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Sensex slumps 861 pts, Nifty ends below 17,350; IT shares drag

Published on Aug 29, 2022 17:17

The headline equity barometers ended with major cuts on Monday amid weak global cues. The Nifty closed below the 17,350 mark. IT, media and private banks shares tumbled. On the other hand, FMCG and oil & gas stocks were in demand.

Investor sentiment took a hit after Fed Chair in his address last week flagged the likely need for restrictive monetary policy to curb high inflation. The selling was accentuated by the dollar index hitting a new multi-year high and the US 10 year seeing a sharp spike this month over the preceding month. Traders worry that this could trigger a reversal of the solid FPI inflows seen this month.

The barometer index, the S&P BSE Sensex, was down 861.25 points or 1.46% to 57,972.62. The Nifty 50 index lost 246 points or 1.40% to 17,312.90.

Tech Mahindra (down 4.60%), Infosys (down 3.93%), Wipro (down 3.06%), HCL Technologies (down 2.98%) and TCS (down 2.73%) were major drags.

The NSE`s India VIX, a gauge of the market`s expectation of volatility over the near term, jumped 8.82% to 19.82.

In the broader market, the S&P BSE Mid-Cap index declined 0.80% while the S&P BSE Small-Cap index fell 0.57%.

The market breadth was negative. On the BSE, 1,403 shares rose and 2,106 shares fell. A total of 194 shares were unchanged.

Numbers to Track:

The yield on India`s 10-year benchmark federal paper rose to 7.253 as compared with 7.217 at the close of the previous trading session.

In the foreign exchange market, the rupee was lower against the dollar. The partially convertible rupee was hovering at 79.9400, compared with its close of 79.8400 during the previous trading session.

MCX Gold futures for 5 October 2022 settlement shed 0.57% to Rs 50,947.

The 10-year U.S. Treasury yield was hovering above 3.106% mark.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, added 0.19% to 109.01.

In the commodities market, Brent crude for October 2022 settlement rose 38 cents or 0.38% at $99.39 a barrel.

Global Markets:

The Dow Jones index futures were down 275 points, indicating a negative opening in the US stocks today.

Shares in Europe and Asia slumped on Monday as the mounting risk of more aggressive rate hikes in the United States.

Powell`s comments were echoed by European Central Bank board member Isabel Schnabel over the weekend. Schnabel reaffirmed the view that central banks must act aggressively to tackle rising inflation, even if that means dragging their economies into a recession.

Profits at China`s industrial firms sank in July. Profits at China`s industrial firms fell 1.1% in January-July from a year earlier, wiping out the 1% growth logged during the first six months, the National Bureau of Statistics said on Saturday.

US stocks dropped sharply on Friday after Federal Reserve Chair Jerome Powell said in his Jackson Hole speech the central bank won`t back off in its fight against rapid inflation.

Fed Chairman Jerome Powell warned that rising interest rates will cause �some pain� to the U.S. economy, saying higher interest rates likely will persist �for some time.� He said the Fed`s decision in September �will depend on the totality of the incoming data and the evolving outlook.

Stocks in Spotlight:

Reliance Industries (RIL) declined 0.84%. The company`s chairman and managing director Mukesh Ambani addressed the 45th annual general meeting (AGM) today, 29 August 2022.

"To build our pan-India True 5G network, we have committed a total investment of 2 lakh crore. Jio has prepared an ambitious 5G roll-out plan which will be the fastest in the world.

Within the next two months, by Diwali, we will launch Jio 5G across multiple key cities, including the metropolises of Delhi, Mumbai, Kolkata, and Chennai. Subsequently, we plan to increase the Jio 5G footprint month after month. By December 2023, which is less than 18 months from today, we will deliver Jio 5G to every town, every taluka, and every tehsil of our country," he said.

"Our media business achieved its highest growth last year on the back of strong engagement, resulting in record subscriptions and advertising revenues," Mukesh Ambani said.

"Our national channels, CNN-News18, CNBC-TV18, and News18 India are consistently ranked Number 1," he added.

RIL`s retail arm`s director Isha Ambani announced that the company will launch a fast-moving consumer business (FMCG) business.

"I am excited to announce that this year, we will launch our fast-moving consumer goods business. The objective of this business is to develop and deliver high quality, affordable products which solve every Indian`s daily needs.

UltraTech Cement ended flat at Rs 6514. The Aditya Birla group company said that it has completed expansion of 1.3 mtpa capacity at Dalla Cement Works in Uttar Pradesh. This is part of the first phase of capacity expansion announced in December 2020, said the company in a statement on Friday, 26 August 2022.

Tata Steel slipped 2.37%. The steel major has signed a Memorandum of Understanding (MoU) with the Government of Punjab for setting up a 0.75 million tonne per annum (MnTPA) long products steel plant with a scrap-based electric arc furnace (EAF). The company said that this initiative to set up the greenfield facility at Kadiana Khurd, Hitech Valley, Ludhiana in Punjab is a part of Tata Steel`s commitment to investing in a circular economy and transitioning to low-carbon steelmaking through the steel recycling route. It is a step aligned to the Company`s goal of achieving Net Zero carbon emission by 2045, it added.

L&T Technology Services (LTTS) shed 2.64%. The company on Monday said that it has won a 5-year, multi-million-dollar deal from BMW Group to provide high end engineering services for the company`s suite of infotainment consoles targeted for its family of hybrid vehicles. The BMW Group, is the world`s leading manufacturer of premium automobiles and motorcycles, and provider of premium financial and mobility services.

Andhra Paper rallied 4.48% after the company`s board approved a capital expenditure (capex) plan of Rs 400 crore. Out of the total capex of Rs 400 crore, an estimated amount of Rs 113 crore shall be towards equipment reliability & sustainability of the current levels of production.

Sansera Engineering advanced 7.57% after the company said it won over Rs 50.8 crore repeat order from a marquee North American manufacturer of EV passenger cars. Sansera has received order confirmation for three components from a marquee North American manufacturer of EV passenger cars.

Alembic Pharmaceuticals rose 0.22% after the pharma giant announced that it has received final approval from the US Food & Drug Administration (USFDA) for its Abbreviated New Drug Application (ANDA) for Chlorthalidone Tablets USP. Meanwhile, the pharmaceutical company also announced that it has completed the USFDA Remote Regulatory Assessment (RRA) for its bioequivalence facility, bio-analytical division, located at Vadodara, without any observations. The RRA was conducted from 22 August 2022 to 26 August 2022.

Glenmark Pharmaceuticals rose 0.82% after the US FDA classified the company`s Goa (India) facility inspection as �Official Action Indicated� (OAI). The United States Food and Drug Administration (US FDA) had inspected Glenmark`s Goa (India) facility from May 12 to May 20, 2022. Post the inspection, the American drug regulator issued Form-483 with five observations.

Praj Industries jumped 4.23% after a domestic broker initiated its coverage on the stock with a `buy` rating and a target price of Rs 507 per share. The broker added that it anticipates Praj Industries` revenue/PAT CAGR at 17.4%/29.3% over FY2022-25E led by robust order book, healthy tender pipeline, strong market leadership, pickup in execution, better operational efficiencies and well managed working capital cycle.

Sunteck Realty rose 2.50% after a foreign broker initiated its coverage on the stock with a `buy` rating and a target price of Rs 621 per share.

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