Sensex drops 200 pts, Nifty ends above 17,200 mark; IT shares climb

The market ended with modest losses on Monday, pressurised by weak global cues. Sentiment continues to remain fragile amid concerns over economic growth and monetary policy tightening from central banks. After opening with sharp cuts, the Nifty 50 index recovered gradually, supported by IT heavyweights. Barring the Nifty IT index, all the sectoral indices on the NSE ended in the red. Consumer durables, FMCG and media shares were under pressure.

The barometer index, the S&P BSE Sensex, declined 200.18 points or 0.34% to 57,991.11. The Nifty 50 index lost 73.65 points or 0.43% to 17,241.

Axis Bank (up 3.04%), HDFC Life Insurance Company (up 1.22%), Wipro (up 1.18%) and Eicher Motors (up 1.13%) were major Nifty gainers.

IT major TCS rose 1.93% ahead of Q2 results today.

In the broader market, the S&P BSE Mid-Cap index slipped 0.87% while the S&P BSE Small-Cap index declined 0.58%.

The market breadth was negative. On the BSE, 1,360 shares rose and 2,207 shares fell. A total of 162 shares were unchanged.

Meanwhile, the NSE`s India VIX, a gauge of the market`s expectation of volatility over the near term, jumped 4.30% to 19.62.

Economy:

India`s forex reserves dropped by $4.9 billion and the country`s reserves declined for a ninth consecutive week for the week ended September 30, 2022. They were $537.52 billion at the end of the previous week. The fall in the foreign exchange reserves can be attributed to a fall in the Foreign Currency Assets (FCA), which is a major component of the overall reserves, according to the Weekly Statistical Supplement released by RBI. Foreign currency assets fell $4.41 billion to $472.81 billion for the same period.

Numbers to Watch:

The yield on India`s 10-year benchmark federal paper rose to 7.479 as compared with 7.460 at close in the previous trading session.

In the foreign exchange market, the rupee declined against the dollar. The partially convertible rupee was hovering at 82.3450, compared with its close of 82.30 during the previous trading session.

MCX Gold futures for 5 December 2022 settlement slipped 1.51% to Rs 51,174.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was up 0.27% to 113.10.

The United States 10-year bond yield added 0.06% to 3.888.

In the commodities market, Brent crude for December 2022 settlement declined 63 cents or 0.64% at $97.29 a barrel. The contract rose $3.5 or 3.71% to settle at $97.92 a barrel during the previous trading session.

Global Markets:

Shares in Europe and Asia declined on Monday after a surprise drop in US unemployment quashed any thought of a pivot on policy tightening ahead of a reading on inflation which is expected to see core prices move higher again.

Chinese investors return from a week-long break. Markets in Japan, South Korea, Taiwan and Malaysia were closed today for holidays.

US stocks tumbled on Friday after data showed the unemployment rate declined in September, sparking fear that the Federal Reserve would continue hiking rates aggressively.

The US economy added 263,000 jobs last month, showing a steady slowdown from the blistering pace in 2020 and 2021, the Labor Department said in the closely-watched report. The unemployment rate slipped two-tenths of a percentage point to 3.5 percent.

Geopolitical tensions added to the uncertainty as markets waited to see how the Kremlin might respond to the blast that hit Russia`s only bridge to Crimea.

Later this week, the Bank of Korea will announce its benchmark interest rate decision, Singapore is set to announce its GDP estimate for the third quarter and China releases inflation data.

Stocks in Spotlight:

Jaiprakash Power Ventures rose 3.80%. The company on Monday said it has decided to sell its cement grinding unit in Nigrie, Madhya Pradesh along with other non-core assets.

Jaiprakash Associates spurted 9.72% after the company said its board decided to divest significant cement business. Jaiprakash Associates announced, "with a view to give thrust to the ongoing efforts of the Company to reduce its debt, the Board of Directors in their meeting held today, the 10th October, 2022, have, inter-alia, decided to divest Company`s significant Cement business."

One 97 Communications (Paytm) rose 2.75%. The company said that its lending business witnessed a 224% year on year (YoY) growth during the quarter ending September 2022. The number of loans disbursed through the company`s platform zoomed 224% YoY to 9.2 million loans in the quarter ended September 2022, while the value of loans disbursed grew 482% YoY to Rs 7,313 crore ($894 million). The company said that its loan distribution business (in partnership with top lenders) continues to witness accelerated growth with disbursements through its platform stood at an annualised run rate of Rs 34,000 crore in the month of September.

Tata Motors slipped 3.94%. Tata Motors said that Jaguar Land Rover`s retail sales in Q2 stood at 88,121 vehicles, an increase of 9,296 units or 11.8% as compared with the previous quarter ending 30 June 2022. The retail sales are, however, lower by 4.9% in comparison to the second quarter of FY22.

IDBI Bank spurted 9.02% after the government invited bids for privatising the bank. The government is offering to sell 30.48% of its stake in the bank, and Life Insurance Corporation of India (LIC) will 30.24%, aggregating to 60.72% of IDBI Bank`s share capital, along with transfer of management control in the lender. Currently, GoI holds 45.48% and LIC holds 49.24% of the total equity share capital of IDBI Bank.

Atul Auto surged 7.48% to Rs 230 after the company said its board approved issuing 58,08,080 fully convertible warrants, aggregating upto Rs 115 crore. The company will issue the warrants on preferential issue basis to three specified investors. Each warrant is convertible (within 18 months) into equivalent number of equity share of Rs 198 each.

The company will allot 50,50,505 warrants to Vijay Kishanlal Kedia (non-promoter); 6,56,565 warrants to Khushbu Auto (promoter); and 1,01,010 warrants to Jayantibhai Jagjivanbhai Chandra (promoter).

Computer Age Management Services (CAMS) advanced 2.78% after the company announced that its board will meet on Monday, 17 October 2022 for considering of enhancing equity investment in wholly owned subsidiary, CAMS Financial Information Services.

Shreeji Translogistics (STL) rose 3.97% after the company said that it added United Parcel Service (UPS) as its clients in the bonded trucking division. Commenting on the announcement, the management team of Shreeji Translogistics, stated that this association is expected to yield an annual revenue of approximately Rs 25-30 million.

Veranda Learning Solutions rose 2.28% after the company said its board will meet on Wednesday, 12 October 2022, to consider potential acquisition.

Universus Photo Imagings hit an upper circuit limit of 20% at Rs 677.75 after the company said its board will consider a one-time special interim dividend on 12 October 2022.

International Travel House jumped 11.78% after the company reported a net profit of Rs 4.52 crore in Q2 FY23 as against a net loss of Rs 3.67 crore in Q2 FY22. Revenue from operations rose by 92.59% YoY to Rs 45.38 crore during the quarter.

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