Benchmark equity indices Sensex and Nifty reversed their early gains to close lower on Wednesday due to selling in oil & gas, banking and IT stocks amid weak trends in European markets. The 30-share BSE Sensex declined by 372.46 points or 0.69 per cent to close at 53,514.15, extending its falling streak to a third day. The index opened higher and touched the day's high of 54,211.22 amid gains in Asian markets.
The Islamic State rakes in over US $1 million (Rs 6.4 crore) per day in extortion and taxation and the dreaded terror group has enough assets to cover its expenses despite falling oil prices, according to a media report.
From the 30-share Sensex pack, Mahindra & Mahindra, Tata Steel, Adani Ports, JSW Steel, IndusInd Bank, Reliance Industries, HDFC Bank and Kotak Mahindra Bank were the biggest laggards. Tata Motors, NTPC, Hindustan Unilever, Asian Paints and Infosys were the gainers.
Slide in the rupee, surging oil prices, and rising bond yields have triggered the latest fall in the market.
The local currency moved in a range of 59.80 and 60.05 per dollar during the morning trade.
Industrial production and inflation data, quarterly earnings from IT majors and global trends would drive the equity markets in a holiday-shortened week, analysts said. Moreover, foreign fund trading activity, movement of the rupee and global crude oil prices would also dictate terms in the market, they added. Equity markets would remain closed on Friday for 'Dr Baba Saheb Ambedkar Jayanti'.
Irregular rainfall and a pick-up in commodity costs are expected to weigh on the demand and margins of fast-moving consumer goods (FMCG) companies. Most companies reported a sharp expansion in gross margins in the April-June quarter (first quarter, or Q1) of 2023-24 (FY24), given the lower prices of key raw materials and earlier price hikes. Furthermore, there were expectations that cost savings being passed on could reflect in volume growth going forward. However, these hopes could be dashed if demand recovery, especially in the rural segment, stalls, and gains on the raw material front start to recede.
Wall Street brokerage Bank of America Securities has pencilled in lower than the consensus retail inflation for the current fiscal year at 5 per cent, but higher than the previous forecast of 4.7 per cent. Stating that the June print will be critical for the future trajectory -- after the extremely high 6.3 per cent print in May, the brokerage in a report on Friday revised upwards its forecast by 30 bps to an yearly average of 5 per cent for the year to March 2022. "Though the June print will be critical for future trajectory, beyond near-term, we find some comfort from our analysis of four key factors that are likely to influence CPI inflation the most.
While consumers have enjoyed lower fuel prices, producers have cut spending and thousands of jobs
The inflow of cheap capital has also kept the rupee at a high level, making exports uncompetitive and broadening the current account deficit despite falling oil prices.
'Focus on 19,400/64,900 as the key resistance levels for the Nifty/Sensex.'
Weak equity markets too hit rupee sentiment
Benchmark indices settled lower on Friday, with the Sensex declining 111 points on the back of a sharp fall in index heavyweight Reliance Industries. The BSE benchmark went lower by 111.01 points or 0.21 per cent to settle at 52,907.93. During the day, it tanked 924.69 points or 1.74 per cent to 52,094.25. The NSE Nifty dipped 28.20 points or 0.18 per cent to close at 15,752.05.
The domestic currency had gained by 80 paise, or 1.19 per cent, in previous five trading days.
Among the Sensex firms, UltraTech Cement, Reliance Industries, ICICI Bank, HDFC Bank, Bharti Airtel, IndusInd Bank, State Bank of India, Tata Consultancy Services, Larsen & Toubro, Kotak Mahindra Bank and State Bank of India were the major gainers. In contrast, Tata Motors, Maruti, Axis Bank, Mahindra & Mahindra, ITC, NTPC, Tata Steel and Bajaj Finserv were the major laggards.
Among the Sensex firms, Infosys, Bharti Airtel, NTPC, Tata Motors, IndusInd Bank, Bajaj Finance, ICICI Bank, Tech Mahindra, Titan and Axis Bank were among the major laggards. Tata Steel, State Bank of India, Mahindra & Mahindra, Maruti and Nestle were the gainers.
From its recent lows, the stock of consumer major Marico is up 7 per cent on the back of a better-than-expected June quarter performance and robust outlook. In a pre-quarter update, the management indicated that domestic volume growth should witness an improvement in FY25, while other segments (growth portfolio, international business) too would see traction going ahead. The near-term trigger is strong sales and operating performance for Q1FY25.
