SENSEX DROPS 582 PTS, NIFTY ENDS BELOW 24,150 AFTER RBI MAINTAINS POLICY RATES

Domestic stocks plunged on Thursday as the Reserve Bank of India (RBI) maintained its status quo on interest rates for the ninth consecutive time due to persistent food inflation. The benchmark Nifty50 index closed below the 24,150 level, despite touching a high of 24,340.50 during the afternoon session. Trading was volatile due to the expiry of weekly index options on the National Stock Exchange. The IT, metals, and energy sectors were particularly hard hit.

The barometer index, the S&P BSE Sensex, was down 581.79 points or 0.73% to 78,886.22. The Nifty 50 index slipped 180.50 points or 0.74% to 24,117.

Infosys (down 2.84%), Larsen & Toubro (down 2.53%) and Reliance Industries (down 1.15%) were major drags.

In the broader market, the S&P BSE Mid-Cap index fell 0.44% and the S&P BSE Small-Cap index shed 0.16%.

The market breadth was negative. On the BSE, 1,759 shares rose and 2,159 shares fell. A total of 96 shares were unchanged.

The NSE`s India VIX, a gauge of the market`s expectation of volatility over the near term, gained 2.67% to 16.60.

RBI Policy:

The Reserve bank of India`s Monetary Policy Committee (MPC) announced today (August 8, 2024) that it has decided to keep the policy repo rate under the liquidity adjustment facility (LAF) unchanged at 6.50%.

Consequently, the standing deposit facility (SDF) rate remains unchanged at 6.25% and the marginal standing facility (MSF) rate and the Bank Rate at 6.75%.

The MPC also decided to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth.

These decisions are in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%, while supporting growth.

The projected real GDP growth for 2024-25 is maintained at 7.2%. The quarterly breakdown is as follows: Q1 at 7.1%; Q2 at 7.2%; Q3 at 7.3%; and Q4 at 7.2%. Real GDP growth for Q1:2025-26 is projected at 7.2%.

The projected CPI inflation for 2024-25 remains unchanged at 4.5%. The quarterly breakdown is as follows: Q2 at 4.4%; Q3 at 4.7%; and Q4 at 4.3%. CPI inflation for Q1:2025-26 is projected at 4.4%.

During the recent policy meeting, Dr. Shashanka Bhide, Dr. Rajiv Ranjan, Dr. Michael Debabrata Patra and Shaktikanta Das voted to keep the policy repo rate unchanged at 6.50%. Dr. Ashima Goyal and Prof. Jayanth R. Varma voted to reduce the policy repo rate by 25 basis points.

The minutes of the MPC�s meeting will be published on August 22, 2024. The next meeting of the MPC is scheduled during October 7 to 9, 2024.

Numbers to Track:

The yield on India`s 10-year benchmark federal paper jumped 1.88% to 6.991 as compared with previous close 6.983.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 83.9675, compared with its close of 83.9500 during the previous trading session.

MCX Gold futures for 4 October 2024 settlement rose 0.16% to Rs 69,075.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was down 0.09% to 103.10.

The United States 10-year bond yield fell 1.09% to 3.923.

In the commodities market, Brent crude for October 2024 settlement lost 31cents or 0.40% to $78.02 a barrel.

Global Markets:

European stocks tumbled while Asian stocks ended mixed on Thursday. The continued volatility in global markets reflects investor concerns over the global economy.

Market participants are also closely monitoring corporate earnings reports being released worldwide.

US stocks closed lower on Wednesday, with the Nasdaq leading the decline amid a slump in technology shares. A weak demand for a 10-year Treasury auction further rattled investor sentiment. The Dow Jones Industrial Average fell 0.60%, the S&P 500 lost 0.77%, and the Nasdaq Composite dropped 1.05%.

Stocks in Spotlight:

BSE surged 8% after the stock exchange delivered a record quarter in terms of revenues, achieving total revenues of Rs 674 crore, registering a YoY growth of 149% for Q1 FY25. However, consolidated net profit attributable to the shareholders for the quarter ended 30 June 2024, stood at Rs 265 crore, down 40% YoY.

