Closing Bell: Selloff continues for 3rd day, Sensex slips 456 pts, Nifty below 22,150

Indian benchmark indices ended lower for the third consecutive session on April 16 with Nifty below 22,150. At close, the Sensex was down 456.10 points or 0.62 percent at 72,943.68, and the Nifty was down 124.60 points or 0.56 percent at 22,147.9.

We wrap up today's edition of the Moneycontrol live market blog, and will be back Thursday morning with all the latest updates and alerts. Please visit www.moneycontrol.com/markets/global-indices for all the global market action.

The domestic market sustained its consolidation trend for the third consecutive day, amid apprehensions regarding geopolitical tensions and drop in the probability of a cut rate in the short-term. Heightened concerns arose following stronger-than-anticipated US retail sales, amplifying the assumption that the US Federal Reserve might delay rate cuts, leading to a notable uptick in the dollar index and US bond yields. The IT sector saw the most significant decline, primarily due to expectations of earnings being affected by the weak discretionary spending in the US and muted domestic Q4 results.

The Bank Nifty index, after a shaky start, witnessed a recovery in the latter half of the session and managed to close above its 20-day moving average (20DMA), which is situated at 47,500. If the index sustains above the 47,500-47,400 range, it could experience a pullback towards the 48,000 level. However, a break below 47,300 on a closing basis might trigger further selling pressure, potentially driving the index down towards the 46,500 level.

Technically, the trend has weakened as the index fell below the 21EMA. However, following the sharp decline, the index may find short-term support within the 21,930-22,030 bands, where previous congestion occurred. Conversely, failure to maintain support at 21,930 could exacerbate panic in the market. On the higher end, resistance for the short term is positioned at 22,400.

Stock Market LIVE Updates | Nifty IT, Nifty PSU Bank indices top sectoral laggards, slip up to 2%

Nifty slips below 22,150; Nifty Smallcap index outperforms

The Sensex was down 456.10 points or 0.62 percent at 72,943.68, and the Nifty was down 124.60 points or 0.56 percent at 22,147.90. The market breadth was in favour of gainers as around 2,218 shares advanced, 1,464 shares declined, and 105 shares unchanged.

--Net Profit down 5.5% at Rs138 cr vs Rs146 cr (YoY)

--Revenue up 3% at Rs738 cr vs Rs715 cr (YoY)

--EBITDA down 5% at Rs193 cr vs Rs203 cr (YoY)

--Margin at 26% vs 28% (YoY)

According to Motilal Oswal Financial Services Report, Prime Minister Narendra Modi launched the BJP's manifesto for the 2024 Lok Sabha Elections, aiming for a third consecutive term with a majority. The manifesto promises policy continuity to propel India to the world's third-largest economy while maintaining macroeconomic balance and avoiding competitive populism. It prioritizes infrastructure development, manufacturing, and capex, alongside social initiatives like free ration, expanded healthcare coverage, and support for the "Neo Middle Class."

Economic proposals include bolstering manufacturing, digital and physical infrastructure, and empowering MSMEs. India's favorable macroeconomic and microeconomic conditions, coupled with expectations of political continuity, bode well for markets in the short to medium term. The report recommends overweighting domestic cyclicals like BFSI, Industrials, Real Estate, and Consumer Discretionary, with equal weight on other sectors like Healthcare, Automobile, Metals, O&G, and Telecom, and underweight on IT.

Morgan Stanley analysts stated that interest rate cuts are unlikely in India for the fiscal year 2024/25 due to the Federal Reserve's policy shift and strong domestic growth. They emphasized the need for higher real rates, citing improving productivity, increased investment, and inflation above the 4% target. With India's key policy rate expected to remain at 6.5%, real rates are projected to average 200 basis points. The Monetary Policy Committee recently maintained the key repo rate at its current level, marking the seventh consecutive meeting without a change, following a cumulative increase of 250 basis points between May 2022 and February 2023.

