Sensex drops 338 pts, drops for 4th day; Nifty holds 17,000; IT shares drag

The key equity indices ended a volatile session with significant losses on Tuesday, sliding for the fourth straight session. The Nifty 50 index opened higher at 17,160.55, and hit the day`s high of 17,224.65 in early trade. However, selling pressure dragged the index lower. After a mild recovery in early afternoon trade, the index slipped once again and briefly fell below the 17,000 mark in late trade. PSU banks, IT and metal shares tumbled. However, media and pharma shares bucked the weak market trend.

The barometer index, the S&P BSE Sensex, was down 337.66 points or 0.58% to 57,900.19. The Nifty 50 index lost 111 points or 0.65% to 17,043.30. Both the indices have slipped 4% in four trading sessions.

TCS (down 2%), Kotak Mahindra Bank (down 1.60%), ITC (down 1.07%) and Infosys (down 0.96%) were major drags.

In the broader market, the S&P BSE Mid-Cap index fell 0.46% while the S&P BSE Small-Cap index slipped 0.84%.

The market breadth was weak. On the BSE, 1,129 shares rose and 2,410 shares fell. A total of 91 shares were unchanged.

The turmoil in the US banking space with the failure of Silicon Valley Bank (SVB) and the closure of New York-based Signature Bank dampened the investors sentiment. Meanwhile, traders will keep a close eye on the U.S. consumer price index for February, due to be released later in the day.

Economy:

India`s annual wholesale price index (WPI) based inflation eased to 25-month low of 3.85% in February 2023 as compared to 4.73% recorded in January 2023 and 13.43% in February 2022.

Decline in the rate of inflation in February 2023 is primarily contributed by fall in prices of crude petroleum & natural gas, non-food articles, food products, minerals, computer, electronic & optical products, chemicals & chemical products, electrical equipment and motor vehicles, trailers & semi-trailers.

Meanwhile, India`s retail inflation, measured by the consumer price index (CPI), eased marginally to 6.44% in February against 6.52% in January. It stood at 6.07% a year ago. Both food and core inflation remained sticky and elevated at over 6% last month and the price pressures were higher in rural areas than urban centres.

Separately, as per the latest estimates of National Income released by National Statistical Office, Ministry of Statistics and Programme Implementation (MoSPI), real GDP is projected to grow by 9.1% in 2021-22 (1st RE) and 7% in 2022-23 (2nd AE). This was stated by the Union Minister of State for Finance, Pankaj Chaudhary in a written reply to a question in Lok Sabha.

Numbers to track:

The yield on India`s 10-year benchmark federal paper rose to 7.38 from 7.365 in previous trading session.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 82.48, compared with its close of 82.2375 during the previous trading session.

MCX Gold futures for 5 April 2023 settlement shed 0.25% to Rs 57,500.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was up 0.22% to 103.82.

The United States 10-year bond yield advanced 2.79% to 3.613.

In the commodities market, Brent crude for May 2023 settlement slipped $1.71 or 2.12% to $79.06 a barrel.

Global Markets:

The Dow Jones futures were up 137 points, indicating a positive opening in the US stock market today.

Most European shares advanced while Asian stocks fell across the board on Tuesday as investors grappled with the fallout of failed banks in the U.S., including the Silicon Valley Bank.

US stocks ended lower on Monday even as a plan to backstop all the depositors in failed Silicon Valley Bank, along with other extraordinary measures, failed to boost bank shares. The fallout from SVB`s collapse prompted President Joe Biden to promise stronger regulation of U.S. lenders, while reassuring depositors that their money is safe.

Traders are looking to the US consumer price index report later in the day for cues that may trigger further shifts in bets on the Fed`s next move ahead of its meeting on March 21 and 22. As per reports, a hot inflation report will raise expectations the Fed could hike rates by 50 basis points, up from the 25 points it implemented in February.

Stocks in Spotlight:

Mahindra & Mahindra declined 2.92% and Mahindra CIE Automotive rose 3.23%. M&M sold 2,29,80,000 equity shares, representing 6.058% of the paid-up share capital of Mahindra CIE Automotive, a listed associate of the company at a gross price of Rs 357.39 per share. Following the sale, the shareholding of the company in MCIE has come down from 9.253% to 3.195% of its share capital.

Under the block deal, French multinational bank Societe Generale has bought about 64 lakh shares, according to the data available with the exchanges.

Sona BLW Precision Forgings jumped 6.22% after auto component maker announced that Blackstone`s 20.5% stake in the company has been acquired by long-term investors.

Surya Roshni rallied 3.47%. The company received orders amounting to Rs. 96.39 crore for supply of 3LPE coated Line pipes from HPCL for City Gas Distribution projects in three geographical areas in the state of Rajasthan, Bihar, Jharkhand and West Bengal.

Varun Beverages shed 0.23%. The carbonated soft drinks maker said that it has invested 9.80% of equity share capital (5.68% on fully diluted basis) of Lone Cypress Ventures, a special purpose vehicle (SPV), for a cash consideration of Rs 3.15 crore.

Lupin added 0.28%. The global pharmaceutical firm said that the United States Food and Drug Administration (U.S. FDA) had completed an inspection of its Pune-based Bioresearch Centre. The inspection closed without any observation.

NMDC rose 1.70% after the company announced that Amitava Mukherjee, director (finance) has been assigned the additional charge of chairman and managing director (CMD) for a period of 3 months upto 31 May 2023. Amitava Mukherjee will continue as CMD upto 31 May 2023 or till regular incumbent joins the post, or until further orders, whichever is the earliest, said NMDC.

Glenmark Pharmaceuticals fell 2.21%. The drug maker announced that it has received final approval by the United States Food & Drug Administration (USFDA) for Clindamycin Hydrochloride capsules. Clindamycin Hydrochloride capsules are used to treat bacterial infections of the lungs, skin, blood, female reproductive organs, and internal organs.

Tata Chemicals added 0.22%. Fitch Ratings revised the outlook on the company`s Long-Term Foreign-Currency Issuer Default Rating (IDR) to Positive from Stable and affirmed the rating at `BB+.

GAIL (India) skid 0.23%. The company has declared interim dividend for FY 2022-23 of 40% on the paid-up equity share capital, which is Rs 4 per equity share, with a record date of 21 March 2023.

Krsnaa Diagnostics declined 0.20% after the company announced that it has won a tender to provide services of lab investigation facilities under `Hinduhridaysamrat Balasaheb Thakeray Chikitsa` in Mumbai. The scope of order includes providing services of lab investigation facilities for BMC dispensaries and hospitals in Mumbai in the month of January 2023. The company said that it has operationalized 100 more pathology collection centers.

Bannari Amman Sugars fell 7.50% after workmen union at the company`s sugar unit-II in Mysore and sugar unit-III at Chamarajnagar in Karnataka have called for strike with effect from 10 March 2023.

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