Sensex slides 185 pts, Nifty ends below 16,550; Nestle drops 3%
Published on Jun 01, 2022 17:01
The key equity barometers ended with small losses on Wednesday, declining for the second trading session. A sharp rise in crude oil prices spooked investors. The jump in oil prices threatens to upend India`s fiscal math and economic projections.
After hitting a high of 16,649.20 in early trade, the Nifty slipped as the session progressed and settled below 16,550 mark. Banks shares advanced while IT and healthcare shares declined.
The barometer index, the S&P BSE Sensex, was down 185.24 points or 0.33% to 55,381.17. The Nifty 50 index fell 61.80 points or 0.37% to 16,522.75.
Nestle India (down 2.99%), Sun Pharmaceutical Industries (down 2.40%), HCL Technologies (down 2.10%), Hindustan Unilever (down 1.74%) and Infosys (down 1.67%) were major drags.
In the broader market, the S&P BSE Mid-Cap index fell 0.10% while the S&P BSE Small-Cap index added 0.62%.
The market breadth was positive. On the BSE 1,844 shares rose while 1,487 shares fell. A total of 131 shares were unchanged.
The NSE`s India VIX, a gauge of market`s expectation of volatility over the near term, rose 1.79% to 20.85.
Goods and Services Tax (GST) collections slipped to Rs 1.41 lakh crore in May, down 16% from April`s all-time high of Rs 1.68 lakh crore, data released on June 1 by the finance ministry showed. On a year-on-year basis, GST collections in May were up 44%. The collection in the month of May, which pertains to the returns for April, the first month of the financial year, has always been lesser than that in April, which pertains to the returns for March, the closing of the financial year. However, it is encouraging to see that even in the month of May 2022, the gross GST revenues have crossed the Rs 1.40 lakh crore mark.
The seasonally adjusted S&P Global India Manufacturing Purchasing Managers` Index (PMI) stood at 54.6 in May, little-changed from 54.7 in April, pointing to a sustained recovery across the sector. The above-50.0 reading was the eleventh in as many months and consistent with a solid improvement in operating conditions.
India`s GDP growth in Q4 FY22 was at 4.1% year-on-year, compared to a revised growth of 5.4% for Q3 FY22. Gross Value Added (GVA), which excludes the impact of subsidies and indirect taxes, grew 3.9% year-on-year in the fourth quarter.
For the full fiscal year, GDP grew 8.7% year-on-year, compared to a contraction of 6.6% in FY21. GVA for FY22 grew 8.1% year-on-year, compared to a contraction of 4.8% in FY21.
The combined Index of Eight Core Industries stood at 143.2 in April 2022, an increase of 8.4% (provisional) compared with the Index of April 2021.
Final growth rate of Index of Eight Core Industries for January 2022 is revised to 4.0% from its provisional level 3.7%.
Numbers to Watch:
The yield on India`s 10-year benchmark federal paper rose to 7.416% as compared with 7.415% 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 77.51, compared with its close of 77.71 during the previous trading session.
MCX Gold futures for 3 June 2022 settlement fell 0.77% to Rs 50,462.
The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, increased 0.20% to 101.95.
In the commodities market, Brent crude for August 2022 settlement rose $1.61 or 1.39% at $117.21 a barrel. The contract rose $3.41 or 2.86% to settle at $ 122.84 a barrel during the previous trading session.
The gains came after European Union leaders agreed to a partial and phased ban on Russian oil and China ended its COVID-19 lockdown in Shanghai.
The Dow Jones futures were up 64 points, indicating a positive opening in the US stock market today.
Shares in Europe and Asia were mixed on Wednesday as investors continue to assess new data on inflation and economic activity.
Euro zone inflation hit an annual 8.1% in May, marking a seventh consecutive record high.
China`s Caixin/Markit manufacturing Purchasing Managers` Index for May came in at 48.1 on Wednesday, an improvement over April`s reading of 46 but still remaining below the 50-level mark that separates expansion from contraction.