- Our AMC business is the largest non-bank asset management business in India

- AB Capital has become the growth engine for the group

- With Rs 4 lakh crore AUM, AB Capital has emerged as the leader

- ABCD plans to acquire 30 million customers in 3 years

JM Financial initiated a buy rating on ASK Automotive and kept a target price of Rs 375 a share, up 23 percent from its current market price. ASK Automotive (ASK) dominates the market with a 50% share in 2W brake systems. Despite entering late, it's making strides in aluminium lightweight components and safety control cables for 2W. ASK's success stems from its in-house expertise in design and engineering, focusing on quality, cost, and timely delivery. It consistently outpaces the 2W industry growth, driven by portfolio expansion and customer acquisition. With the shift to EVs, rising kit values in ALP, and expansion into PV and non-auto sectors, ASK is poised for strong growth. JM Financial predicts a 14% revenue and 29% EPS growth CAGR from FY24-26E, fueled by electrification and non-auto exports. Solid return ratios and robust FCF generation further bolster confidence.

“The equity market traded lower tracking the global indexes, especially the US equity indexes, responding to mainly external developments. The marginally higher US retail inflation rate released two days back has been quite hurriedly interpreted by many market participants as a potential impediment to early Fed rate cuts. This led to the US markets losing some altitude, but the better interpretation of persistently higher inflation numbers is the enhanced potential for a faster slowdown in the economy.

The Fed may cut rates earlier than expected but the prospects of higher rates for a longer time, as visualized at present, may hamper the progress of the markets in the immediate term. The domestic equity market cannot be dragged down too much on account of the influx of liquidity into the markets through retail participation which is equivalent to close to US$ 3 billion per month as of March 2024. Meantime, the potential impact of the Middle East situation escalating should not be undermined at this juncture.”

Veteran investor Radakishan Damani bought 2.33 lakh shares, or a 1.51 percent stake in VST Industries at an average price of Rs 3,689.96. Damani, who held 32.89 percent stake in the company as of December 2023, bought shares worth Rs 86.25 crore. This sale has increased his stake to 34.4 percent.

In January, Damani had acquired 1.44 percent stake in the company, which took his shareholding to above 30 percent mark and made him the largest shareholder in the company as the promoters held 32.16 percent stake.

Meanwhile, HDFC Mutual fund sold 3.3 lakh shares in the company at Rs 3,690.23 per share. HDFC Mutual Fund sold 2.15 percent stake. They held 5.84 percent stake til December 2023 as per shareholding data.

Broadband technology company Sterlite Technologies has raised Rs 1,000 crore by issuing equity to Qualified Institutional Investors (QIP) including HDFC Mutual Fund, Nippon Life India, Goldman Sachs, and Bandhan Mutual Fund, the company said on Tuesday. Post the allotment, the paid-up equity share capital of Sterlite Technologies (STL) has increased to Rs 97.5 crore comprising 48.5 crore equity shares.

"Sterlite Tech has raised Rs 1,000 crore through a Qualified Institutional Placement (QIP) route," the company said in a regulatory filing. The company approved the issue and allotment of 8.84 crore equity shares to qualified institutional investors, including HDFC Mutual Fund, Nippon Life India, Goldman Sachs, and Bandhan Mutual Fund, aggregating to Rs 1,000 crore.

The Indian rupee dropped to a record low on Tuesday, weighed by the rise in U.S. Treasury yields on bets that the Federal Reserve will delay rate cuts and on simmering worries that the situation in the Middle East could worsen.

The rupee slipped to a lifetime low of 83.5350 to the U.S. dollar near the open before inching up to 83.4875 at 10:24 a.m. IST. The local currency had closed at 83.4500 on Monday. The Reserve Bank of India likely intervened via state-run banks to curb the rupee's decline, traders said.

"The RBI has yet again managed to snuff out any possibility of a large move that would have made a lot of people nervous," Kunal Kurani, associate vice president at Mecklai Financial, said. Read More

Nomura had raised its price target for Exide Industries to Rs 485 per share while retaining its 'buy' call on the stock. They highlighted the validation of Exide's EV cells through a memorandum of understanding (MoU) with Hyundai/Kia, emphasizing the importance of alliances with global players, government support, and traction in the EV market for Exide's success. Nomura had been more optimistic about Exide's potential to secure new orders from other original equipment manufacturers (OEMs). They had noted that OEMs needed to meet a 50% localization requirement for domestic value addition to comply with Production Linked Incentive (PLI) norms. Nomura had suggested raising the multiple to value Exide's Li-Ion cell capex at 3 times book value, noting that this expenditure aligned with leading global peers in the industry.

Market at 11 AM

The Sensex was down 343.70 points or 0.47 percent at 73,056.08, and the Nifty was down 74.70 points or 0.34 percent at 22,197.80. About 2,176 shares rose, 914  fell, and 90 were unchanged.

