Market succumbs to fag-end sell-off; Nifty ends below 16,600

The domestic equity benchmarks wiped intraday gains and ended with tiny losses on Friday. After hitting the day`s high of 16,793.85 in early trade, the Nifty 50 index moved lower as the session progressed and turned negative in late trade. The market witnessed steep selling in the final hour of the trade. Cement stocks crashed as UltraTech`s capex plan sparked competition fear. Autos, metals and banks shares tumbled. However, IT and oil & gas shares bucked the trend.

The barometer index, the S&P BSE Sensex, fell 48.88 points or 0.09% to 55,769.23. The Nifty 50 index slipped 43.70 points or 0.26% to 16,584.30.

The broader dropped sharply. The S&P BSE Mid-Cap index fell 1.45% while the S&P BSE Small-Cap index declined 1.16%.

Sellers outnumbered buyers. On the BSE 1,367 shares rose while 1,969 shares fell. A total of 130 shares were unchanged.

COVID-19 Update:

India`s active caseload currently stands at 21,177. In the last 24 hours, 4,041 new cases and 2,363 recoveries have been recorded. The daily positivity rate is 0.95%. The recovery rate currently is at 98.74%. Under Nationwide Vaccination Drive, 193.83 cr vaccine doses have been administered so far.

Economy:

The seasonally adjusted S&P Global India Services PMI Business Activity Index stood at 58.9 in May, up from 57.9 in April. The latest figure indicated the fastest rate of expansion in over 11 years.

Meanwhile, the S&P Global India Composite PMI Output Index rose to 58.3 in May, from 57.6 in April. The latest figure pointed to the fastest rate of expansion since last November.

India`s merchandise exports rose by 15.46% to $37.29 billion in May 2022 on account of healthy performance by sectors like petroleum products, electronic goods and chemicals, even as the trade deficit widened to $23.33 billion during the month. Imports during the month too grew by 56.14% to $60.62 billion. The surge was driven by petroleum and crude oil imports, which increased by 91.6% to $18.14 billion.

The trade deficit, in the same month last year, stood at $6.53 billion. The period was marked by a second COVID-19 wave, which dampened the international trade. According to data released by the Ministry of Commerce and Industry on Thursday, India`s merchandise export in April-May 2022-23 was $77.08 billion with an increase of 22.26% over $63.05 billion in April-May 2021-22.

Numbers to Watch:

The yield on India`s 10-year benchmark federal paper rose to 7.460 as compared with 7.434 at close in the previous trading session.

In the foreign exchange market, the rupee was lower against the dollar. The partially convertible rupee was hovering at 77.6350, compared with its close of 77.60 during the previous trading session.

MCX Gold futures for 5 August 2022 settlement rose 0.01% to Rs 51,273.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, increased 0.01% to 101.83.

In the commodities market, Brent crude for August 2022 settlement declined $1.01 or 0.86% at $117.20 a barrel. The contract rose $1.32 cents or 1.14% to settle at $117.61 a barrel during the previous trading session.

The Organization of the Petroleum Exporting Countries (OPEC) agreed on Thursday to pump more crude oil over the next two months as Russian production begins to drop because of Western sanctions.

Global Markets:

The Dow Jones futures were down 105 points, indicating a negative opening in the US stock market today.

Most European shares declined while most Asian shares advanced today. Markets in mainland China, Hong Kong and Taiwan were closed for a holiday.

In the US, the three major indices snapped two-day losing streaks. The S&P 500 jumped 1.84% to 4,176.82. The Dow Jones Industrial Average climbed 435.05 points, or 1.33%, to 33,248.28. The tech-heavy Nasdaq Composite surged 2.69% to 12,316.90.

New Listing:

Shares of Aether Industries hit an upper circuit of Rs 776.75 on the BSE, a premium of 20.99% compared with the issue price of Rs 642.

The scrip was listed at Rs 706.15, representing a premium of 9.99% compared with the IPO price.

The scrip hit a low of Rs 699.85 during the day. Over 5.71 lakh shares of the company changed hands in the counter.

The IPO of Aether was subscribed 6.26 times. The issue opened for bidding on Tuesday (24 May 2022) and it closed on Thursday (26 May 2022). The price band of the IPO was fixed at Rs 610-642 per share.

Buzzing Segment:

Cement stocks tumbled after UltraTech announced Rs 12,886 crore capex plan as competition grows in cement sector.

Ramco Cements (down 9.48%), J K Cement (down 8.31%), J K Lakshmi Cement (down 5.07%), Shree Cement (down 4.42%), Sagar Cements (down 3.04%), Nuvoco Vistas Corp (down 3.96%), Deccan Cements (down 2.53%), ACC (down 2.25%) and Ambuja Cements (down 1.30%) tumbled.

Ultratech Cement fell 5.49%. The company said that its board has approved capex of Rs 12,886 crore towards increasing capacity by 22.6 MTPA, with a mix of brown field and green field expansion. This would be achieved by setting-up integrated and grinding units as well as bulk terminals. The additional capacity will be created across the country. The capex would be funded via a mix of debt and internal accruals.

Commercial production from these new capacities is expected to go on stream in a phased manner, by FY25. UltraTech`s current expansion program is on track and estimated to be completed by the end of FY23. Upon completion of the latest round of expansion, the company`s capacity will grow to 159.25 MTPA, reinforcing its position as the third largest cement company in the world, outside of China.

Stocks in Spotlight:

Deepak Nitrite slipped 4.32% after the company informed that a fire incident took place around warehouse section of its manufacturing site tocated at Nandesari, district Vadodara, in Gujarat. The incidence occurred on 2nd June 2022 at around 6:00 P.M. lmpact of the incidence is being ascertained. There were no casualties. Both, loss of assets as well as loss of business are covered under insurance.

Va Tech Wabag rallied 3.04% after the company announced that it secured consortium order for 50 million litres per day (MLD) desalination project in Senegal, worth about 146 million euros. The company secured a consortium design, build, operate (DBO) order, for the 50 MLD (expandable to 100 MLD) Mamelles Sea Water Desalination Project from the National Water Company of Senegal, Soci�t� Nationale Des Eaux du S�n�gal (SONES). The order is worth 146 million euros.

Adani Ports and Special Economic Zone fell 1.23% after the company said that it had handled a cargo volume of 30.37 MMT in May 2022, implying 4% YoY growth. Total coal volumes increased 6% YoY, on the back of thermal coal growth of 5% and coking coal by 9%. Despite record crude prices, volumes jumped 15% YoY. Key ports reflecting this volume growth are Mundra (7%), Dhamra (35%), Dahej (42%) and Kattupalli & Ennore combined (50%).

Mahindra & Mahindra Financial Services gained 0.59% after the company recorded disbursement of approximately Rs 2,973 crore in May 2022, delivering a 272% YoY growth. The YTD disbursements at approximately Rs 5,686 crore, registered a YoY growth of 169%. The collection efficiency (CE) was at 95% for May 2022 in comparison to a subdued CE of 67% for May 2021 which was affected due to Covid related lockdowns. The CE is in line with pre-Covid levels. "With momentum in collections witnessed so far, we expect a lower volatility on Stage 3 assets during Q1 FY 2023," Mahindra Financial said in a statement. The company continued to hold adequate liquidity buffer of approximately Rs 8,775 crore as on 31 May 2022 which covers approximately 3 months funds requirement.

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