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Benchmarks take breather after recent up move; NSE VIX climbs over 4%

Published on May 24, 2023 17:16

The key equity indices ended with modest losses on Wednesday, snapping a three-day rising streak. The Nifty 50 index settled below the 18,300 level after hitting day`s high at 18,392.60 in mid-morning trade. Investors were concerned over stalled US debt ceiling talks and hawkish comments from US Fed officials. Most sectors traded in sync with the trend and ended lower wherein metal, banking and financials were among the top losers. Meanwhile, the outperformance continued from the broader indices as they managed to end marginally in the green.

The barometer index, the S&P BSE Sensex, fell 208.01 points or 0.34% to 61,773.78. The Nifty 50 index lost 62.60 points or 0.34% to 18,285.40. The 50-unit index rose 1.20% in the past three sessions.

Adani Enterprises (down 5.90%), ICICI Bank (down 1.30%), HDFC Bank (down 1.29%), HDFC (down 1.27%) and Reliance Industries (down 0.69%) were major drags.

The broader market outperformed the frontline indices. The S&P BSE Mid-Cap index gained 0.13% while the S&P BSE Small-Cap index rose 0.10%.

The market breadth was negative. On the BSE, 1614 shares rose and 1863 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, surged 4.02% to 13.11.

Numbers to track:

The yield on India`s 10-year benchmark federal paper declined 0.38% to 6.989 as compared with previous close of 7.016.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 82.7100, compared with its close of 82.8500 during the previous trading session.

MCX Gold futures for 5 June 2023 settlement rose 0.02% to Rs 60,209.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was up 0.24% to 103.73

The United States 10-year bond yield slipped 0.54% to 3.676.

In the commodities market, Brent crude for July 2023 settlement gained $1.12 or 1.46% to $77.96 a barrel.

Global Markets:

Markets in Europe and Asia tumbled on Wednesday as negotiations over raising the US debt ceiling remained at an impasse.

In Europe, UK inflation fell from 10.1% to 8.7%, but remained high at 19.1% in food and non-alcoholic beverages.

New Zealand`s central bank raised interest rates to 5.5%, the highest since October 2008, and warned of an economic contraction this year.

US stock market ended lower Tuesday amid growing worries over raising the debt limit. US debt negotiations continued but progress appeared limited. The current debt ceiling is $31.4 trillion. The Treasury Department has warned that the US could default on its debt if the debt ceiling is not raised by June 1st.

Investors will keep an eye on the minutes of the Federal Reserve meeting on May 2-3 for insights into whether interest rates will be paused at the Fed`s June gathering.

In a media interview, Minneapolis Fed President Neel Kashkari and St. Louis Fed President James Bullard both suggested that the Federal Reserve may need to raise interest rates above 6% in order to bring inflation back under control. Kashkari said that "it may be that we have to go north of 6%" in order to reach the Fed`s 2% target, while Bullard said that "there might be the need to go higher on policy rate."

Stocks in Spotlight:

Hindalco Industries fell 0.77% after the aluminium major`s net profit declined 37.4% to Rs 2,411 crore in Q4 FY23 as against Rs 3,851 crore in Q4 FY22. Revenue from operations stood at Rs 55,857 crore in the quarter ended 31 March 2023 as compared with Rs 55,764 crore posted in the corresponding quarter previous year.

Suzlon Energy surged 6.24% after the company announced that it secured a major order of 300 MW from Torrent Power. The project will be completed in phases by 2025 in Karnataka.

Varun Beverages jumped 3.76%. The company said it has incorporated a wholly-owned subsidiary in South Africa. The subsidiary, Varun Beverages South Africa, will be based in Johannesburg. It will help Varun Beverages to further expand its reach in Africa and to better serve its customers in the region.

Deepak Nitrite surged 9.58% after the company`s wholly owned subsidiary, Deepak Chem Tech, has signed a memorandum of understanding with the Gujarat government to invest Rs 5,000 crore in the next four years to set up projects to manufacture speciality chemicals, phenol/acetone and bisphenol at Dahej/Nandesari in Gujarat.

Sudarshan Chemical Industries soared 11.82% after the company`s consolidated net profit stood at Rs 32.57 crore, steeply higher from Rs 0.58 crore in Q4 FY23 over Q3 FY23. Revenue from operations jumped 31.62% to Rs 685.17 crore in Q4 FY23 as compared to Rs 520.85 crore in Q3 FY23.

Schneider Electric Infrastructure surged 13.46% after the company reported net profit of Rs 44.84 crore in Q4 March 2023, steeply higher than Rs 0.07 crore in Q4 March 2022. Net sales rose 20.73% to Rs 410.51 crore in Q4 March 2023 over Q4 March 2022.

Ashok Leyland declined 1.22%. The Hinduja Group company`s standalone net profit declined 16.6% to Rs 751.41 crore in Q4 FY23 from Rs 901.37 crore reported in Q4 FY22. Revenue from operations jumped 32.95% year on year to Rs 11,625.67 crore in the quarter ended 31 March 2023.

Bikaji Foods International shed 0.49%. The company reported 51.6% increase in consolidated net profit to Rs 37.71 crore in Q4 FY23 from Rs 24.87 crore in Q4 FY22. Net sales improved by 15.6% YoY to Rs 461.69 crore during the quarter.

SKM Egg Products Export (India) hit an upper limit of 5% after the company`s net profit soared to Rs 29.73 crore in Q4 March 2023 as against Rs 0.68 crore in Q4 March 2022. Net sales surged 143.55% year-on-year to Rs 185.56 crore in Q4 March 2023.

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