Barometers turn rangebound, breadth remains weak

The benchmark indices traded in a narrow range with steep losses in the afternoon trade. The Nifty regained the 16,400 mark after hitting the day`s low of 16,347.10 in early afternoon trade. Consumer durables, realty and FMCG shares were under pressure while oil and gas scrips bucked the trend. Mixed Asian cues and continuous selling by the FIIs dented sentiment. Investors were also cautious ahead of Reserve Bank of India (RBI)`s policy announcement later this week.

At 13:30 IST, the barometer index, the S&P BSE Sensex, was down 588.02 points or 1.06% to 55,087.30 . The Nifty 50 index declined 165.45 points or 1% at 16,404.10.

In the broader market, the S&P BSE Mid-Cap index lost 1.02% while the S&P BSE Small-Cap index was slipped 0.75%.

The market breadth was weak. On the BSE, 1,193 shares rose and 2,004 shares fell. A total of 124 shares were unchanged.

RBI`s Monetary Policy Committee (MPC) is meeting from 6th to 8th June 2022. After the 40 basis points off-cycle rate hike on 4 May 2022, RBI is widely expected to increase the policy rate further.

Economy:

India`s benchmark 10-year bond yield rose to its highest levels in three years ahead of RBI policy announcement due tomorrow. Yield on benchmark 10-year bond 6.54GS 2032 rose to 7.53%, up 4 basis points from its previous close and the highest level since March 2019. The RBI is widely expected to sharply hike the rate again tomorrow after an off-cycle 40 basis point repo rate hike last month.

Meanwhile, higher global crude oil prices influencing higher inflation also hurt sentiment. Crude oil is seen at $120.02 per barrel, not far from a 14-year high of $130 hit in March, amid tight global supplies. The benchmark hit a three-month high of $121.99 on Monday, after Saudi Arabia raised prices for its crude sales in July, indicating tight global supplies even after the Organization of the Petroleum Exporting Countries (OPEC)+ agreed to accelerate its output increases over the next two months.

Gainers & Losers:

ONGC (up 5.78%), Coal India (up 1.87%), NTPC (up 0.77%), Hero Motocorp (up 0.56%) and Bajaj-Auto (up 0.52%) were major Nifty gainers.

Titan Company (down 4.39%), Dr.Reddy`s Laboratories (down 3.27%) and UPL (down 3.09%), Hindustan Unilever (down 2.78%) and Larsen & Toubro (L&T) (down 2.75%) were majority Nifty losers.

Stocks in Spotlight:

HLE Glascoat rose 1.04% after the company`s board approved 5-for-1 stock split and fundraising of upto Rs 350 crore. The board of HLE Glascoat on 6 June 2022 approved the sub-division/ split of existing 1 equity share of face value Rs 10 each, fully paid up into 5 equity shares of Rs 2 each. Further, the board also approved raising upto 350 crore by issuing equity shares or any other instruments convertible into equity shares or any other eligible securities through qualified institutions placement, private placement/ public issue of equity, preferential issue or through any other permissible mode and/ or combination thereof as may be considered appropriate

Ashoka Buildcon shed 0.17% after the company said that it has received a letter of acceptance (LOA) from the Guyanan government for a road project worth $106 million. The company had submitted its bid to the Government of the Co-operative Republic of Guyana (the authority) and it has received a letter of acceptance (LOA) from the authority for the project viz. `request for proposal for procurement of Phase-1: East Bank-East Coast Road Linkage Project (Ogle to Haags Bosch, Eccles)` (Project). The accepted bid project cost for the project is $106,383,954.52. The construction period is 730 days from the commencement date.

Time Technoplast advanced 3.91% after the company`s promoter firm informed that the process of sale of land parcel located on Saki Vikar road in Mumbai, has commenced with identified buyer. Further, due diligence process is ongoing by a leading asset management company. The transaction is likely to be completed including receipt of sales proceeds shortly. The sale consideration will be utilized for repayment of debt to lenders of the promoter company, resulting in release of entire present pledged equity shares, the company said in a statement on Monday.

Aurobindo Pharma declined 1.04% after the drug maker announced that its wholly owned subsidiary, Eugia Pharma Specialties, received final approval from the US Food & Drug Administration (USFDA) to manufacture and market Leuprolide Acetate injection, 14 mg/2.8 mL MDV (Kit). Leuprolide Acetate for injection is indicated for the treatment used to treat the symptoms associated with advanced prostate cancer by way of Palliative treatment of advanced prostatic cancer. The drug maker said the product will be a multiple-dose vials and it is therapeutically equivalent to the reference listed drug product (RLD), Lupron Injection, of AbbVie Endocrinology.

Global Markets:

European stocks fell across the board while Asian shares were mixed on Tuesday, as investors nervously awaited U.S. inflation figures.

In Europe, British Prime Minister Boris Johnson survived a no-confidence vote among his Conservative Party`s lawmakers on Monday.

US markets closed slightly higher on Monday led by gains in Amazon and other mega-cap growth shares, while persistent worries over inflation and interest rates kept a lid on the market. The Dow Jones Industrial Average rose 16.08 points, or 0.05%, to 32,915.78, the S&P 500 gained 12.89 points, or 0.31%, to 4,121.43 and the Nasdaq Composite added 48.64 points, or 0.4%, to 12,061.37.

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