Stock Market LIVE Updates | ONGC, Exide Industries hit 52-week highs, buck weak market trend

Caplin Point Laboratories has received approval from the US Food and Drug Administration for Ofloxacin ophthalmic solution. The drug is used in the treatment of bacterial infections of the eye.

Stock Market LIVE Updates | ONGC continues to lead gains in BSE Oil & Gas index for second straight day

Surging oil prices amidst the ongoing geopolitical tensions in the Middle East have lifted sentiment for domestic oil refiners, leading to an over 3 percent spike in shares of ONGC.

Global brokerage firm Jefferies maintained a 'buy' rating on India's biggest private lender, HDFC Bank, saying that its margin improvement will be key to increasing the RoA and re-rating valuations. The brokerage firm assigned a target price of Rs 1,800 per share, signalling an upside of 20 percent from current levels.

So far this year, the stock of this private sector lender has declined over 12 percent, outperforming 2.4 percent rise in benchmark Nifty. Earlier, HDFC Bank shares had hit a 52-week low of Rs 1,363 on February 14, 2024 due to weak third-quarter financials.

Analysts at Jefferies believe that HDFC Bank's potential for credit growth over the next five years would build sensitivity to deposit market share gains. For instance, if the lender's deposits record a 17-18 percent compounded annual growth rate (CAGR), then loans can grow at 13 percent. Find out more

Shares of Jio Financial Services Ltd jumped as much as 5 percent in intraday trading on April 16, after announcing an equal joint venture with BlackRock to launch wealth management business. The Jio Financial stock was trading up 4 percent at Rs 368 on NSE at 9.42 am.

Over the past six months, Jio shares have soared 64 percent. Notably, Jio has delivered positive monthly returns consistently from November 2023 to March 2024. The Jio Financial made its debut on the stock exchanges in August 2023.

In an exchange filing, Jio said that the company has agreed to form a joint venture with BlackRock Inc for "undertaking wealth business, including incorporation of a wealth management company and subsequent incorporation of a brokerage company in India."

Foreign institutional investors such as Rajiv Jain-led GQG Partners, Fidelity, and several domestic institutional investors, including HDFC Mutual Fund, Motilal Oswal Mutual Fund and Quant Mutual Fund, are amongst a host of investors that are looking to participate in the mega Rs 18,000 crore follow-on public offering (FPO) of Vodafone Idea Ltd, people aware of the developments said.

These investors are likely to participate in the anchor book allocation of the FPO, the biggest such share sale by an Indian company to date and may also bid for shares in the main book of the FPO, which opens for subscription on April 18, the people said.The anchor book allocation for the FPO will be announced later on Tuesday. Read More

Sensex Today | Nifty Bank index down 0.5 percent dragged by AU Small Finance Bank, IndusInd Bank, PNB

CRISIL, Den Networks, Integra Essentia, Lotus Chocolate Company, and SG Mart will release their quarterly earnings on April 16.

Sensex Today | Market at 10 AM

The Sensex was down 312.90 points or 0.43 percent at 73,086.88, and the Nifty was down 73.20 points or 0.33 percent at 22,199.30. About 2084 shares advanced, 829 shares declined, and 98 shares unchanged.

Stock Market LIVE Updates | Jefferies View On HDFC Bank

-Buy call, target Rs 1,800 per share
-Framework on company’s potential credit growth for next 5 years builds sensitivity
-Framework of credit card growth builds sensitivity to deposit mkt share gains
-Over Mar’24-29, if co grows deposits at 17-18 percent CAGR, then loans can grow at 13 percent
Improvement in NIMs is key to rise in RoA & valuation re-rating

Manappuram Finance's board of directors will be meeting on April 19 to consider the raising funds up to US$ 500 million, in one or more tranches, via external commercial borrowings.

The USD-INR 26 April futures contract remained within a narrow range. According to the daily technical chart, the pair is currently positioned above its moving average trend-line support level of 83.36, with the RSI holding above the 50 mark. However, the MACD indicates negative divergence, signalling potential downward pressure, and the pair encounters significant resistance at higher levels.

On the daily chart, support is evident at 83.30-83.05, while resistance is noted at 83.70-83.94. With the pair trading above its support level at 83.36, it is anticipated to fluctuate within the range of 82.74-84.10 for the remainder of the week.

