Domestic equity barometers ended with small losses on Thursday, sliding for the second consecutive session. The Nifty 50 index settled below the 18,500 level after hitting a day's high of 18,580.30 in early trade. Trading was volatile due to the expiry of weekly index options on the National Stock Exchange (NSE). Realty, pharma and healthcare stocks advanced, while banks financial stocks were under pressure.
The market undercurrent was bullish as investors welcomed the news that the US Congress had passed a bill to suspend the federal debt ceiling. The bill, which was passed by the Senate on Wednesday, will avert a potential default by the US government.
The barometer index, the S&P BSE Sensex declined 193.70 points or 0.31% at 62,428.54. The Nifty 50 index fell 46.65 points or 0.25% at 18,487.75.
Kotak Mahindra Bank (down 3.31%), ICICI Bank (down 1.31%) and ITC (down 1.24%) were major drags.
The broader market outperformed the frontline indices. The S&P BSE Mid-Cap index rose 0.11% while the S&P BSE Small-Cap index gained 61%.
The market breadth was positive. On the BSE, 2,078 shares rose and 1,458 shares fell. A total of 125 shares were unchanged.
The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, shed 3.13% to 11.60.
Economy:
The Indian economy is showing signs of recovery, with GDP growth picking up in Q4FY23 and the fiscal deficit narrowing. The manufacturing sector is also doing well, with the PMI index reaching a 2-year high in May.
India's GDP growth rate for Q4FY23 was 6.1%, which is higher than the previous quarter's growth rate of 4.4%. The overall GDP growth rate for FY23 was 7.2%, which is higher than the government's revised estimate of 7%. However, the FY23 growth rate is lower than the 9.5% growth rate in FY22.
The government's fiscal deficit narrowed to Rs 17.33 trillion or 6.4% of GDP for FY23, on the back of higher tax receipts.
The seasonally adjusted S&P Global India Manufacturing Purchasing Managers' Index (PMI) rose to 58.7 in May, indicating the strongest improvement in the health of the sector since October 2020.
Numbers to Track:
The yield on India's 10-year benchmark federal paper declined 0.10% to 6.982 from previous close of 6.989.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 82.42, compared with its close of 82.7500 during the previous trading session.
MCX Gold futures for 5 June 2023 settlement lost 0.77% to Rs 59,700.
The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.24% at 104.07.
The United States 10-year bond yield advanced 0.92% to 3.669.
In the commodities market, Brent crude for July 2023 settlement lost 47 cents or 0.65% to $72.13 a barrel.
Global Markets:
European shares advanced on Thursday, while Asian shares ended mixed. Investors remained cautious amid the passage of the US debt ceiling bill and the release of manufacturing data of several Asian countries, including China.
US stocks slipped on Wednesday as investors kept an eye on the federal debt ceiling debate in Washington.
The House of Representatives later passed a bill to suspend the $31.4 trillion debt ceiling on Wednesday, with majority support from both Democrats and Republicans.
May auto sales impact:
Maruti Suzuki India declined 0.29%. The car manufacturer announced that its total sales in the month of May 2023 aggregated to 178,083 units, which is higher by 10.3% as compared with 161,413 units sold in the same period last year.
Mahindra & Mahindra rose 0.03%. The company's overall auto sales for the month of May 2023 stood at 61,415 vehicles, up by 14% from 53,726 sold in same period last year.
Ashok Leyland rose 0.51%.The commercial vehicles maker reported marginal decline in total vehicle sales to 13,134 units in May 2023 from 13,273 units in May 2022.
Escorts Kubota rose 0.55%. The tractor maker said that its Agri Machinery business had sold 9,167 tractors in May 2023, its highest ever May sales recording growth of 8.9% as against 8,421 tractors sold in May 2022.
Steel Strips Wheels gained 2.27%. The company said that it had achieved a net turnover of Rs 357.27 crore in May 2023 as against Rs 325.26 crore in May 2022, recording a growth of 9.84% on YoY basis.
VST Tillers Tractors shed 0.59%. The total sales increased 3.53% to 3,756 units in May 2023 from 3,628 units sold in May 2022.
Stocks in Spotlight:
Tata Motors rose 1.67%. The company has commenced a tender offer inviting the holders of the ECB bonds to offer to sell for cash to the company the ECB bonds held by such bond holders, subject to the terms and conditions set out in the tender offer memorandum dated 31 May 2023, issued by the company.
Coal India (CIL) fell 4.42% after the offer for sale (OFS) opened for non-retail investors today, 1 June 2023. Through the OFS, the Government of India proposes to sell up to 9,24,40,924 equity shares (representing 1.5% stake), with an option to sell an additional 1.5% stake or 9,24,40,924 equity shares in case of oversubscription. The floor price for the sale has been set at Rs 225, a 6.72% discount to the stock's closing price of Rs 241.20 on Wednesday, 31 May 2023. Retail investors and non-retail investors, who choose to carry forward their bids, can participate in the issue on June 2.
As on 15:30 IST, the OFS received subscription for 28,76,24,993 shares. It was subscribed 3.45 times on the base non-retail offer size of 8,31,96,831 shares and 1.72 times on the total non-retail offer size (base size + green shoe) of 16,63,93,662 shares.
HDFC Life Insurance Company shed 1.58%. abrdn (Mauritius Holdings) 2006 (abrdn), one of the promoters of the company, has intimated that it has undertaken a sale of 3,56,94,105 equity shares (representing approximately 1.66% stake) on 31 May 2023, to various investors through the screen based trading system of the stock exchanges at an average price of Rs. 570.60 per equity share (including brokerage and commission).
South Indian Bank rallied 9.57% after the bank said its board has approved a panel of candidates for the position of managing director and chief executive officer (MD & CEO).
UCO Bank jumped 5.67% after the Central Government appointed Ashwani Kumar as managing director & chief executive officer (MD & CEO) of the bank for a period of three years.
NCC rose 3.10% after the company announced that it had secured new orders worth Rs 2088 crore in May 2023.
Finolex Industries declined 2.64% after Anil V. Whabi retired on completion of his tenure as managing director (MD) of the company on close of business hours on 31 May 2023.
Laurus Labs added 2.96%. The company said that it has signed definitive agreements to acquire additional stake of 7.24% in Immunoadoptive Cell Therapy (lmmunoACT), an advanced cell and gene therapy company for a cash consideration of Rs 80 crore. Post the completion of the deal, Laurus Labs' stake in ImmunoACT will increase to 33.86% (on fully diluted basis).
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