Mkt drops for 2nd day; Nifty slips below 17500; VIX crosses 19 mark

The headline equity indices tumbled on Monday, tracking negative global cues. Rising dollar index and higher US 10-year bond yield spooked investors. The Nifty closed below the 17,500 level. All the sectoral indices on the NSE ended in the red. Banks, metals and realty shares dropped.

The barometer index, the S&P BSE Sensex, slumped 872.28 points or 1.46% to 58,773.87. The Nifty 50 index lost 267.75 points or 1.51% to 17,490.70. Both the indices fell over 2.5% in two consecutive sessions.

In the broader market, the S&P BSE Mid-Cap index fell 1.80% while the S&P BSE Small-Cap index shed 1.17%.

The market breadth was weak. On the BSE, 1,172 shares rose and 2,387 shares fell. A total of 147 shares were unchanged.

Meanwhile, the NSE`s India VIX, a gauge of the market`s expectation of volatility over the near term, climbed 4.11% to 19.04.

Tata Steel (down 4.50%), Asian Paints (down 3.82%), ICICI Bank (down 2.09%), HDFC Bank (down 1.56%) and Infosys (down 1.37%) were top drags.

Numbers to Track:

The yield on India`s 10-year benchmark federal paper rose to 7.267 compared with 7.264 at close in the previous trading session.

In the foreign exchange market, the partially convertible rupee was flat at 79.84.

MCX Gold futures for 5 October 2022 settlement declined 0.66% to Rs 51,140.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, added 0.16% to 108.34.

The 10-year U.S. Treasury yield touched 3.003% mark for the first time in a month on Monday.

In the commodities market, Brent crude for October 2022 settlement fell 24 cents or 0.25% at $96.48 a barrel.

Global Markets:

The Dow Jones index futures were down 282 points, indicating a negative opening in the US stocks today.

Shares in Europe and Asia tumbled on Monday as concerns over aggressive Fed hikes reemerged.

Risk sentiment was dampened by hawkish signals from European Central Bank (ECB) policymakers, with Bundesbank President Joachim Nagel telling a German newspaper that the ECB must continue hiking interest rates even as recession risks in Germany grow.

Meanwhile, the People`s Bank of China cut its one-year benchmark lending rate by 5 basis points and its five-year rate by 15 basis points, according to an online statement. That brings the one-year loan prime rate to 3.65% and the five-year LPR to 4.3%.

US stocks fell on Friday with traders anxious about inflation and what the Federal Reserve will do to combat it.

Fed Chairman Jerome Powell is expected to speak at the central bank`s annual symposium in Jackson Hole, Wyoming this week, and shed some light on the pace of future interest rate hikes.

Stocks in Spotlight:

Larsen & Toubro (L&T) fell 2.87%. The EPC major said that the hydrocarbon-onshore division of L&T Energy business has been awarded a large contract from Indian Oil Corporation (IOCL). As per L&T`s classification, the value of the large project is 2,500 crore to 5,000 crore.

Separately, on 20 August 2022, L&T said that it has commissioned a green hydrogen plant at its AM Naik Heavy Engineering Complex in Hazira, Gujarat on Friday post market hours. The production of green hydrogen based on an alkaline electrolysis process has on 20 August 2022. The plant will produce 45 Kg of green hydrogen daily, which will be used for captive consumption in the company`s Hazira manufacturing complex.

One97 Communications (Paytm) rose 0.62%. Shareholders of One97 Communications, which operates the financial services platform Paytm, have approved the re-appointment of Vijay Shekhar Sharma as managing director and chief executive officer of the company.

Adani Power hit an upper circuit of 5% after the company said that it has agreed to acquire DB Power, which owns and operates a running 2x600 MW thermal power plant at Janjgir Champa District in Chhattisgarh. The proposed transaction is subject to receipt of approval from the Competition Commission of India and any other approvals as may be identified following the due diligence exercise to be conducted with respect to DPPL and DB Power. The initial term of the MOU shall be till 31 October 2022, which may be extended by mutual agreement.

Gillette India advanced 3.39% after the company`s standalone net profit jumped 145.5% to Rs 67.59 crore on 26.8% increase in revenue operations to Rs 552.89 crore in quarter ended June 2022 over quarter ended June 2021.

The company said net sales was driven by its superiority strategy and strong brand fundamentals. The profit after tax (PAT) was supported by strong sales growth and productivity in the current quarter, as well as higher investment in brand building activities in the base period.

Ratnamani Metals & Tubes shed 0.68%. The company said that it has received new orders aggregating to Rs 1,186 crore in the first fortnight of current month. The company has bagged domestic orders aggregating to Rs 1083 crore to be executed over next 4 to 24 months.

Shilpa Medicare rose 0.68% after the company said that its subsidiary, Shilpa Biologicals (SBPL), has completed the phase 3 Human Clinical studies of its first biosimilar, the 100mg/ml high concentration (HC) Adalimumab biosimilar. The company said that it has submitted the dossier to the Central Drugs Standard Control Organisation (CDSCO) for review and grant of marketing/manufacturing license.

Greenlam Industries rallied 3.17% after the company announced that its recently acquired laminate manufacturing facility in Gujarat commenced commercial production on 20 August 2022. The facility currently has an installed capacity of 3.4 million laminate sheet per annum. It has potential to generate revenue of Rs 150 crore per annum on full capacity utilization.

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