Sensex, Nifty pare gains, breadth turns negative

The key equity indices sharply pared gains in mid-afternoon trade as profit selling emerged at higher levels. The Nifty slipped below the 16,650 mark. Auto stocks declined for the third sessions.

At 14:30 IST, the barometer index, S&P BSE Sensex was up 134.01 points or 0.24% to 55,952.12. The Nifty 50 index rose 7.95 points or 0.04% to 16,635.95.

The broader market tumbled. The S&P BSE Mid-Cap index fell 1.17% while the S&P BSE Small-Cap index declined 0.88%.

The market breadth turned negative. On the BSE, 1,425 shares rose while 1,860 shares fell. A total of 136 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 Track:

The yield on India`s 10-year benchmark federal paper rose to 7.462 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 77.64, compared with its close of 77.60 during the previous trading session.

MCX Gold futures for 5 August 2022 settlement rose 0.10% to Rs 51,322.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, decreased 0.12% to 101.70.

In the commodities market, Brent crude for August 2022 settlement fell 41cents or 0.35% at $117.20 a barrel. 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.

Buzzing Index:

The Nifty Auto index fell 1.11% to 11,363.40. The index shed 1.93% in three trading sessions.

Among the components of the Nifty Auto index, Bharat Forge (down 2.8%), Maruti Suzuki India (down 2.62%), Hero MotoCorp (down 2.15%), Eicher Motors (down 1.98%) and Ashok Leyland (down 1.95%) were the top losers.

Among the other losers were Balkrishna Industries (down 1.85%), Bosch (down 1.46%), Tata Motors (down 1.35%), Mahindra & Mahindra (down 0.89%) and TVS Motor Company (down 0.85%).

On the other hand, MRF (up 0.65%) and Sona BLW Precision Forgings (up 0.12%) advanced.

Stocks in Spotlight:

Mahindra & Mahindra Financial Services advanced 1.59% 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.

Va Tech Wabag rallied 3% 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.

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