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Sensex plummets over 900 pts, Nifty below 16,250 mark

Published on Jun 10, 2022 13:28

The domestic equity benchmarks further extended losses and traded near the day`s low in afternoon trade. The Nifty traded below the 16,250 mark. All the sectoral indices on the NSE were in the red. Financial services, IT and oil & gas shares witnessed major selling pressure. Investors remained cautious ahead of the US inflation data expected later today.

At 13:23 IST, the barometer index, the S&P BSE Sensex, was down 946.62 points or 1.71% to 54,373.66. The Nifty 50 index fell 263.80 points or 1.60% to 16,214.30.

In the broader market, the S&P BSE Mid-Cap index lost 0.67% while the S&P BSE Small-Cap index was down by 0.67%.

Sellers outnumbered buyers. On the BSE, 1,173 shares rose and 2,010 shares fell. A total of 142 shares were unchanged.

Economy:

Fitch Ratings has revised the Outlook on India`s long-term foreign-currency issuer default rating (IDR) to `stable`, from `negative`, and has affirmed the IDR at `BBB-`.

The outlook revision reflects Fitch Ratings` view that downside risks to medium-term growth have diminished due to India`s rapid economic recovery and easing financial sector weaknesses, despite near-term headwinds from the global commodity price shock. It expects robust growth relative to peers to support credit metrics in line with the current rating.

High nominal GDP growth has facilitated a near-term reduction in the debt-to-GDP ratio, but public finances remain a credit weakness with the debt ratio broadly stabilising, based on our expectation of persistent large deficits. The rating also balances India`s external resilience from solid foreign-exchange reserve buffers against some lagging structural indicators.

The credit rating agency said that India`s economy continues to see a solid recovery from the COVID-19 pandemic shock. GDP recovered by 8.7% in the fiscal year ended March 2022 (FY22), and Fitch Ratings forecasts GDP growth to remain robust at 7.8% in FY23 compared with the 3.4% `BBB` median.

However, this is a downward revision from its 8.5% forecast in March as the inflationary impacts of the global commodity price shock are dampening some of the positive growth momentum.

Gainers & Losers:

Asian Paints (up 1.16%), Tata Consumer Products (up 0.97%), Grasim Industries (up 0.65%), Apollo Hospitals Enterprise (up 0.51%) and Shree Cements (up 0.43%) were major Nifty gainers.

Bajaj Finance (down 3.52%), Kotak Mahindra Bank (down 3.49%), Hindalco Industries (down 3.48%), Housing Development Finance Corporation (HDFC) (down 3.31%) and Wipro (down 3.17%) were majority Nifty losers.

Stocks in Spotlight:

Bajaj Auto shed 0.44%. The meeting of board of directors of the company is scheduled to be held on 14 June 2022, to consider a proposal for buyback of fully paid-up equity shares of the company.

Dr. Reddy`s Laboratories rose 0.27%. Olema Pharmaceuticals, Inc. and Aurigene Discovery Technologies Limited announced an exclusive global license agreement to research, develop and commercialize novel small molecule inhibitors of an undisclosed oncology target. Aurigene Discovery Technologies is a clinical stage biotech company and a wholly owned subsidiary of Dr. Reddy`s Laboratories.

IIFL Finance jumped 8.22% after a wholly owned arm of Abu Dhabi Investment Authority (ADIA) invested Rs 2,200 crore for a 20% stake in IIFL Home Finance. IIFL Home Finance, a wholly owned subsidiary of IIFL Finance, is engaged in the business of providing home loans, loans against property and construction finance. The company has assets under management of Rs 23,617 crore as of 31 March 2022. It is headquartered in Gurugram with presence across 16 states and 2 union territories with over 200 branches.

Welspun Enterprises rallied 8.39% after the company announced that it has executed definitive agreements to exit its portfolio of operating road concessions (Highway Portfolio) to Actis Highway Infra (Actis). The company sold the portfolio for an aggregate enterprise value (EV) of approximately Rs 6,000 crore. The entire transaction is expected to be completed by 31 March 2023, subject to completion of customary and regulatory compliances and approvals from NHAI, PWD, and lenders.

Global Markets:

European markets fell across the board while most Asian stocks declined on Friday as investors looked ahead to the release of U.S. inflation data expected later stateside.

The European Central Bank (ECB) on Thursday confirmed its intention to hike interest rates by 25 basis points at its July meeting, with a further hike expected in September, the scale of which will be determined by the medium-term inflation outlook.The ECB also raised its inflation expectations for the euro zone significantly and downgraded its growth forecasts.

The ECB raised its inflation projections but cut its growth outlook as the conflict in Ukraine continues to weigh on confidence, consumption and investment. The ECB now sees inflation over its 2% target throughout its projection horizon, accepting that rapid price growth is not nearly as temporary as it had forecast for the past year.

US stocks fell sharply on Thursday ahead of a key inflation report as investors worried about the state of the U.S. economy. Investors are looking to see if inflation has peaked or if the Federal Reserve will need to be even more aggressive to tamp down price increases.

The Chinese producer price index for May jumped 6.4% as compared with a year earlier, according to figures by the country`s Bureau of Statistics. The consumer price index for May climbed 2.1% from a year ago.

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