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Sensex drops 638 pts, Nifty below 16,900 on negative global cues; VIX zooms 7%

Published on Oct 03, 2022 17:10

The headline equity indices tumbled over 1% each on Monday, mirroring negative global markets. After opening above 17100 mark, the Nifty 50 index corrected as the session progressed and ended below 16,900. Metals, auto and FMCG shares were under pressure. However, pharma and healthcare shares bucked the selloff.

The barometer index, the S&P BSE Sensex, dropped 638.11 points or 1.11% to 56,788.81. The Nifty 50 index slumped 207 points or 1.21% to 16,887.35.

Hindustan Unilever (down 2.77%), ITC (down 2.32%), ICICI Bank (down 1.71%) and Infosys (down 1.35%) were major drags.

In the broader market, the S&P BSE Mid-Cap index fell 1.24% while the S&P BSE Small-Cap index lost 0.54%.

The market breadth was weak. On the BSE, 1,431 shares rose and 2,120 shares fell. A total of 153 shares were unchanged.

The NSE`s India VIX, a gauge of the market`s expectation of volatility over the near term, jumped 6.99% to 21.37. Global stock markets are under pressure lately as tightening monetary policy stoke fears of recession among investors.

Economy:

The seasonally adjusted S&P Global India Manufacturing Purchasing Managers` Index (PMI) stood at 55.1 in September 2022, expanding for the fifteenth month in a row. The headline figure, however, slipped from 56.2 in August, though pointed to a solid rate of growth.

Meanwhile, India collected Rs 1.48 lakh crore as Goods and Services Tax (GST) in September, registering an increase of 26% from the same month last year, the finance ministry said on October 1. The September GST mop-up was 2.8% higher from August.

India`s eight core infrastructure sectors` output grew 3.3% in August 2022, lowest in past nine months, as against 12.2% in the year-ago period, according to official data released on Friday. The previous low was in November 2021 at 3.2%.

Numbers to Track:

The yield on India`s 10-year benchmark federal paper declined to 7.47 as compared with 7.398 at close in the previous trading session.

In the foreign exchange market, the rupee fell against the dollar. The partially convertible rupee was hovering at 81.85, compared with its close of 81.40 during the previous trading session.

MCX Gold futures for 5 October 2022 settlement rose 0.07% to Rs 50,130.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was down 0.26% to 112.41.

The United States 10-year bond yield declined to 3.783 as compared with 3.804 at close in the previous trading session.

In the commodities market, Brent crude for November 2022 settlement gained $3.51 or 4.12% at $88.65 a barrel.

Global Markets:

The Dow Jones index futures were up 127 points, indicating a positive opening in the US stocks.

Shares in Europe and Asia declined on Monday amid fears that central banks across the world will keep hiking rates until inflation is under control. Stock markets in China and South Korea were closed.

Sentiment of Japan`s large manufacturers worsened in the July-to-September quarter, according to the Bank of Japan`s latest quarterly tankan business sentiment survey. The headline index for large manufacturers` sentiment came in at 8, a decline from the previous quarter`s reading of 9.

US stocks dropped on Friday on concerns of hot inflation, rising interest rates and recession fears.

Buzzing Segment:

The Nifty Pharma index rose 1.13% to 13,118.95. The index has risen 5.16% in five trading sessions.

Lupin (up 6.05%), Aurobindo Pharma (up 4.84%), Sanofi India (up 3.74%), Glenmark Pharmaceuticals (up 3.05%), IPCA Laboratories (up 2.08%), Dr. Reddy`s Laboratories (up 1.92%), Gland Pharma (up 1.63%), Cipla (up 1.35%), Torrent Pharmaceuticals (up 1.31%), Granules India (up 1.11%), Natco Pharma (up 1.11%), Pfizer (up 0.7%), Divi`s Laboratories (up 0.43%) and Biocon (up 0.38%) surged.

Zydus Lifesciences gained 5.84% after the company said its US subsidiary received final approval from the United States Food and Drug Administration (USFDA) to market Mirabegron extended-release tablets. Mirabegron is indicated for the treatment of overactive bladder (OAB) with symptoms of urge urinary incontinence, urgency and urinary frequency. The drug will be manufactured at the group`s formulation manufacturing facility at Ahmedabad SEZ, India.

Stocks in Spotlight:

Shares of two oil explorers climbed after the Central Government on Sunday (2 October 2022) slashed the windfall tax on petrol, diesel, jet fuel and crude oil following a decline in international rates.

Oil and Natural Gas Corporation (ONGC) (up 4.34%) and Oil India (up 3.32%) climbed.

Effective Sunday, the government cut the windfall tax on domestically-produced crude oil by about 24% to Rs 8,000 per tonne from Rs 10,500, according to a government notification. The government also halved the levy on export of diesel to Rs 5 per litre. It also scraped a levy of Rs 5 per litre on export of jet fuel, at the sixth fortnightly review of the one-off taxes on oil companies.

FSN E-Commerce Ventures (Nykaa) rose 2.44% after the company said its board on Monday (3 October) approved issuing 5 bonus equity shares for each share held (5:1).

63 Moons Technologies rose 1.21% and Multi Commodity Exchange of India (MCX) jumped 2.36%.

MCX on 30 September 2022 issued a purchase order to 63 Moons for extending support and managed services for its existing trading & clearing platform for a period of three months, beginning from 1 October 2022 to 31 December 2022. The contract ended on 30 September 2022.

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