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Broader market in red; breadth turns negative

Published on May 05, 2022 14:30

The benchmark equity indices sharply reversed trend and briefly slipped into the negative terrain in mid-afternoon trade, taking cues from US Dow futures. At 14:28 IST, the barometer index, S&P BSE Sensex was up 61.76 points or 0.11% to 55,730.79. The Nifty 50 index was up 22.35 points or 0.13% to 16,699.95.

The US Dow Jones index futures were down 181 points, indicating a weak opening in the US stocks today.

In the broader market, the S&P BSE Mid-Cap index fell 0.26% while the S&P BSE Small-Cap index declined 0.24%.

Realty, FMCG and healthcare stocks declined. On the other hand, IT and metal stocks were in demand.

The market breadth turned negative. On the BSE, 1582 shares rose while 1709 shares fell. A total of 126 shares were unchanged.

Buzzing Segment:

The Nifty Realty index fell 1.6% to 423.25. The index has fallen 4.82% in two sessions.

Among the components of the Nifty Realty index, Godrej Properties (down 5.69%), Sobha (down 3.86%), DLF (down 2.7%), Oberoi Realty (down 0.39%) declined.

Stocks in Spotlight:

Rain Industries fell 0.80%. The company`s consolidated net profit soared to 34.5% to Rs 277.44 crore on a 47.5% increase in net sales to Rs 4,436.54 crore in Q1 CY2022 over Q1 CY2021. Consolidated profit before tax in Q1 CY22 stood at Rs 490.44 crore, up 56.1% from Rs 314.21 crore in Q1 CY21. Adjusted EBITDA for Q1 March 2022 surged 31.4% to Rs 834.8 crore as against Rs 635.3 crore in Q1 March 2021.Adjusted EBITDA margin fell to 18.8% in Q1 CY22 from 21.1% in Q1 CY21.

Tata Power Company rose 0.84%. The company announced that its wholly owned subsidiary, Tata Power Solar Systems, bagged India`s largest single solar EPC order of 1GW (gigawatt) for approximately Rs 5,500 crore from SJVN.

US Fed Policy Action:

The United States Federal Reserve raised its benchmark short-term interest rate by 50 basis point on Wednesday, its most aggressive move since 2000. This triggered a relief rally across global stocks as investors were worried that Fed might shock markets with a 75 bps hike.

Fed Chairman Jerome Powell said half-point rises remain on the table for the next couple of meetings. Powell talked about a strong economy, but also the pain consumers have been feeling at the grocery store and gas pump, in afternoon news conference, saying higher interest rates are the cure.

The Fed also outlined plans to reduce its near $9 trillion balance sheet, first by $47.5 billion a month starting in June, but ramping up to $95 billion a month. This will result in a nearly $3 trillion reduction in its record size over the next three years.

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