Profit taking trips up benchmarks as investors eye polls

Domestic equity benchmarks surged to new highs today, mirroring global optimism, but a late-day sell-off erased all gains. The Nifty 50 settled below the 22,950 mark after hitting the day`s high of 22,110.80 in early afternoon trade. Analysts point to profit-taking ahead of next week`s election results. Despite the wobble, the market remains near record highs, suggesting underlying strength. Another positive sign is the decline in FII selling.

The barometer index, the S&P BSE Sensex declined 19.89 points or 0.03% to 75,390.50. The Nifty 50 index lost 24.65 points or 0.11% to 22,932.45.

Adani Enterprises (down 2.85%), ITC (down 1.05%) and Reliance Industries (down 0.92%) were major drags.

The Sensex and Nifty clocked an all-time high of 76,009.68 and 23,110.80 respectively in early afternoon trade.

In the broader market, the S&P BSE Mid-Cap index rose 0.63% and the S&P BSE Small-Cap index shed 0.09%.

The market breadth was negative. On the BSE, 1650 shares rose and 2323 shares fell. A total of 132 shares were unchanged.

The NSE`s India VIX, a gauge of market`s expectation of volatility over the near term, jumped 6.82% to 23.19.

India Monsoon:

The India Meteorological Department (IMD) predicts the monsoon will arrive over Kerala in the next 5 days. June rainfall is expected to be average. Central India is likely to receive above normal rainfall this monsoon season. Northwest and central India can expect some relief from the heat in three days. La Nina weather conditions are predicted to develop during July-September.

Economy:

India�s forex reserves jumped $4.549 billion to a new all-time high of $648.7 billion for the week ended May 17, the Reserve Bank said on Friday.

Gold reserves increased $1.244 billion to $57.195 billion during the week, the RBI said. The Special Drawing Rights (SDRs) were up $113 million to $18.168 billion, the apex bank said.

India�s reserve position with the IMF was down $168 million to $4.327 billion in the reporting week, the apex bank data showed.

Numbers to Track:

The yield on India`s 10-year benchmark federal paper shed 0.26% to 6.980 as compared with previous close 6.998.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 83.1300, compared with its close of 83.1000 during the previous trading session.

MCX Gold futures for 5 June 2024 settlement rose 0.48% to Rs 72,290.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was down 0.06% to 104.67.

The United States 10-year bond yield fell 0.36% to 4.457.

In the commodities market, Brent crude for July 2024 settlement gained 45 cents or 0.55% to $82.57 a barrel.

Global Markets:

Shares in Europe and Asia advanced on Monday as an easing in US consumer inflation expectations bolstered the case for the Federal Reserve to cut rates this year.

US stocks rebounded on Friday, buoyed by news of an improving consumer outlook on inflation. The Nasdaq rose for a fifth straight week, closing at a record high. The Dow Jones Industrial Average edged up slightly, while the S&P 500 gained modestly.

University of Michigan data showed that consumers expect prices to climb at a 3.3% annual rate over the next year, down from the 3.5% expected earlier in the month. This suggests that inflation pressures may be easing, which could lead the Federal Reserve to cut interest rates later this year.

IPO Update:

The initial public offer (IPO) of Awfis Space Solutions received 93,34,40,157 bids for shares as against 86,29,670 shares on offer, according to stock exchange data at 17:00 IST on Monday (27 May 2024). The issue was subscribed 108.17 times.

The issue opened for bidding on Wednesday (22 May 2024) and it will close on Monday (27 May 2024). The price band of the IPO is fixed between Rs 364 to Rs 383 per share. An investor can bid for a minimum of 39 equity shares and in multiples thereof.

Stocks in Spotlight:

Adani Ports and Special Economic Zone (+1.13%) will replace Wipro (-2.36%) from the BSE Sensex.

MM Forgings surged 12% as the company will consider issuing bonus shares on May 29th.

Divi`s Laboratories gained 3.18% after the company`s consolidated net profit jumped 67.6% to Rs 538 crore on 18.04% rise in revenue from operations to Rs 2,303 crore in Q4 FY24 over Q4 FY23.

Astra Microwave Products rallied 10% after the company reported a consolidated net profit of Rs 54.40 crore in Q4 FY24, steeply higher than Rs 13.52 crore posted in Q4 FY23. Revenue from operations jumped 36.96% year on year to Rs 353.96 crore in Q4 FY24 as compared to Rs 258.44 crore recorded in Q4 FY23.

HBL Power Systems advanced 3% after the company reported a net profit of Rs 81.14 crore in Q4 FY24, which is sharply higher as compared with the PAT of Rs 34.80 crore recorded in Q4 FY23. Income from operations rose by 52% year-over-year to Rs 610.08 crore during the quarter.

Affle India added 1.93% after the company`s consolidated net profit jumped 40.21% to Rs 87.49 crore on 42.27% increase in net sales to Rs 506.22 crore in Q4 FY24 over Q4 FY23.

Paras Defence and Space Technologies rallied 4.24% after the company�s consolidated net profit jumped 63.82%to Rs 96 crore in Q4 FY24 as compared with Rs 58.6 crore in Q3 FY24. Revenue from operations increased by 24.17% QoQ to Rs 79.69 crore in Q4 FY24.

Kolte-Patil Developers dropped 6.80% after the company reported consolidated net loss of Rs 26.18 crore in Q4 FY24 as against net profit of Rs 121.33 crore in Q4 FY23. Revenue from operations declined 33.94% to Rs 526.38 in Q4 FY24 over Q4 FY23.

Glenmark Pharmaceuticals rallied 8.20% despite reporting weak quarterly earnings. This is because the company`s management expects strong financial performance in the coming year, including double-digit profit growth and 10-11% revenue growth.

The drug maker reported net loss of Rs 1,238.64 crore in Q4 FY24 as compared with net loss of Rs 549.49 crore in Q4 FY23. Revenue from operations increased 1.94% to Rs 3,016.00 crore in Q4 FY24 as compared with Rs 2,958.36 crore in Q4 FY23.

Electronics Mart India slipped 3.28%. The company reported 12% rise in net profit to Rs 40.5 crore on a 15% increase in revenue from operations to Rs 1,524.2 crore in Q4 FY24 as compared with Q4 FY23.

Best Agrolife declined 5.52%. The company�s consolidated net loss widened to Rs 72.49 crore in Q4 FY24 as compared to Rs 8.41 crore recorded in Q4 FY23. The company recorded revenue of Rs 135.39 crore, down 46.67% over Rs 253.9 crore in Q4 FY23, due to an unexpected seasonal failure, of Q3 and Q4 of FY24 as against normal seasonal conditions in same period last year, leading to lower-than-expected sales coupled with surge in sales returns.

Aurobindo Pharma declined 3.19%. The company reported 79.5% jump in consolidated net profit to Rs 908.75 crore on a 17.1% rise in revenue from operations to Rs 7,580.15 crore in Q4 FY24 over Q4 FY23.

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