MARKET TUMBLES IN EARLY TRADE, NIFTY BELOW 22,450

The headline equity indices traded with major losses in early trade. The Nifty traded below the 22,450 mark. All the sectorial indices on NSE were in the red with PSU bank, oil & gas and metal shares losing the most.

Meanwhile, vote counting for the Lok Sabha elections commenced this morning. Prime Minister Narendra Modi is predicted to secure a historic third term in office. This outcome is anticipated to positively impact the Indian financial markets, with hopes of further economic reforms.

At 09:30 IST, the barometer index, the S&P BSE Sensex was tumbled 2719.93 points or 3.52% to 73,750.16. The Nifty 50 index fell 847.60 points or 3.64% to 22,416.30.

In the broader market, The S&P BSE Mid-Cap index dropped 3.93% and the S&P BSE Small-Cap index declined 3.77%.

The market breadth was weak. On the BSE, 441 shares rose and 2,590 shares fell. A total of 95 shares were unchanged.

Foreign portfolio investors (FPIs) bought shares worth Rs 6,850.76 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 1,913.98 crore in the Indian equity market on 3 June 2024, provisional data showed.

Stocks in Spotlight:

Zee Entertainment declined 2.33%. The company said that its board will meet on Thursday, 6 June 2024 to consider raising funds through various methods.

Rail Vikas Nigam fell 5.74%. The company received an EPC order worth Rs 440 crore from South Central Railway.

Adani Power tumbled 8.71%. The company plans to amalgamate its subsidiary, Mahan Energen, with Stratatech Mineral Resources to enhance fuel security and competitiveness in the power market.

Numbers to Track:

The yield on India`s 10-year benchmark federal rose 0.95% to 7.013 as compared with previous close 6.947.

In the foreign exchange market, the rupee is edged lower against the dollar. The partially convertible rupee was hovering at 83.3850, compared with its close of 83.1450 during the previous trading session.

MCX Gold futures for 5 June 2024 settlement gained 0.58% to Rs 72,144.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was down 0.07% to 104.07.

The United States 10-year bond yield grew 0.18% to 4.407.

In the commodities market, Brent crude for July 2024 settlement lost 54 cents or 0.69% to $ 77.82 a barrel.

Global Markets:

Most of the Asian stocks declined on Tuesday. This comes as global investors grapple with the possibility that the exceptional growth of the US economy might be coming to an end. This concern stems from further signs of weakness in US manufacturing activity.

Oil prices continued their decline, with both US crude ($73.91/barrel) and Brent crude ($78/barrel) reaching four-month lows. This follows the decision by OPEC+ to gradually increase production, reducing overall output cuts.

US stocks opened June on a negative note. The Dow Jones Industrial Average fell after weak manufacturing data raised doubts about the economy`s strength. Sectors reliant on economic growth, such as banks and industrials, led the decline. Despite the Dow`s decline, the broader S&P 500 and tech-heavy Nasdaq Composite managed small gains.

The U.S. manufacturing sector showed signs of slowing, with the ISM manufacturing index measuring 48.7 in May, sending Treasury yields and the dollar lower. A reading below 50 is an indication of a contraction.

On Monday, U.S. Treasury yields fell to the lowest point in two weeks. The 2-year yield was 6 basis points lower while the 10-year yield was down 11 basis points.

On a brighter note, chipmaker Nvidia defied the market trend with a near 5% surge on Monday. This rise came after the company announced a new line of artificial intelligence chips, showcasing their commitment to staying competitive in the rapidly evolving market.

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