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Sensex down 325 pts; auto stocks rally

Published on Feb 03, 2022 11:32

The main indices declined further and hit the day`s low in mid-morning trade amid profit selling after a three-day rally. The Nifty traded below the 17,700 mark. Auto, media and consumer durables stocks were trading firm while banks and IT shares were under pressure.

At 11:29 IST, the barometer index, the S&P BSE Sensex, declined 325.51 points or 0.55% at 59,232.27. The Nifty 50 index fell 82.1 points or 0.46% at 17,697.90.

In the broader market, the S&P BSE Mid-Cap index fell 0.46% while the S&P BSE Small-Cap index gained 0.04%.

The market breadth was positive. On the BSE, 1,802 shares rose and 1410 shares fell. A total of 96 shares were unchanged.

Economy:

IHS Markit India Services PMI came at 51.5 in January 2022 lower than 55.5 posted in December 2021. The headline figure pointed to the slowest rate of expansion in the current six month sequence of growth. The upturn was reportedly stymied by the intensification of the pandemic, the reintroduction of restrictions and inflationary pressures.

Commenting on the latest survey results, Pollyanna De Lima, Economics Associate Director at IHS Markit said, �The escalation of the pandemic and reintroduction of curfews had a detrimental impact on growth across the service sector. Both new business and output rose at slight rates that were the weakest in six months. Concerns about how long the current wave of COVID-19 will last dampened business confidence and caused job shedding. Firms were also alarmed about price pressures. On this front, the latest PMI results brought worrying news as input prices increased at the sharpest rate in over a decade. Charges rose at a faster pace as some firms continued to transfer additional cost burdens to consumers, but the rate of inflation here was moderate as the vast majority of monitored companies left their fees unchanged since December. Private sector growth was sustained at the start of the year but, with the slowdown seen in services mirrored by manufacturing, there were weaker expansions in aggregate sales and output.�

Buzzing Index:

The Nifty Auto index added 1.72% to 11,832.15, rising for second trading session in a row. The auto index added nearly 2% in two days.

TVS Motor Company (up 4.94%), Hero MotoCorp (up 3.61%), Tube Investments of India (up 3.01%), Ashok Leyland (up 2.65%) and Maruti Suzuki India (up 2.43%) were the top gainers. Among the other gainers were Bajaj Auto (up 2.35%), Escorts (up 1.25%), Balkrishna Industries (up 1.05%), Mahindra & Mahindra (up 0.96%) and Tata Motors (up 0.67%) were top gainers in auto space.

Stocks in Spotlight:

Angel One added 1.03% to Rs 1424.10 after the brokerage said that its client base had risen 7.2% to 8.34 million in January 2022 from 7.78 million in December 2021. The company`s client base was 3.46 million in January 2021. Gross client acquisition was 0.54 million in January 2022 as compared with 0.46 million in December 2021 and 0.28 million in January 2021. The company`s retail turnover market share in overall equity segment was 21.1% in January 2022 as against 20.8% in December 2021 and 19.7% in January 2021.

Balaji Amines jumped 6.49% to Rs 3584.65 after the company`s net profit rose 19.46% to Rs 89.56 crore on 44.06% increase in revenue from operations to Rs 564.90 crore in Q3 FY22 over Q3 FY21. The revenue growth was muted sequentially as compared to previous quarter due to sluggish demand for few products as few of the company`s clients could not procure Key Starting Materials (KSMs) for some of the company`s matching products. At the same time, the company had to shut down the plants of DMF & Acetonitrile for a brief period to carry out the de-bottlenecking exercise, which were completed in the month of November 2021.

Profit before tax rose 38.48% to Rs 144.52 crore in Q3 FY22 over Q3 FY21. EBITDA rose 35.45% year-on-year to Rs 159.67 crore in Q3 FY22. EBITDA margin stood at 28.22% in Q3 FY22, higher than 25.39% in Q2 FY22 and lower than 30.02% in Q3 FY21.

Global Markets:

Asian stocks were mixed on Thursday amid some lingering concerns about global growth and ongoing geopolitical tensions. A number of major markets, including those on the Chinese mainland and in Hong Kong, remain shut for the Lunar New Year holidays.

US stocks rose for a fourth straight day Wednesday, as Alphabet propelled gains in tech thanks to strong quarterly earnings. Shares of Google-parent Alphabet surged after its quarterly numbers topped analyst expectations. The company also announced a 20-for-1 stock split.

On the data front, investors are awaiting the U.S. Labor Department`s nonfarm payroll count due Friday, which is seen as one of the major indicators of the how the U.S. economy is doing.

Meanwhile, geopolitical tensions in eastern Europe remained at heightened levels after the Pentagon reportedly said it will move some of its Europe-based forces further east and deploy additional U.S.-based troops to Europe.

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