to Rs 12,726.55 crore in the quarter ended 31 March 2024.
Britannia Industries rallied 6.65%. The company said that its consolidated net profit declined 3.76% to Rs 536.61 crore in Q4 FY24 as compared with Rs 557.60 crore in Q4 FY23. Revenue from operations increased 5.45% to Rs 4,104.07 crore in the quarter ended 31 March 2024 as compared with Rs 3892.02 crore posted in the quarter ended 31 March 2023.
Mangalore Refinery & Petrochemicals (MRPL) dropped 8.75% after the company reported 40.41% decline in standalone net profit to Rs 1,136.84 crore in Q4 FY24 from Rs 1,907.98 crore recorded in Q4 FY23. Revenue from operations (excluding excise duty) fell marginally to Rs 25,328.67 crore in Q4 FY24 as compared to Rs 25,365.43 crore recorded in Q4 FY23.
Tata Technologies fell 3.77% after it reported a 7.63% decline in consolidated net profit to Rs 157.24 crore in Q4 FY24 as compared with Rs 170.22 crore in Q3 FY24. Revenue from operations rose marginally to Rs 1,301.05 crore in Q4 FY24 as compared with Rs 1,289.45 crore in Q3 FY24.
Kansai Nerolac Paints shed 0.23%. The paint major reported 8% rise in standalone net profit to Rs 102 crore on a 4% increase in net revenue to Rs 1,662 crore in Q4 FY24 as compared with Q4 FY23.
Inox Wind slipped 1.40%. The wind energy service provider reported a consolidated net profit (from continuing operations) of Rs 37.67 crore in Q4 FY24 as against a net loss of Rs 115.51 crore posted in Q4 FY23. Revenue from operations stood at Rs 527.73 crore in Q4 FY24, steeply higher than Rs 190.75 crore recorded in the corresponding quarter previous year.
Ujjivan Small Finance Bank shed 1.03%. The bank said that Reserve bank of India (RBI) has approved the appointment of Sanjeev Nautiyal as the managing director (MD) & chief executive officer (CEO) of the bank for the period of 3 years with effect from 1 July 2024.
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