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Sensex tanks 867 pts, Nifty holds 16,400; VIX above 21 mark

Published on May 06, 2022 17:12

The domestic equity barometers ended with steep cuts on Friday, tracking negative global cues. The Nifty managed to close a tad above the 16,400 mark after hitting the day`s low of 16,340.90 in mid-morning trade. Investors were concerned that the US Fed`s 0.50% rate hike would not be enough to control the multi-year high inflation. Selling was wide spread with realty, consumer durables and IT shares declining the most.

The barometer index, S&P BSE Sensex dropped 866.65 points or 1.56% to 54,835.58. The Nifty 50 index was down by 271.40 points or 1.63% to 16,411.25.

Reliance Industries (down 0.74%) and Tata Power (down 0.95%) will announce their quarterly earnings today.

The broader market tumbled. The S&P BSE Mid-Cap index fell 2.06% while the S&P BSE Small-Cap index lost 2.10%.

Sellers outnumbered buyers. On the BSE, 835 shares rose while 2519 shares fell. A total of 106 shares were unchanged.

The NSE`s fear index, VIX, rose 4.71% to 21.25.

LIC IPO:

The initial public offering (IPO) of insurance behemoth Life Insurance Corporation (LIC) of India received bids for 21.37 crore shares as against 16.20 crore shares on offer, according to stock exchange data at 17:00 IST on Friday (6 May 2022). The issue was subscribed 1.32 times.

The issue opened on 4 May 2022 and it will close on 9 May 2022. The IPO price band is Rs 902 to Rs 949 per equity share. An investor can bid for a minimum of 15 equity shares and in multiples thereof.

Numbers to Watch:

The yield on India`s 10-year benchmark federal paper rose to 7.451% as compared with 7.403% at close in the previous trading session.

In the foreign exchange market, the rupee was lower against the dollar. The partially convertible rupee was hovering at 76.9250, compared with its close of 76.35 during the previous trading session.

MCX Gold futures for 3 June 2022 settlement rose 0.69% to Rs 51,249.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, decreased 0.40% to 103.33.

In the commodities market, Brent crude for July 2022 settlement rose $2.58 or 2.33% at $113.48 a barrel. The contract rose 76 cents or 0.69% to settle at $110.9 a barrel during the previous trading session.

Foreign Markets:

The US Dow Jones index futures were down 178 points, indicating a weak opening in the US stocks today.

Shares in Europe and Asia declined on Friday following the sharp sell-off on Wall Street yesterday.

Monetary policy remains a key dictator of market sentiment. Global bond yields have surged in recent weeks as investors react to interest rate hikes from the Fed and the Bank of England. The European Central Bank has yet to follow suit, but momentum appears to be building for a summer hike.

US stocks dropped sharply on Thursday amid a broad sell-off, as investor sentiment cratered in the face of concerns that the Federal Reserve`s interest rate hike the previous day would not be enough to tame surging inflation.

The focus now shifts to the U.S. Labor Department`s closely watched monthly employment report on Friday for clues on labor market strength and its impact on monetary policy.

Stocks in Spotlight:

Mindtree fell 3.88% to Rs 3374.65 and shares of Larsen & Toubro Infotech (LTI) fell 3.64% to Rs 4593.10.

The boards of Mindtree and LTI at their respective meetings held today approved a composite scheme of amalgamation of both these independently listed IT services companies under the Larsen & Toubro Group.

Upon the scheme becoming effective, all shareholders of Mindtree will be issued shares of LTI at the ratio of 73 shares of LTI for every 100 shares of Mindtree. The new shares of LTI so issued will be traded on the NSE and BSE.

Larsen & Toubro will hold 68.73% of LTI after the merger. The transaction is subject to shareholder and regulatory approvals.

Fertilizers & Chemicals Travancore (FACT) jumped 7.18%. The company`s consolidated net profit rose 57.46% to Rs 233.44 crore on 106.12% jump in net sales to Rs 1692.55 crore in Q4 March 2022 over Q4 March 2021.

Voltas slumped 7.71%. The company`s consolidated net profit declined 23.15% to Rs 182.70 crore on 0.22% rise in net sales to Rs 2633.72 crore in Q4 March 2022 over Q4 March 2021.

Hindustan Foods surged 5.66%. The company said its board will consider a stock split on Friday, 20 May 2022. At the same meeting, the company`s board will also consider audited standalone & consolidated financial results of the company for the quarter and financial year ended 31 March 2022.

Blue Dart Express rose 0.11% after the logistics services provider`s consolidated net profit rose 52.2% to Rs 136.97 crore on 20.41% increase in revenue from operations to Rs 1,165.91 crore in Q4 March 2022 over Q4 March 2021.

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