MARKET SLIDES FOR 3RD DAY, NIFTY ENDS BELOW 17,620; IT SHARES DRAG

The major stock indices experienced their third consecutive decline on Wednesday. The Nifty 50 index started lower at 17,653.35. Although it briefly turned positive during early afternoon trading and hit the day`s peak at 17,666.15, it later retracted and closed below 17,620. IT and PSU banks tumbled. On the other hand, metals, oil & gas and realty shares bucked trend.

The S&P BSE Sensex, which serves as a barometer index, fell 0.27%, or 159.21 points, to reach 59,567.80. Likewise, the Nifty 50 index decreased by 0.23%, or 41.40 points, to close at 17,618.75. In the three straight sessions, the Sensex has fallen 1.43% while the Nifty has slipped 1.17%.

HCL Technologies, Infosys, Wipro and TCS were major drags today, falling between 2.4% to 1.36%.

In terms of the broader market, the S&P BSE Mid-Cap index fell by 0.18%, while the S&P BSE Small-Cap index rose by 0.12%.

The market breadth remained positive. On the BSE, 1,811 shares rose and 1,701 shares fell. A total of 122 shares were unchanged.

Investors became cautious as uncertainty over the path of U.S. monetary policy outweighed optimism regarding China`s economic recovery. The Fed`s Beige Book report, set to be released later on Wednesday, is being closely monitored for the central bank`s assessment of the U.S. economy. In recent sessions, market concerns about rising interest rates have resurfaced, as hawkish comments from Fed officials and indications of some economic resilience in the US stoked apprehension about when the Fed will pause its rate hike cycle.

Numbers to Watch:

The yield on India`s 10-year benchmark federal paper advanced to 7.231 from 7.221 in previous trading session.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 82.2350, compared with its close of 82.0475 during the previous trading session.

MCX Gold futures for 5 June 2023 settlement slipped 1.15% to Rs 59,794.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was up 0.33% to 102.08.

The United States 10-year bond yield rose 1.60% to 3.629

In the commodities market, Brent crude for June 2023 settlement lost $1.56 or 1.84% to $83.21 a barrel.

Global Markets:

The Dow Jones index futures were down 116 points, indicating a weak opening in the US stocks.

European shares tumbled while Asian stocks settled mixed on Wednesday as officials of the U.S. Federal Reserve delivered mixed signals on future rate hikes.

The UK saw a decline in consumer price inflation to 10.1% in March, with a drop in motor fuels and housing and household services, while food and recreation/culture became more expensive.

In the US, major indexes closed near the flatline Tuesday, as investors reviewed earnings reports from Goldman Sachs and Bank of America.

Atlanta Federal Reserve President Raphael Bostic expects one more rate hike of 25 basis points before pausing to assess its impact on the economy, while St. Louis Federal Reserve President James Bullard favors a higher terminal rate of between 5.50% and 5.75%.

US Treasury Secretary Janet Yellen will deliver a speech on the US economic priorities for China at Johns Hopkins University`s School of Advanced International Studies on Thursday.

Stocks in Spotlight:

Som Distilleries & Breweries zoomed 7.24% after the company started commercial production at its expanded capacity at the facility in Hassan, Karnataka.

Piramal Pharma jumped 7.93% after the USFDA has issued an Establishment Inspection Report (EIR) for the manufacturing facility located at Sellersville, USA. The inspection has now been successfully closed by the US FDA.

State Bank of India (SBI) fell 1%. The executive committee of the central Board has approved long term fund raising in single / multiple tranches up to US$ 2 billion through a public offer and/or private placement of senior unsecured notes in US Dollar or any other convertible currency during FY 2023-24.

ICICI Lombard General Insurance Company tumbled 4.85%. The company reported net profit of Rs 436.96 crore in Q4 March 2023 as compared to net profit of Rs 312.51 crore in Q4 March 2022. Total income rose to Rs 5255.58 crore in Q4 March 2023 from Rs 4636.34 crore in Q4 March 2022.

A global brokerage firm reportedly said that visibility on underwriting profitability remains poor for the company. It said that the company reported 7% YoY growth in gross direct premium income for Q4FY23 compared to industry growth of 17%. The lower growth was driven mainly by the motor segment which witnessed flat growth.

Bank of India slipped 0.67%. The bank`s board of directors approved the raising of capital for the FY 2023-24 aggregating up to Rs 6,500 crore, through the issue of fresh equity capital in the form of FPO/QIP/Rights issue/preferential issue and/or Basel III compliant additional Tier-1 (AT-1) upto an amount of Rs.4,500 crores, and issue of Basel III compliant Tier-2 bonds upto an amount of Rs.2,000 crore.

Pidilite Industries lost 0.86%. The company has entered into an agreement with Basic Adhesives LLC, USA for purchase of certain assets comprising of technology, design, trademark, copyright, domain name and trade dress etc at an agreed consideration to be paid by company in tranches over a period of time.

Rattanindia Enterprises added 3.73%. The company announced that it has launched direct-to-consumer (D2C) apparel fashion brands business with its wholly owned subsidiary, Neobrands.

CMS Info Systems gained 3.01%. The company announced that the deployment of its proprietary security application `ALGO OTC` across 30% ATMs in India. This application helps banks implement RBI guidelines on OTC lock activation to ensure the mitigation of risks during ATM operations and enhancing security, the company said. The company plans to further implement the software application ALGO OTC to existing 15,000 ATMs of the largest bank in India in CY2023.

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