Shares plunge as broader market meltdown deepens, AMFI advisory spooks investors

The domestic stock markets plunged on Wednesday in a broad sell-off, as the recent meltdown in mid and small-cap stocks continued to wreak havoc. The benchmark Sensex crashed 906.07 points or 1.23% to settle at 72,761.89, while the Nifty 50 tumbled 338 points or 1.51% to close at 21,997.70.

Adani Ports & SEZ (down 6.97%), Adani Enterprises (down 6.91%) and Reliance Industries (down 2.90%) were major drags.

An initial rally fueled by moderate inflation data and steady industrial production growth quickly evaporated. Selling pressure intensified in the afternoon, mercilessly pushing the Nifty below the crucial 22,000 mark. Broader markets bore the brunt of the sell-off, with BSE mid-cap and small-cap indices cratering 4-5%.

The market breadth painted a brutal picture. On the BSE, a mere 400 shares managed to rise, while a staggering 3516 shares plunged. A measly 60 shares remained unchanged.

The NSE`s India VIX, a key indicator of market volatility expectations, surged by 5.82% to 14.43.

Real estate, media, PSU banks, telecom, power, oil & gas, and metals were among the sectors clobbered the worst, with losses hammering them down 4-6%. FMCG was the lone survivor, emerging as the only positive sectoral index.

The carnage stems from a recent advisory issued by the Association of Mutual Funds in India (AMFI) on February 28th. Acting on concerns raised by the Securities and Exchange Board of India (SEBI) about inflated valuations in the mid-cap and small-cap segments, AMFI spooked investors by advising its members to rein in inflows into these schemes. This cautious approach triggered a correction in these segments, sending shockwaves through the market.

Economy:

India`s industrial growth slowed down to 3.8% in January, compared to December`s revised figure of 4.2%. This suggests a slight decrease in factory output.

India`s Consumer Price Index (CPI) inflation rate remained steady at 5.09% in February, staying within the central bank`s target range. This is the sixth month in a row inflation has been within the target, but it is still above the medium-term goal of 4%.

Numbers to Track:

The yield on India`s 10-year benchmark federal paper rose 0.21% to 7.041 as compared with the previous close of 7.026.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 82.8375, compared with its close of 82.8000 during the previous trading session.

MCX Gold futures for 5 April 2024 settlement was up 0.02% to Rs 65,497.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies rose 0.02% to 102.98.

The United States 10-year bond yield gained 0.19% to 4.164.

In the commodities market, Brent crude for April 2024 settlement added $1.08 or 1.32% to $83 a barrel.

Global Markets:

European stocks advanced while the Asian market ended mixed on Wednesday after Wall Street jumped overnight, following U.S. inflation data that largely met expectations.

The U.S. consumer price index in February climbed 0.4% on the month and 3.2% year over year, the Bureau of Labor Statistics said on Tuesday.

Overnight in the U.S., all three major indexes climbed after the inflation readings. The tech-heavy Nasdaq saw the biggest jump, while the S&P 500 even reached a new record high.

Stocks in Spotlight:

Larsen & Toubro fell 2.18%. The civil construction firm�s construction arm secured a �significant order� for its Buildings & Factories (B&F) vertical from the All-India Institute of Medical Sciences (AIIMS) Madurai, Tamil Nadu.

Vedanta tumbled 6.83%. SEBI ordered Vedanta to pay Rs 77.62 crore to Cairn for delayed dividend payments and barred its board from accessing the capital market.

Aurobindo Pharma slipped 3.79%. Eugia Pharma Specialities, a wholly owned subsidiary of Aurobindo Pharma has started re-distribution of aseptic products manufactured at Unit III, a formulation manufacturing facility located in Telangana, which was temporarily stopped.

Shree Cement declined 2.42%. The company said that it has entered into an asset purchase agreement with StarCrete LLP for purchase of operational RMC (ready mix concrete) plants located in Mumbai Metropolitan Region of Maharashtra.

Shakti Pumps (India) hit a lower circuit of 5%. The company announced that it has received work order worth Rs 73.32 crore from Haryana Renewable Energy Department (HAREDA) for supply of 2,130 pumps under KUSUM 3 scheme.

Salasar Techno Engineering hit a lower circuit of 5%. The company said that it has secured a notification of award (NOA) for 7 distinct contracts aggregately worth Rs 1,033.78 crore from Tamil Nadu Generation and Distribution Corporation (TANGEDCO).

Oriental Rail Infrastructure hit a lower circuit of 5%. The company announced that its wholly owned subsidiary, Oriental Foundry has received an order from Ministry of Railways, Indian Railways to manufacture and supply 3,055 BOXNHL Wagons worth Rs 1,249 crore.

Rail Vikas Nigam (RVNL) dropped 8.52%. The company announced that it has received a letter of award (LoA) from Madhya Pradesh Paschim Kshetra Vidyut Vitran Company (MPPKVVCL) to install new 11 KV line in Jhabua division.

SJVN tumbled 10%. The company announced that its wholly owned subsidiary, SJVN Green Energy (SGEL) has received letter of intent (LoI) for 500 MW solar power project from Gujarat Urja Vikas Nigam (GUVNL).

Lumax Industries fell 1.80%. The company said that its board has approved a proposal to set up new manufacturing facility at Sanand (Plant-3), Gujarat, and also the expansion of Chakan Plant (Phase-II) at Pune, Maharashtra.

New Listing:

Shares of J.G.Chemicals ended at Rs 184.65 on the BSE, representing a discount of 16.45% as compared with the issue price of Rs 221.

The scrip was listed at Rs 211, exhibiting a discount of 4.52% to the issue price.

On the BSE, over 5.03 lakh shares of the company were traded in the counter.

IPO Update:

The initial public offer (IPO) of Popular Vehicles and Services received 65,31,800 bids for shares as against 1,44,15,110 shares on offer, according to stock exchange data at 17:00 IST on Wednesday (13 March 2024). The issue was subscribed 45%.

The issue opened for bidding on Tuesday (12 March 2024) and it will close on Thursday (14 March 2024). The price band of the IPO is fixed at Rs 280 to 295 per share. An investor can bid for a minimum of 50 equity shares and in multiples thereof.

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