Sensex drops 306 pts, snaps 6-day streak; Nifty holds 16,600; NSE VIX climbs over 6%

The key equity indices ended with modest losses on Monday, snapping a six-day rising streak. The Nifty managed to close above the 16,600 level after hitting the day`s low of 16,564.25 in the mid-morning trade. Metals and IT shares bucked the trend while auto shares dragged the indices lower.

The barometer index, the S&P BSE Sensex, declined 306.01 points or 0.55% to 55,766.22. The Nifty 50 index lost 88.45 points or 0.53% to 16,631.

The Sensex climbed 4.97% while the Nifty added 4.90% in the past six sessions.

In the broader market, the S&P BSE Mid-Cap index rose 0.03% while the S&P BSE Small-Cap index declined 0.13%.

The market breadth was negative. On the BSE, 1,472 shares rose and 1,952 shares fell. A total of 174 shares were unchanged.

Meanwhile, the NSE`s VIX index, a gauge of the market`s expectation of volatility over the near term, surged 6.18% to 17.68.

Numbers to Watch:

The yield on India`s 10-year benchmark federal paper declined to 7.393 as compared with 7.414 at close in the previous trading session.

In the foreign exchange market, the rupee was higher against the dollar. The partially convertible rupee was hovering at 79.76, compared with its close of 79.90 during the previous trading session.

MCX Gold futures for 5 August 2022 settlement rose 0.08% to Rs 50,413.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, fell 0.33% to 106.38.

In the commodities market, Brent crude for September 2022 settlement rose $1.02 or 0.99% at $104.22 a barrel. The contract fell 66 cents or 0.64% to settle at $103.2 a barrel during the previous trading session.

Foreign Markets:

The Dow Jones index futures were up 179 points, indicating a positive opening the US stock market today.

European shares rose across the board while most Asian stocks declined on Monday.

Last week, the European Central Bank kick-started its own hiking cycle with a 50 basis point increase, which was larger than previously suggested.

Hawkish ECB policymaker Robert Holzmann told an Austrian broadcaster on Sunday that the Governing Council will consider the economic landscape across the euro zone before determining whether another big rate hike will be feasible in September.

US stocks ended lower on Friday as disappointing earnings from Snap spooked investors and shares in social media and ad-tech firms dropped, offsetting gains from card issuer American Express following an upbeat forecast.

Later this week, all eyes will be on the Fed rate decision and the release of second quarter gross domestic product data in the U.S. The US Federal Reserve will opt for another 75 basis point rate hike rather than a larger move at its meeting next week to quell stubbornly-high inflation, as per reports.

Over the weekend, the World Health Organization declared monkeypox a global health emergency. The organization`s emergency committee was unable to reach a consensus, but WHO chief Tedros Adhanom Ghebreyesus made the decision to issue the highest alert, though he said it is unlikely to disrupt global trade or travel at the moment.

Buzzing Segment:

The Nifty Auto index fell 1.67% to 12,423.70. The index rose 0.98% in the past two sessions.

Mahindra & Mahindra (down 3.99%), Maruti Suzuki India (down 2.5%), Eicher Motors (down 2.21%), TVS Motor Company (down 1.89%), Bosch (down 1.84%), Hero MotoCorp (down 1.37%), Tata Motors (down 1.22%), Escorts (down 1.21%), Sona BLW Precision Forgings (down 0.88%), Tube Investments of India (down 0.77%), Bajaj Auto (down 0.74%), Bharat Forge (down 0.54%) and Ashok Leyland (down 0.41%) declined.

Stocks in Spotlight:

Reliance Industries (RIL) fell 3.31%. The Mukesh Ambani-led diversified company reported 40.8% increase in consolidated net profit to Rs 19,443 crore on 56.7% increase in net sales to Rs 2,19,304 crore in Q1 June 2022 over Q1 June 2021. EBITDA jumped 45.8% YoY to Rs 40,179 crore during the quarter, driven by strong contribution from O2C business, even as other businesses contributed positively to growth.

Infosys declined 0.23%. The IT major`s consolidated net profit dropped 5.7% to Rs 5360 crore on 6.8% rise in revenue to Rs 34470 crore in Q1 FY23 over Q4 FY22. On a year on year (YoY) basis, Infosys` net profit and revenue in Q1 FY23 increased 3.2% and 23.6%, respectively. In dollar terms, the company reported revenues of $4,444 million, registering a growth of 17.5% YoY for the quarter ended 30 June 2022.

ICICI Bank rose 0.11%. The bank reported standalone net profit of Rs 6,905 crore in Q1 June 2022 as against a net profit of Rs 4,616 crore in Q1 June 2021. Net interest income (NII) increased 21% year on year to Rs 13,210 crore in Q1 FY23 from Rs 10,936 crore posted in Q1 FY22.

Kotak Mahindra Bank fell 1.74%. The bank reported 26% rise in standalone net profit to Rs 2071 crore on 19% rise in net interest income to Rs 4697 crore in Q1 June 2022 over in Q1 June 2021. Profit before tax advanced 26.2% year on year to Rs 2,759.67 crore in Q1 June 2022.

Yes Bank slipped 3.20%. The bank reported 50.2% jump in standalone net profit to Rs 310.63 crore on 9.7% increase in total income to Rs 5,916.28 crore in Q1 FY23 over Q1 FY22. Net interest income (NII) stood at Rs 1,850 crore for Q1FY23, up 32% Y-o-Y and 2% Q-o-Q. The bank`s provisions and contingencies (excluding tax provisions) sharply declined by 61.8% to Rs 175 crore in Q1 FY23, primarily aided by lower slippages.

Navin Fluorine International surged 11.01%. The company`s consolidated net profit surged 33.2% to Rs 74.45 crore on 21.7% rise in net sales to Rs 397.52 crore in Q1 FY23 over Q1 FY22.

JSW Steel rose 0.49%. The company`s consolidated net profit slumped 85.81% to Rs 838 crore in Q1 FY23 as against Rs 5,904 crore recorded in Q1 FY22. Revenue from operations surged 31.78% to Rs 38,086 crore in Q1 FY23 compared with Rs 28,902 crore in the same quarter last year.

HFCL slumped 7.53%. The company`s consolidated net profit (from continuing operations) tumbled 41.45% to Rs 53.10 crore on 12.9% decline in net sales to Rs 1,051.02 crore in Q1 FY23 over Q1 FY22.

Finolex Industries tumbled 5.68% after the company`s standalone net profit tumbled 31.8% to Rs 100.09 crore in Q1 FY23 as against Rs 146.80 crore recorded in Q1 FY22. Total income from operations surged 23.2% to Rs 1,189.81 crore in a quarter ended 30 June 2022 from Rs 965.72 crore reported in same period last year.

Jyothy Labs rose 1.31%. The company reported 18.7% rise in consolidated net profit to Rs 47.7 crore on a 13.7% increase in revenue from operations to Rs 597 crore in Q1 FY23 over Q1 FY22.

Mahindra CIE Automotive gained 3.48%. The company`s consolidated net profit rose 38.7% to Rs 188.85 crore on 32.5% increase in net sales to Rs 2,707.20 crore in Q2 calender year (CY) 2022 over Q2 CY 2021.

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