Cipla Health, the wholly owned subsidiary of Cipla, has signed a business transfer agreement, for purchase of the distribution and marketing business undertaking of cosmetics and personal care business from Ivia Beaute, India, through a slump sale arrangement on a going concern basis. The deal value of Rs 130 crore on closing date includes Rs 110 crore if certain financial parameters are met for the next 3 years.

Sensex Today | Nifty Information Technology index shed nearly 1 percent dragged by LTIMindtree, Coforge, Mphasis

Sensex Today | BSE Oil & Gas index gained 0.7 percent led by Gail, IOC, HPCL

Gujarat Gas has signed a non-binding Memorandum of Understanding (MOU) with Indian Oil Corporation, to broaden the scope and accessibility of energy solutions for consumers. As per the MoU, Indian Oil Corporation will provide liquid fuels, automotive lubricants, greases, and specialties at Gujarat Gas outlets. Further, Gujarat Gas will set up CNG facility and CNG Mother facility at Indian Oil outlets.

Two issues- one economic and the other geopolitical- will continue to weigh on markets in the near-term. The economic factor is the rising US bond yields ( 10-year yield is above 4.6% ) which reduces the prospects of rate cuts by the Fed this year. High bond yields are negative for risky assets like equity and will accelerate FII selling in emerging markets like India.

The market is more concerned about the geopolitical issue. Israel’s military chief’s statement that “there will be a response to Iran’s attack on Israel” has increased the probability of escalation of tensions in the Middle East. We don’t know the timing and the nature of the Israeli response, which can be totally unexpected. This is likely to keep the markets weak in the near-term.

Investors may wait and watch the developments. Meanwhile, long-term investors can slowly accumulate high quality large-caps on corrections. Further corrections will make valuations of large-caps fair. Largecaps in banking, IT, autos, capital goods, oil & gas and cement are ideal for long-term investment.

Since metal prices are firming up, metal stocks will remain resilient.

Jio Financial Services has signed an agreement with BlackRock Inc and BlackRock Advisors Singapore Pte to form a 50:50 joint venture for setting up wealth management and broking business in India. The launch of the wealth management and broking business is subject to regulatory and statutory approvals.

Indian indices opened on negative note on April 16 with Nifty below 22,150.

The Sensex was down 504.10 points or 0.69 percent at 72,895.68, and the Nifty was down 138.30 points or 0.62 percent at 22,134.20. About 1078 shares advanced, 1131 shares declined, and 118 shares unchanged.

Titan Company, Bharti Airtel, SBI Life Insurance, Eicher Motors and Nestle were among major gainers on the Nifty, while losers were LTIMindtree, NTPC, Bajaj Finance, TCS and Infosys.

Geopolitical tension-led correction dragged the Indian equities lower to end the day at 22,273. An early sign from GIFT Nifty indicates another round of selling in the markets to test its long-term trendline and 50DMA support. Except for the Metal, all the sectors have observed a sharp correction and the ongoing correction will continue further providing a good opportunity for the investors to add good quality stocks. Stock-specific buying can be seen in the Oil & Gas and Metal segments, while pressure will likely remain on the NBFC counters.

Investors woke up to a challenging start this Tuesday, as global cues remained weak. Market sentiment was impacted by higher-than-expected inflation data and reports of potential tensions between Iran and Israel. Amidst this backdrop, attention is also on Chinese GDP data, expected to shed light on Beijing's stimulus efforts. As Q4 results from Corporate India begin to trickle in, concerns loom over rising US bond yields and net selling by FIIs. However, there's a silver lining with oil prices declining despite geopolitical uncertainties, and the IMD's prediction of an 'above normal' monsoon.

The consensus anticipates further declines in global stock markets, with Nifty's technical support identified at 22157. Options data suggests a trading range of 21700-23000 for Nifty, with attention also on Vodafone Idea’s upcoming FPO. Before delving into specifics, the recommended trade strategy includes buying on dips for both Nifty and Bank Nifty, with defined stop-loss and target levels.

Indian rupee opened at record low at 83.51 per dollar versus previous close of 83.45.

Benchmark indices are trading weak in the pre-opening session.

The Sensex was down 340 points or 0.46 percent at 73,059.78, and the Nifty was down 119.80 points or 0.54 percent at 22,152.70.

