Shares under pressure; breadth remains weak

The benchmark indices continued to trade near the day`s low in mid-morning trade. The Nifty hovered above its crucial 17,000 level. All the sectoral indices on the NSE were in the red.

The sentiment was impacted by negative global cues and geopolitical worries. Asian stocks tumbled after the White House warned of a possible imminent Russian invasion of Ukraine. Crude oil prices spiked to 7-year highs due to the Ukraine crisis. In the commodities market, Brent crude for April 2022 settlement rose $1.06 at $95.50 a barrel.

At 11:30 IST, the barometer index, the S&P BSE Sensex, dropped 1,182.30 points or 2.03% at 56,970.62. The Nifty 50 index lost 359.20 points or 2.07% at 17,015.55.

In the broader market, the S&P BSE Mid-Cap index fell 1.92% while the S&P BSE Small-Cap index shed 2.15%.

The market breadth was weak. On the BSE, 665 shares rose and 2,694 shares fell. A total of 148 shares were unchanged.

Foreign portfolio investors (FPIs) sold shares worth Rs 6,266.75 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 2,881.32 crore in the Indian equity market on 27 January 2022, provisional data showed.

Economy:

Industrial output slumped to a 10-month low of 0.4% in December 2021, dragged down by manufacturing, capital goods and consumer durables output along with an unfavourable base, according to data released on Friday by the National Statistical Office (NSO). The IIP had registered a growth of 1.3% a month ago and 2.2% in December 2020.

LIC IPO

Life Insurance Corporation of India (LIC) has filed its draft share sale prospectus with the capital markets regulator SEBI, paving the way for India`s largest initial public offering (IPO). LIC plans to sell 31.62 crore shares, which is about 5% of its total equity base. The IPO issue is expected to be the country`s largest public issue and will hit the capital market in March 2022. LIC will offload 31.62 crore shares. As of September 2021, its assets under management (AUM) stood at Rs 39.6 lakh crore. The embedded value of LIC as of 30 September 2021, stood at Rs 5,39,686 crore.

Buzzing Index:

The Nifty Metal index declined 2.59% to 5,867.50. The index lost 3.16% in two trading sessions.

JSW Steel (down 5.06%), Hindustan Copper (down 4.72%), APL Apollo Tubes (down 4.26%), Welspun Corp (down 3.10%) and Tata Steel (down 2.99%) were the top losers in the Metal segment.

Maithan Alloys soared 10.37%. The company`s consolidated net profit surged 441.23% to Rs 300.11 crore on 107.08% rise in net sales to Rs 923.32 crore in Q3 December 2021 as over Q3 December 2020. On a consolidated basis, profit before tax (PBT) jumped 451.52% to Rs 394.34 crore in Q3 December 2021 over Q3 December 2020. Total expenses rose 40.23% year-on-year to Rs 533.53 crore in Q3 December 2021. Cost of raw material consumed rose 38.01% to Rs 262.12 crore and employee benefit expense surged 188.36% to Rs 28.49 crore.

Stocks in Spotlight:

Sobha rose 0.05%. The firm reported 60% rise in consolidated net profit to Rs 33.2 crore on a 1% decline in total income to Rs 688.8 crore in Q3 FY22 over Q3 FY21. On the segmental front, Real Estate revenue was Rs 446.6 crore (down 4% Y-o-Y), Contractual & Manufacturing revenue was Rs 221.6 crore (up 1% Y-o-Y) and other income was Rs 20.6 crore (up 2.3x Y-o-Y) during the quarter. EBIDTA was down 1% to Rs 135.9 crore in Q3 FY22 from Rs 159.8 crore in Q3 FY21. EBIDTA margin was 20% in Q3 FY22 as against 19% in Q3 FY21.

Sequent Scientific spurted 9.35%. The company`s consolidated net profit dropped 51.1% to Rs 18.56 crore on a 0.8% increase in net sales to Rs 358.05 crore in Q3 FY22 over Q3 FY21. Consolidated profit before tax (PBT) tanked 52.3% to Rs 23.61 crore in Q3 FY22 from Rs 49.54 crore in Q3 FY21. Active Pharmaceutical Ingredients (API) sales fell 18.8% to Rs 102.60 in Q3 December 2021 as against Rs 126.40 crore in Q3 December 2020. EBITDA (post-ESOP) skid 42.81% to Rs 36.20 crore in Q3 FY22 as against Rs 63.30 crore in Q3 FY21. EBITDA margin stood at 10.1% in Q3 December 2021 from 17.8% in Q3 December 2020. Profit margin stood at 4.8% in Q3 December 2021 from 10% in Q3 December 2020.

Glenmark Pharmaceuticals slipped 0.07%. The pharmaceutical major`s consolidated net profit fell 3.4% to Rs 239.75 crore on a 13.9% rise in net sales to Rs 3,141.47 crore in Q3 December 2021 over Q3 December 2020. Consolidated profit before tax (PBT) slipped 1.4% to Rs 343.04 crore in Q3 FY22 from Rs 347.97 crore in Q3 FY21. EBITDA was at Rs 693.20 crore for the quarter ended as on 31 December 2021 as against Rs 530.10 crore in the previous corresponding quarter, registering an increase of 30.8% Y-o-Y (year-on-year). On a consolidated basis, Active Pharmaceutical Ingredients (API) sales fell 5.27% to Rs 303.20 in Q3 December 2021 as against Rs 320.10 crore in Q3 December 2020.

Global Markets:

Overseas, most Asian stocks are trading lower on Monday on tensions between Russia and Ukraine. Some airlines have reportedly canceled or diverted flights to Ukraine amid heightened fears that an invasion by Russia is imminent despite intensive weekend talks between the Kremlin and the West.

US stocks slid on Friday as increased tensions between Ukraine and Russia led investors to dump risky assets like equities.

In economic data, the University of Michigan`s preliminary February gauge of consumer sentiment fell to 61.7, from January`s level of 67.2, the lowest reading since October of 2011.

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