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Market extends losses; Nifty below 16,500 level

Published on Jun 01, 2022 14:28

The key equity indices further extended losses and hit a fresh intraday low in mid-afternoon trade. The Nifty was trading below 16,500 level. Barring the Nifty PSU Bank index, all the sectoral indices on the NSE were trading in the red. A sharp rise in crude oil prices spooked investors. The jump in oil prices threatens to upend India`s fiscal math and economic projections.

At 14:24 IST, the barometer index, S&P BSE Sensex was down 314.08 points or 0.57% to 55,252.33. The Nifty 50 index fell 102 points or 0.62% to 16,482.55.

In the broader market, the S&P BSE Mid-Cap index declined 0.37% while the S&P BSE Small-Cap index gained 0.33%.

The market breadth was positive. On the BSE, 1,694 shares rose while 1,574 shares fell. A total of 142 shares were unchanged.

Economy:

The seasonally adjusted S&P Global India Manufacturing Purchasing Managers` Index (PMI) stood at 54.6 in May, little-changed from 54.7 in April, pointing to a sustained recovery across the sector. The above-50.0 reading was the eleventh in as many months and consistent with a solid improvement in operating conditions.

India`s GDP growth in Q4 FY22 was at 4.1% year-on-year, compared to a revised growth of 5.4% for Q3 FY22. Gross Value Added (GVA), which excludes the impact of subsidies and indirect taxes, grew 3.9% year-on-year in the fourth quarter.

For the full fiscal year, GDP grew 8.7% year-on-year, compared to a contraction of 6.6% in FY21. GVA for FY22 grew 8.1% year-on-year, compared to a contraction of 4.8% in FY21.

The combined Index of Eight Core Industries stood at 143.2 in April 2022, which is an increase of 8.4% (provisional) as compared to the Index of April 2021. The production of Coal, Electricity, Refinery Products, Fertilizers, Cement and Natural Gas industries increased in April 2022 over the corresponding period of last year. The Eight Core Industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).

Final growth rate of Index of Eight Core Industries for January 2022 is revised to 4.0% from its provisional level 3.7%. The growth rate of ICI during April-March 2021-22 was 10.4% (P) as compared to the corresponding period of last FY.

Numbers to Track:

The yield on India`s 10-year benchmark federal paper rose to 7.430% as compared with 7.415% at close in the previous trading session.

In the foreign exchange market, the rupee was higher against the dollar. The partially convertible rupee was hovering at 77.5425, compared with its close of 77.71 during the previous trading session.

MCX Gold futures for 3 June 2022 settlement fell 0.57% to Rs 50,565.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, increased 0.17% to 101.93.

In the commodities market, Brent crude for August 2022 settlement rose $1.89 or 1.63% at $117.49 a barrel. The gains came after European Union leaders agreed to a partial and phased ban on Russian oil and China ended its COVID-19 lockdown in Shanghai.

Buzzing Index:

The Nifty Pharma index fell 1.01% to 12,476.60. The index declined 1.54% in two trading sessions.

Among the components of the Nifty Pharma index, Biocon (down 2.1%), Ipca Laboratories (down 2.09%), Sun Pharmaceuticals Industries (down 2.09%), Lupin (down 1.59%) and Gland Pharma (down 1.43%) were the top losers.

Among the other losers were Zydus Lifesciences (down 1.41%), Granules India (down 1.33%), Dr Reddys Laboratories (down 1.31%), Alembic Pharmaceuticals (down 1.09%) and Strides Pharma Science (down 1.04%).

On the other hand, Natco Pharma (up 2.41%) and Aurobindo Pharma (up 1.67%) advanced.

Natco Pharma rose 2.41% after the company announced the launch of first generic version of Nexavar (Sorafenib) tablets in the US market. Viatris, a global pharma company and commercial partner of Natco, will launch the product. Sorafenib is prescribed for treatment of unresectable Hepatocellular Carcinoma (HCC), advanced Renal Cell Carcinoma (RCC) and Differentiated Thyroid Carcinoma (DTC). It is an oral multi-kinase inhibitor that is used in the therapy of advanced renal cell, liver and thyroid cancer. As per the industry sales data, Nexavar registered sales of $69.7 million for the year ended December 2021.

Stocks in Spotlight:

Maruti Suzuki India fell 0.94% after the company sold a total of 161,413 units in May 2022, which is significantly higher as compared with 46,555 units sold in May 2021. The company sold 134,222 vehicles in the domestic market in May 2022. Domestic sales in the same period last year was 35,293 units. Total export sales in May 2022 was 27,191 units as against 11,262 units in May 2021. Maruti Suzuki said that the shortage of electronic components had a minor impact on the production of vehicles, mainly on domestic models.

Eicher Motors shed 0.90%. The company`s unlisted subsidiary, VE Commercial Vehicles (VECV) sold 5,637 units of commercial vehicles in May 2022, up 360.9% YoY. VECV had sold 1,223 units of commercial vehicles (CV) in May 2021. Total CV sales in the domestic market during month was 5033 units as against 656 units sold in the same period last year. The company exported 471 units of commercial vehicles (down 9.2% YoY) during the period under review. The company sold 133 units of Volvo Trucks & Buses in May 2022, which is higher by 177.1% as compared with 48 units sold in May 2021.

Steel Strips Wheels (SSWL) rose 1.97% after the company`s net turnover jumped 96.31% to Rs 325.26 crore in May 2022 from Rs 165.68 crore in May 2021. The company achieved gross turnover of Rs 401.07 crore in May 2022 as against Rs 190.69 crore in May 2021, a growth of 110.32% year on year (YoY). The company`s 2 & 3 wheelers segment reported a growth of 1307% YoY in May, followed by Truck segment, which rose 454% YoY. Passenger Car segment grew 293% YoY, Alloy Wheels segment rose 135% YoY and Tractor segment jumped 63% YoY. Meanwhile, total exports fell 56% YoY in May 2022. Separately, SSWL announced that the promoter group released some of the pledged shares on 31 May 2022. On 30 May 2022, 3,50,000 shares were pledged and on 31 May 2022, 4,50,000 shares were released from pledge. Accordingly, the total number of shares pledged has reduced to 36,29,044, or 11.62% of total paid up capital of the company and 18.52% of total promoter shareholding.

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