MRF added 4.18%. The tyre major�s consolidated net profit fell 3.01% to Rs 571.02 crore in Q1 FY25 as compared with Rs 588.75 crore posted in Q1 FY24. Revenue from operations grew by 11.74% to Rs 7,196.45 crore in Q1 FY25 from Rs 6,440.29 crore recorded in Q1 FY24.

Godrej Consumer Products (GCPL) slipped 2.47%. The company reported 41.36% increase in consolidated net profit to Rs 450.69 crore in Q1 FY25 as compared with Rs 318.82 crore in Q1 FY24. Revenue from operations fell 3.4% YoY to Rs 3,331.58 crore during the quarter.

Lemon Tree Hotels dropped 9.47% after the company reported a 15.55% fall in consolidated net profit to Rs 19.81 crore in Q1 FY25 as compared to Rs 23.46 crore posted in Q1 FY24. However, revenue from operations jumped 19.52% year on year (YoY) to Rs 268.02 crore in Q1 FY25.

KPI Green Energy hit an upper circuit of 5% after the company�s consolidated net profit surged 98.76% to Rs 66.11 crore in Q1 FY25 as compared to Rs 33.26 crore recorded in Q1 FY24. Revenue from operations climbed 83.78% year on year (YoY) to Rs 348.01 crore in Q1 FY25.

Balaji Amines dropped 7.19% after the company�s consolidated net profit declined 17.90% to Rs 43.29 crore in Q1 FY25 as against Rs 52.73 crore posted in Q1 FY24. Revenue from operations was at Rs 384.75 crore in Q1 FY25, down 17.02% from Rs 463.67 crore recorded in the corresponding quarter previous year.

PCBL rallied 4.37% after the company�s consolidated net profit increased 8.11% to Rs 118.02 crore during the quarter as compared with Rs 109.17 crore in Q1 FY24. Revenue from operations jumped 59.07% YoY to Rs 2,143.56 crore during the quarter.

Apollo Tyres declined 1.68% after the company�s consolidated net profit slipped 23.91% to Rs 302 crore in Q1 FY25 as against Rs 396.91 crore recorded in Q1 FY24. Revenue from operations grew by 1.45% to Rs 6,334.85 crore in Q1 FY25 as compared to Rs 6,244.58 crore posted in the same period a year ago.

Sula Vineyards shed 0.94%. The company reported 6.94% increase in consolidated net profit to 14.63 crore in Q1 FY25 as compared to Rs 13.68 crore posted in Q1 FY24. Revenue from operations (excluding excise duty) grew 11.47% year on year (YoY) to Rs 120.93 crore in Q1 FY25.

Nava rose 3.16%. On a consolidated basis, Nava`s net profit surged 30.1% to Rs 445.9 crore on 16.7% increase in total revenue to Rs 1,258.40 crore in Q1 June 2024 over Q1 June 2023. Profit before tax surged 27.6% year-on-year to Rs 530.80 crore in Q1 June 2024. The increase in PAT was aided by strong operational performance of Energy division in India & Zambia and supported by increased realisations in FAP & Mining divisions.

Krishna Institute of Medical Sciences (KIMS) rallied 2.17% after the company reported 7.18% increase in consolidated net profit to Rs 86.6 crore in Q1 FY25 from Rs 80.8 crore posted in Q1 FY24. Revenue from operations rose by 13.6% year on year (YoY) to Rs 688.4 crore during the quarter ended June 2024.

IPO Update:

The initial public offer (IPO) of Brainbees Solutions received 60,64,27,424 bids for shares as against 4,96,39,004 shares on offer, according to stock exchange data at 17:00 IST on Thursday (08 August 2024). The issue was subscribed 12.22 times.

The issue opened for bidding on Tuesday (06 August 2024) and it will close on Thursday (08 August 2024). The price band of the IPO is fixed between Rs 440 to Rs 465 per share. An investor can bid for a minimum of 32 equity shares and in multiples thereof.

Unicommerce eSolutions` IPO received 2,37,11,72,994 bids for shares as against 1,40,84,681 shares on offer, according to stock exchange data at 17:00 IST on Thursday (08 August 2024). The issue was subscribed 168.35 times.

The issue opened for bidding on Tuesday (06 August 2024) and it will close on Thursday (08 August 2024). The price band of the IPO is fixed between Rs 102 to Rs 108 per share. An investor can bid for a minimum of 138 equity shares and in multiples thereof.

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