Sensex tanks 826 pts, Nifty ends below 19,300 on weak global signals

The domestic equity market experienced a sharp decline on Monday, extending its losing streak for the fourth consecutive session. Numerous factors including negative global market trends, a surge in US bond yields, concerns regarding US interest rate hikes, and the Israel-Hamas conflict all contributed to increased uncertainty, ultimately dampening investor sentiment.

The domestic benchmark indices opened lower and struggled to regain momentum throughout the trading session. Selling pressure intensified in the final hour, dragging the indices below key support levels. Sectors across the board felt the sting of the sell-off, with mid- and small-cap stocks bearing the brunt of the selling pressure. Media, PSU banks and metal shares tanked.

The barometer index, the S&P BSE Sensex, was down 825.74 points or 1.26% to 64,571.88. The Nifty 50 index lost 260.90 points or 1.34% to 19,281.75.

Adani Enterprises (down 3.51%), Reliance Industries (down 1.59%) and HDFC Bank (down 1.13%) were major drags.

The broader market underperformed the key indices. The S&P BSE Mid-Cap index fell 2.51% while the S&P BSE Small-Cap index slipped 4.18%.

The market breadth was weak. On the BSE, 645 shares rose, and 3187 shares fell. A total of 158 shares were unchanged.

The NSE`s India VIX, a gauge of the market`s expectation of volatility over the near term, rose 0.80% to 10.91.

The domestic stock market will remain shut on Tuesday, 24 October 2023, on account of Dussehra.

Economy:

India`s forex reserves increased by $1.15 billion to $585.89 billion for the week ended October 13, said RBI on Friday. The jump in forex reserves came after multiple weeks of decline in India`s forex reserve.

During the week, country`s gold reserves increased by $1.268 billion to $43.575 billion, the RBI said. The Special Drawing Rights (SDRs) increased by $72 million to $17.995 billion, the apex bank said.

Numbers to Watch:

The yield on India`s 10-year benchmark federal paper rose 0.29% to 7.86 from its previous close of 7.365.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 83.1850, compared with its close of 83.1200 during the previous trading session.

MCX Gold futures for 5 December 2023 settlement fell 0.16% to Rs 60,641.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was down 0.01% to 106.17.

The United States 10-year bond yield advanced 1.60% to 5.002.

In the commodities market, Brent crude for December 2023 settlement declined 48 cents or 0.52% to $91.68 a barrel.

Global Markets:

The Dow Jones index futures were down 175 points, indicating a weak opening in the US stock market today.

European stocks and Asian stocks both declined for the fourth consecutive day following the deepening selloff in US markets. Gold and crude oil prices also dropped, while the Japanese yen briefly weakened against the dollar, crossing the 150 mark. Traders attributed the decline in gold and crude oil prices to concerns over the geopolitical situation in the Middle East. Despite some positive developments, such as the release of two American hostages and aid being delivered to Gaza, there is still a risk of further conflict between Israel and Hamas, potentially involving other countries in the region.

On Friday, US markets experienced significant declines, with the 10-year US treasury yield reaching its highest level since 2007. The S&P 500, Dow, and Nasdaq all recorded losses. Investors will closely monitor upcoming earnings reports and economic data releases as these factors are expected to significantly impact market movement in the future.

Stocks in Spotlight:

BSE surged 6.75%. after the stock exchange announced an increase in transaction charges in the equity derivatives segment. The revised transaction charges structure for the S&P BSE SENSEX Options in the nearest/immediate expiry contracts will come into effect from 1 November 2023. The stock hit a record high of Rs 1,798 today.

CreditAccess Grameen rallied 7.19%. The company`s standalone net profit surged 99.38% to Rs 349.21 crore in Q2 FY24 as compared with Rs 175.15 crore in Q2 FY23. Total income jumped 53.21% to Rs 1,247.59 crore in Q2 FY24 as compared with Rs 814.31 crore in corresponding quarter last year. Net interest income rose 49.6% to Rs 772.0 crore in Q2 FY24 from Rs 516.2 crore in Q2 FY23.

IPCA Laboratories surged 6.10% after the company`s APIs manufacturing facility situated at Sejavata, Ratlam, Madhya Pradesh received Establishment Inspection Report from the USFDA.

ICICI Bank fell 0.29%. The private lender`s standalone net profit increased 35.77% to Rs 10,261 crore on 30.91% jump in total income to Rs 40,697.07 crore in Q2 FY24 over Q2 FY23. Net interest income (NII) increased 23.81% year on year (YoY) to Rs 18,308 crore in Q2 FY24 from Rs 14,787 crore posted in Q2 FY23. Net interest margin improved to 4.53% in Q2 FY24 as compared to 4.31% recorded in the corresponding quarter previous year.

Kotak Mahindra Bank declined 1.67%. The private sector lender`s net profit rose 23.63% to Rs 3,191 on 24.22% increase in net total income to Rs 8,611 crore in Q2 September 2023 over Q2 September 2022. Net Interest Income (NII) for Q2FY24 increased to Rs 6,297 crore, from Rs 5,099 crore in Q2FY23, up 23% YoY. Net Interest Margin (NIM) was 5.22% for Q2FY24, higher than 5.15% in Q2FY23.

Yes Bank slipped 6.02%. The private lender`s standalone net profit jumped 47.37% to Rs 225.21 crore on 24.76% increase in total income to Rs 7,920.68 crore in Q2 FY24 over Q2 FY23. Net interest income (NII) stood at Rs 1,925 crore for Q2FY24, registering de-growth of 3.3% year on year (YoY). Net interest margin (NIM) for Q2 FY24 was at 2.3% down nearly 30 bps as compared to 2.6% reported in Q2 FY23.

RBL Bank dropped 5.36%. The private lender reported grew 46% in standalone net profit to Rs 294 crore in Q2 FY24 from Rs 202 crore in Q2 FY23. Profit before tax in Q2 FY24 stood at Rs 90.63 crore, down 66.53% as against Rs 270.85 crore in Q2 FY23. The bank`s total income climbed 29.40% YoY to Rs 3712.39 crore during the quarter. Net interest income grew 26% to Rs 1,475 crore in the second quarter of FY24. NIM was 5.54% vs 5.02% for Q2 FY23.

During the quarter ended 30 September 2023, the bank received income tax orders relating to matter under appeal resulting in write-back of tax provision for earlier years of Rs 222.92 crore (pre-tax of Rs 297.89 crore). The bank has used this amount to build contingent buffers of 100bps created on credit card & microfinance advances to prudently build reserves and strengthen the balance sheet; amounting to Rs 252 crore.

One 97 Communications (Paytm) slumped 6.55%. Paytm has reported a consolidated net loss of Rs 291.7 crore in Q2 FY24 as against a net loss of Rs 571.5 crore posted in Q2 FY23. Revenue from operations jumped 31.59% to Rs 2,518.6 crore in the quarter ended 30 September 2023 from Rs 1,914crore recorded in the same period last year.

Mahindra Holidays & Resorts India tumbled 9.09% after the company reported 48% fall in consolidated net profit to Rs 21.34 crore in Q2 FY24 from Rs 40.86 crore in Q2 FY23. Revenue from operations rose by 10% to Rs 655.27 crore during the period under review as compared with corresponding period last fiscal.

Amber Enterprises India slumped 8.31% after the company reported net loss of Rs 6.94 crore in Q2 FY24 as compared with Rs 2.98 crore in Q2 FY23. Revenue from operations jumped 23.54% YoY to Rs 927.06 crore in Q2 FY23.

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