A fall in the rupee could boost exports. But the flip side of the equation is that a weaker rupee could stoke some inflation
After remaining in the positive zone for three months, India's exports contracted 1.2 per cent to $33.98 billion in July, while the trade deficit widened to $23.5 billion.
Market reaction to the Union Budget was overall neutral. The income tax "gift" wasn't enough to move the needle. There was some apparent rationalisation of Customs duty structure as well as cuts on import duties of some key components for the telecom and IT industry and duty cuts on vehicle imports. Other proposals related to development of agriculture and rural economy and renewables seem to be generally positive.
ATF for domestic carriers has become 11.22 per cent cheaper since October and is expected to see more price cuts in the next three months.
Among top losers that dragged down key indices were Infosys, TCS, Reliance, SBI, Tata Steel and ITC, falling up to 2.15 per cent.
A muted revenue performance in the September quarter and weak management commentary weighed on the stock of consumer major Marico which shed 8.5 per cent to Rs 542 from its intraday highs on Tuesday. The company indicated that demand trends were similar to that of the June quarter with instances of increasing food prices and below-normal rainfall distribution in some regions impeding the anticipated recovery in rural demand.
The loss, which is made good through government subsidy, has declined since March as the rupee strengthened against the dollar and global oil prices softened.
The broader markets also ended in the red, after a rally seen in the sectors last week.
From the 30 Sensex firms, Bajaj Finance, Reliance Industries, Tata Steel, JSW Steel, Tech Mahindra, Tata Motors, Kotak Mahindra Bank and Maruti were the biggest laggards. Reliance Industries Ltd, India's most valuable company, on Monday reported a 5 per cent fall in the July-September quarter net profit as weak oil refining and petrochemical business hurt operational performance. ICICI Bank, Bharti Airtel, Asian Paints, Adani Ports, UltraTech Cement and HCL Technologies were among the gainers.
Already retail inflation has risen to 6.07 per cent in February, crossing the upper band of the Parliamentary mandate. This is the second consecutive month in 2022 when retail inflation has crossed the 6 per cent mark having hit 6.01 per cent in January.
Domestic air passenger traffic plunged around 43 per cent month-on-month at 64 lakh in January 2022 as the third wave of the pandemic and the resultant restrictions by state governments kept flyers away from air travel, Icra said on Tuesday. The domestic passenger volume in December 2021 was recorded at 112 lakh. The rating agency said it is expecting the recovery process to remain subdued during March quarter and that the jet fuel prices continue to be a drag on the sector. The passenger traffic declined 17 per cent last month over 77 lakh passengers transported by domestic airlines on local routes in January 2021, Icra said.
Domestic airlines expect the fall in prices of aviation fuel to boost their earnings from the quarter ending December.
The President said he made the decision in consultation with European allies but added they may not be in a position to join the US in banning Russian energy imports.
Under-recovery or the difference between retail price and its imported cost on diesel was 8 paisa per litre in the first half of September.
Among the Sensex firms, Tech Mahindra, HCL Technologies, Wipro, Infosys, Bajaj Finance, Tata Consultancy Services, Bajaj Finserv and ICICI Bank were the major gainers. Power Grid, Nestle, Asian Paints and Hindustan Unilever were among the laggards.
Dollar debt and higher import cost might impact earnings by up to 30%.
Top losers in the Sensex pack include Bharti Airtel, Infosys, Asian Paints, RIL, Coal India, HDFC Bank, HDFC, TCS, ONGC and M&M, falling up to 3.09 per cent.
Attractive pricing coupled with improving prospects make the offer lucrative
Wholesale inflation fell to a 4-month low of 1.31 per cent in August due to a decline in prices of vegetables and fuel, even though onion and potato prices spiked, according to official data released on Tuesday. Wholesale price index-based inflation fell for the second straight month in August after it hit a high of 3.43 per cent in May. Inflation in July was 2.04 per cent. In August last year, WPI inflation was (-) 0.46 per cent.
Britain's 'remain' option gaining traction, with the implied probability of such an outcome at 78 per cent.
Consumers are paying an exorbitant 180 per cent tax on petrol, and 140 per cent on diesel in Delhi and in most other towns in India. Little wonder then that the central government expects a staggering Rs 3.46 trillion by levying excise duties on retail sale of the two fuels this year, and Rs 3.2 trillion the next. States would generally have had reason to cheer, as they command a 41 per cent share in Centre's tax revenues. But as the Centre has raised excise duties in the form of "cess," the revenue proceeds are by nature not shareable with states.
Increased demand from oil importers for the American currency kept pressure on the rupee
It seems the financial headroom for India Inc will get worse, given the rising gap between profit growth and interest obligations.