The NSE has added Bandhan Bank, Exide Industries, and Zee Entertainment Enterprises to the F&O ban list for April 16, while retaining Balrampur Chini Mills, GNFC, Hindustan Copper, India Cements, Metropolis Healthcare, National Aluminium Company, Piramal Enterprises, and SAIL to the said list. Vodafone Idea was removed from the said list.

Domestic airlines carried 133.68 lakh passengers in March, an increase of nearly 3.7 per cent on an annual basis, according to official data released on Monday.

In March 2023, domestic air traffic stood at 128.93 lakh and the count stood at 126.48 lakh in February this year.

In terms of On Time Performance (OTP), Akasa Air topped the list at 84.5 per cent, followed by AIX Connect (83 per cent), IndiGo (81.3 per cent), Vistara (76.6 per cent), Air India (71.9 per cent) and SpiceJet (63.6 per cent). Read More

Foreign institutional investors (FIIs) net sold shares worth Rs 3,268 crore, while domestic institutional investors (DIIs) purchased Rs 4,762.93 crore worth of stocks on April 15, provisional data from the NSE showed.

The initial public offering of Maharashtra-based JNK India Ltd will open for subscription on April 23 and close on 25th.

Anchor investors will be open to place their bids on April 22. Basis of allotment will be on April 26, refunds and credit of equity shares will be on April 29 and the firm will list on exchanges on April 30.

The IPO consists of a fresh issue of Rs 300 crore and an offer-for-sale of up to 8.42 million by its existing shareholders and promoters. The OFS comprises up to 1.12 million shares by Goutam Rampelli, up to 2.43 million by JNK Global, up to 4.4 million by Mascot Capital and Marketing and up to 4.68 lakh shares by Milind Joshi. Read More

Q1 GDP grows 5.3% YoY
China March industrial output rises 4.5% YoY
March retail sales rise 3.1% YoY

Cipla announced on April 15 that its wholly owned subsidiary and consumer healthcare arm of the company Cipla Health Limited (CHL) has signed a business transfer agreement for the purchase of the distribution and marketing business undertaking of cosmetics and personal care business of Ivia Beaute Private Limited including Ivia’s brands namely Astaberry, Ikin and Bhimsaini on a worldwide basis. The cost of acquisition will be Rs 130 crore on the closing date.

In a regulatory filing, Cipla said the transaction is expected to be completed within 60 days from the signing of the business transfer agreement or such other date mutually agreed between the parties in writing and shall be subject to successful completion/waiver of the conditions precedent and closing conditions as mentioned in such business transfer agreement.

Life Insurance Corporation of India (LIC) has increased its stake in FMCG major Hindustan Unilever, according to an exchange filed by the largest life insurance company of the country on April 15.

The stake was increased from 4.99 percent to 5.01 percent, according to the filing.

“Pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, this is to inform that the Life Insurance Corporation of India (“the Corporation”) has increased its shareholding in "Hindustan Unilever Limited” from 11,74,63,555 to 11,77,18,555 Equity Shares, i.e., 4.99% to 5.01% of the paidup capital of the said Company,” the filing said. Read More

The worsening situation in the Middle-East with conflict between Iran and Israel flaring up had engulfed Dalal Street. Investors worldwide, including in India, have turned cautious and resorted to profit-taking. If the situation turns bad, we may see extended broad-based selling in local markets. Geo political tensions and uncertainty over interest rate cut could have a bearing on the markets.

Stock Market LIVE Updates | Jio Financial Services announced on April 15 that it has entered into a joint venture with US-based BlackRock for wealth management and broking business in India.

In an exchange filing, the Reliance Group-backed financial entity said it has signed a 50:50 joint venture for the purpose of undertaking wealth business including incorporation of a wealth management company and subsequent incorporation of a brokerage company in India. Read More

Global jitters dented the market sentiments across the globe and Indian markets also reacted in the same manner by commencing the week on a tepid note. An attempt at recovery was seen during the day but bears tightened their grip and dragged the Index lower to end the session at 22,272.50 declining by 246.90 points. All the sectors ended the day in red; with Media and PSU Banks being the worst performers.

Compared to Nifty50; Mid and Smallcaps corrected more and ended the session with a loss of 1.57% & 1.73% respectively. By forming a bearish candle, the Index breached its previous support and closed below the same.

We believe that if the correction continues, the Index is likely to reverse from its support level of 22,185 while the higher side is capped at 22,430.