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Indices trim losses; breadth remains positive

Published on Feb 03, 2022 14:34

Equity indices trimmed losses in mid afternoon trade. Investors locked profits following a 3-day rally. The Nifty traded a tad below 17,650 level.

At 13:30 IST, the barometer index, the S&P BSE Sensex, dropped 505.89 points or 0.85% at 59,052.24. The Nifty 50 index lost 140.89 points or 0.79% at 17,639.70.

Selling was broad based. The S&P BSE Mid-Cap index fell 0.52% while the S&P BSE Small-Cap index fell 0.03%.

Buyers outnumbered sellers. On the BSE, 1,790 shares rose and 1,516 shares fell. A total of 99 shares were unchanged.

Buzzing Segment:

CCI has penalised five tyre companies namely Apollo Tyres, MRF, CEAT, JK Tyre and Industries, Birla Tyres and their association i.e. Automotive Tyre Manufacturers Association (ATMA) for indulging in cartelisation by acting in concert to increase the prices of cross ply/bias tyres variants sold by each of them in the replacement market and to limit and control production and supply in the said market.

The Commission noted that the tyre manufactures had exchanged price-sensitive data amongst them through the platform of their association, namely, Automotive Tyre Manufacturers Association (ATMA), and had taken collective decisions on the prices of tyres. The Commission also found that ATMA collected and compiled information relating to company-wise and segment-wise data (both monthly and cumulative) on production, domestic sales and export of tyres on a real time basis. Thus, the Commission noted that the sharing of such sensitive information made the co-ordination easier amongst the tyre manufacturers.

Accordingly, the Commission held the five tyre manufacturers and ATMA guilty of contravention of the provisions of the Competition Act, 2002, which prohibits anti-competitive agreements including cartels, during 2011-2012. The Commission imposed penalties of Rs 425.53 crore on Apollo Tyres, Rs 622.09 crore on MRF, Rs 252.16 crore on CEAT, Rs 309.95 crore on JK Tyre and Rs 178.33 crore on Birla Tyres, besides passing a cease-and-desist order.

Following the announcement by CCI, Birla Tyres (down 2.5%) and JK Tyre and Industries (down 2.13%) and MRF (down 0.41%) declined. Apollo Tyres (down 0.07%) and CEAT (down 0.06%) traded flat.

Stocks in Spotlight:

Titan Company gained 1.16% after the company reported a standalone net profit of Rs 987 crore in Q3 FY22 as against a net profit of Rs 419 crore Q3 FY21, recording a growth of 136% on YoY basis. The company`s revenue excluding bullion sales grew by 36% in Q3 FY22 compared to Q3 FY21. The total income for the quarter was Rs 9,570 crore, registering a growth of 31% as compared to Rs 7,324 crore in Q3 FY21. The Jewellery business registered an income of Rs 8,563 crore with 37% YoY growth in Q3 FY22. The Watches and Wearables business recorded an income of Rs 708 crore with 29% YoY growth in Q3 FY22. The Eyewear business recorded an income of Rs 156 crore with 26% YoY growth in Q3 FY22. The other segments of the company comprising Indian dress wear and fragrances & accessories recorded an income of Rs 52 crore in Q3 FY22 compared to Rs 36 crore in Q3 FY21, a growth of 44%. The strong recovery and the product mix improvement helped the company achieve profit before taxes and exceptional items of Rs 1,317 crore for the quarter compared to Rs 765 crore in the same quarter previous year, registering a growth of 72%.

Varun Beverages fell 0.95%. On a consolidated basis, the company reported a net profit of Rs 16.49 crore in Q4 December 2021 as against net loss of Rs 19.73 crore in Q4 December 2020. Net sales rose 30.31% to Rs 1,734.33 crore in Q4 December 2021 over Q4 December 2020, primarily on account of strong volume growth. Total sales volumes were up by 28.5% YoY at 112.0 million cases in Q4 CY 2021. Pre-tax profit stood at Rs 41.85 crore in Q4 December 2021 as against pre-tax loss of Rs 18.86 crore in Q4 December 2020. EBITDA increased 20.5% to Rs 207.57 crore in Q4 CY 2021 from Rs 172.23 crore.

Adani Total Gas fell 1.39%. On a standalone basis, net profit declined 9.3% to Rs 131.58 crore on a 78% surge in net sales to Rs 883.27 crore in Q3 FY22 over Q3 FY21. EBITDA fell 5% to Rs 211 crore in Q3 FY22 over Rs 222 crore in Q3 FY21. Total sales volume grew 25% to 192 MMSCM (Million Metric Standard Cubic Meter) in Q3 FY22 as against 153 MMSCM in Q3 FY21. CNG Sales jumped 47% to 101 MMSCM in Q3 FY22 as compared to 68 MMSCM in Q3 FY21. PNG Sales rose 7% to 91 MMSCM in Q3 FY22 over 85 MMSCM in Q3 FY21.

Numbers to Track:

The yield on 10-year benchmark federal paper fell to 6.868% compared with its previous close of 6.880%.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 74.8425, compared with its close of 74.83 during the previous trading session.

MCX Gold futures for 4 February 2022 settlement rose 0.08% to Rs 47,961.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, rose 0.2% to 96.125.

In the commodities market, Brent crude for April 2022 settlement fell 11 cents or 0.12% at $89.36 a barrel.

Global Markets:

European markets traded higher while Asian stocks ended on a mixed note on Thursday amid some lingering concerns about global growth and ongoing geopolitical tensions. A number of major markets, including those on the Chinese mainland and in Hong Kong, remain shut for the Lunar New Year holidays.

US stocks rose for a fourth straight day Wednesday, as Alphabet propelled gains in tech thanks to strong quarterly earnings. Shares of Google-parent Alphabet surged after its quarterly numbers topped analyst expectations. The company also announced a 20-for-1 stock split.

On the data front, investors are awaiting the U.S. Labor Department`s nonfarm payroll count due Friday, which is seen as one of the major indicators of the how the U.S. economy is doing.

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