Meanwhile, Bank of Japan Deputy Gov. Masazumi Wakatabe said Wednesday that both monetary easing and fiscal expansion would be needed to tackle higher commodity prices and Japan`s low inflation at the same time.
The deputy governor also said medium- to long-term inflation is still expected to rise only moderately in Japan, where he believes there are "scarring effects of prolonged deflation."
Shares of eMudhra were trading at Rs 258.85 on the BSE, a premium of 1.11% compared with the issue price of Rs 256.
The scrip was listed at Rs 271, representing a premium of 5.86% as compared to the issue price.
The scrip hit a high of Rs 279 and a low of Rs 255.40 during the day. Over 5.54 lakh shares of the company changed hands in the counter.
The IPO of eMudhra was subscribed 2.72 times. It opened for bidding on 20 May 2022 and it closed on 24 May 2022. The price band of the IPO was fixed at Rs 243-256 per share. eMudhra is a Certifying Authority (CA) authorised by the Controller of Certifying Authority (CCA) for issuance of Digital Signature Certificates in India.
May Auto Sales Impact:
The Nifty Auto index fell 0.20% to 11,563. The index added 5.22% in the past four days.
Escorts fell 1.89% after the company`s total tractor sales jumped 31.1% YoY to 8,421 units in May 2022 from 6,423 units sold in May 2021.
Bajaj Auto slipped 3.69% after the company`s total sales rose 1% to 2,75,868 units in May 2022 as against 2,71,862 units sold in May 2021.
Ashok Leyland rose 1.78%. The company`s total commercial vehicle (CV) sales soared 315% to 13,273 units in May 2022 from 3,199 units sold in May 2021.
Tata Motors rose 0.19% after the company`s sales in the domestic & international market for May 2022 stood at 76,210 units, up 186% as against 26,661 units sold during May 2021.
Eicher Motors fell 0.41% after the company`s unlisted subsidiary, VE Commercial Vehicles (VECV) sold 5,637 units of commercial vehicles in May 2022, up 360.9% YoY.
Maruti Suzuki India shed 0.41% after the comapny sold a total of 161,413 units in May 2022, higher than 46,555 units sold in May 2021.
Mahindra & Mahindra (M&M) rose 1.32% after the company`s passenger vehicles sales zoomed 236% to 26,904 units in May 2022 over May 2021. The company`s total tractor sales surged 48% YoY to 35,722 units in May 2022.
TVS Motor Company gained 0.18% after the company recorded total sales of 302,982 units in May 2022 compared with 166,889 units sold in May 2021.
Stocks in Spotlight:
Coal India added 1.68% after the state-run coal major`s offtake stood at 61.2 million tonnes (MT) in May 2022, growing 11.3% compared with 55 MT recorded in the same month last year. The company`s coal production jumped 30% to 54.7 million tonnes (MT) in May 2022 from 42.1 MT in May 2021.
Steel Strips Wheels (SSWL) advanced 3.52% after the company`s net turnover jumped 96.31% to Rs 325.26 crore in May 2022 from Rs 165.68 crore in May 2021. The company achieved gross turnover of Rs 401.07 crore in May 2022 as against Rs 190.69 crore in May 2021, a growth of 110.32% year on year (YoY).
Separately, SSWL announced that the promoter group released some of the pledged shares on 31 May 2022. The total number of shares pledged has reduced to 36,29,044, or 11.62% of total paid up capital of the company and 18.52% of total promoter shareholding.
NMDC rose 0.4% after the PSU miner`s iron ore production marginally rose 14.69% to 3.20 MT in May 2022 as against 2.79 MT in May 2021. Iron ore sales aggregated in the month of May 2022 stood at 2.65 MT, falling 19.7% from 3.30 MT sold in May 2021.
VST Tillers Tractors declined 1.47% after the company`s total sales jumped 36.33% to 3,628 units in May 2022 from 2,661 units sold in May 2021.
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