Bulls take breather amid mixed global cues; HDFC twins drag

Key equity barometers experienced a pause in their upward trajectory on Tuesday, putting an end to a two-day winning streak. The benchmark Nifty index fell below the crucial 18,300 mark, weighed down by underperforming sectors such as auto, pharma, and banks. However, amidst this correction, broader indices managed to buck the trend and closed higher. While factors like strong foreign institutional investor (FII) buying and positive domestic economic indicators had been driving the recent rally, global uncertainties surrounding interest rates and the US debt ceiling impasse have now prompted investors to take some profits off the table at regular intervals.

The barometer index, the S&P BSE Sensex slipped 413.24 points or 0.66% to 61,932.47. The Nifty 50 index shed 112.35 points or 0.61% to 18,286.50.

HDFC (down 2.21%), Tata Motors (down 1.84%), HDFC Bank (down 1.76%), Reliance Industries (down 1.38%) and ITC (down 0.92%) were major drags.

The broader market outperformed the headline indices. The S&P BSE Mid-Cap index gained 0.18% while the S&P BSE Small-Cap index rose 0.12%.

The market breadth was negative. On the BSE, 1,757 shares rose and 1,772 shares fell. A total of 130 shares were unchanged.

Economy:

Merchandise exports in April 2023 were $34.66 billion, as compared to $39.70 billion in April 2022, registering a de-growth of 12.7%. Merchandise imports in April 2023 were $49.90 billion, as compared to $58.06 billion in April 2022, down 14%.

India`s overall exports (Merchandise and Services combined) in April 2023 is estimated to be $65.02 billion. Overall imports in April 2023 are estimated to be $66.40 billion. Riding on the high exports base of April 2022, India`s overall exports are projected to grow at 2% during April 2023.

Numbers to Watch:

The yield on India`s 10-year benchmark federal paper fell 0.53% to 6.964 as compared with previous close of 7.001.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 82.1950, compared with its close of 82.3150 during the previous trading session.

MCX Gold futures for 5 June 2023 settlement shed 0.41% to Rs 60,779.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was down 0.15% to 102.28

The United States 10-year bond yield slipped 1.08% to 3.470.

In the commodities market, Brent crude for July 2023 settlement advanced 6 cents or 0.08% to $75.29 a barrel.

Global Markets:

A mixed performance was witnessed across Asian stocks, while European stocks exhibited resilience and advanced. Investors grappled with global growth concerns, political uncertainty, and corporate earnings reports.

Investors digested global growth concerns, political uncertainty as well as more corporate earnings.

Investors have traded in a cautious manner Tuesday, with data showing that the U.K. unemployment rate unexpectedly rose to 3.9% in March while pay growth, which has been fueling inflation, remained strong by historical standards.

The European Commission on Monday lifted its gross domestic product estimate higher for this year, now forecasting 1% growth, up from a previous 0.8% estimate. However, it also raised its forecasts for inflation for the euro area to 5.8% this year and 2.8% in 2024, expecting the European Central Bank to continue with rate hikes, potentially adding to growth concerns.

Meanwhile, China`s industrial output grew 5.6% in April from a year earlier, official data showed on Tuesday, accelerating from a 3.9% gain seen in March. Retail sales jumped 18.4%, significantly faster than the 10.6% increase in March and marked the quickest growth since March 2021. Fixed asset investment expanded 4.7% in the first four months of 2023 from the same period a year earlier. It grew 5.1% in the January-March period.

US stocks rose on Monday amid ongoing debt ceiling negotiations between the White House and Republicans. In focus for investors were debt ceiling talks, which were postponed to this week from Friday. President Joe Biden is expected to host top congressional leaders on Tuesday.

Stocks in Spotlight:

Bharti Airtel fell 1.27%. In the fourth quarter of FY23, the company achieved a consolidated net income (excluding exceptional items) of Rs 2,592 crore, showing a 39.3% year-on-year increase. Total revenues reached Rs 36,009 crore, marking a 14.3% YoY growth. The EBITDA stood at Rs 18,807 crore, displaying a 17.6% YoY increase. Additionally, the EBITDA margin expanded by 144 basis points YoY, reaching 52.2%. Furthermore, the company observed a rise in Mobile ARPU, with it reaching Rs 193 in Q4 FY23 compared to Rs 178 in Q4 FY22.

Vesuvius India hit an upper limit of 20% after the company reported 83.5% jump in net profit to Rs 43.35 crore in Q1 March 2023 from Rs 23.63 crore in Q1 March 2022. Net sales increased by 18% YoY to Rs 365.81 crore during the quarter.

Bank of Baroda rose 1.39% the bank reported 168.46% surge in net profit to Rs 4,775.53 crore in Q4 FY23 as compared with Rs 1,778.77 crore in Q4 FY22. Total income increased 41.68% to Rs 29,332.74 crore during the quarter as compared with Rs 20,695.90 crore recorded in corresponding quarter last year.

PVR Inox slipped 2% after the company reported a consolidated net loss of Rs 333.37 crore in Q4 FY23 as compared with net loss of Rs 105.49 crore in Q4 FY22. Net sales stood at Rs 1143.17 crore in Q4 FY23, steeply higher from Rs 536.17 crore recorded in corresponding quarter last year.

Meanwhile, the company said that it plans to shut down approximately 50 cinema screens over the next 6 months. These properties are loss making, or housed in malls which have reached the end of their life cycle with little hope of any revival.

MPS hit an upper limit of 20% after the company`s consolidated net profit jumped 45.65% to Rs 32.13 crore on 16.5% rise in revenue from operations to Rs 127.46 crore in Q4 FY23 over Q4 FY22. The board has recommended a dividend of Rs 20 per equity share for FY23, subject to approval of shareholders.

Repro India surged 13.31% after investor Madhuri Madhusudan Kela purchased stake in the company viz bulk deals yesterday.

According to the NSE`s bulk deal data on Monday, 15 May 2023, Madhuri Kela acquired 4,75,000 shares, representing 3.73% equity, in the company. Meanwhile, Harit Exports purchased 1,00,000 shares, accounting for 0.79% equity.

On the other hand, Malabar India Fund sold 5,12,000 shares, equivalent to 4.02% equity. As of 31st March 2023, Malabar India Fund held a 4.56% stake in the company.

UltraTech Cement fell 0.88%. UltraTech Nathdwara Cement (UNCL), a wholly owned subsidiary of UltraTech Cement, has commissioned a 0.8 million tonnes per annum (MTPA) brownfield cement factory at Neem Ka Thana in Rajasthan.

Berger Paints India lost 2.73%. The company`s consolidated net profit fell 15.6% to Rs 186.01 crore in Q4 FY23 as against Rs 220.29 crore reported in Q4 FY22. Total income from operations rose 7.6% year on year to Rs 2443.63 crore in the quarter ended 31 March 2023.

Procter & Gamble Health gained 2.94%. The company reported 16% increase in net profit to Rs 59.2 crore on a 21% rise in total sales to Rs 316.3 crore in Q3 March 2023 as compared with Q3 March 2023.

Granules India slipped 1.66%. The pharmaceutical company reported 7.75% rise in consolidated net profit to Rs 119.60 crore on 16.07% increase in revenue from operations to Rs 1195.5 crore in Q4 FY23 over Q4 FY22.

Suryoday Small Finance Bank added 1.68% after the bank reported a net profit of Rs 38.91 crore in Q4 FY23 as compared with net loss of Rs 48.12 crore in Q4 FY22. Total income jumped 41.65% to Rs 363.41 crore in Q4 FY23 as against Rs 256.55 crore in Q4 FY22.

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