Benchmarks end with minor losses; banks drag

The equity benchmarks ended flat today after early gains fizzled. Profit booking set in after the key indices touched record highs, with banking and FMCG stocks leading the decline. IT stocks provided the lone bright spot. Investors now turn their attention to key US data points, including jobs figures and the Fed Chair`s speech, for clues on the future trajectory of interest rates.

In the barometer index, the barometer index, the S&P BSE Sensex was down 34.74 points or 0.04% to 79,441.45. The Nifty 50 index lost 18.10 points or 0.07% to 24,123.85.

The Sensex and Nifty clocked an all-time high of 79,855.87 and 24,236.35, respectively in early trade.

Tata Motors (down 2.07%), State Bank of India (down 1.87%), ICICI Bank (down 1.79%) and Bajaj Finance (down 1.54%) were major drags.

In the broader market, the S&P BSE Mid-Cap index declined 0.57% and the S&P BSE Small-Cap index rose 0.07%. Both the indices hit record high levels today.

The market breadth was positive. On the BSE, 1965 shares rose and 1953 shares fell. A total of 90 shares were unchanged.

The NSE`s India VIX, a gauge of market`s expectation of volatility over the near term, declined 1.37% to 13.64.

Numbers to Track:

The yield on India`s 10-year benchmark federal shed 0.04% to 7.010 as compared with previous close 7.013.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 83.5050, compared with its close of 83.4400 during the previous trading session.

MCX Gold futures for 5 August 2024 settlement fell 0.10% to Rs 71,580.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was up 0.12% to 106.03.

The United States 10-year bond yield declined 0.45% to 4.459.

In the commodities market, Brent crude for September 2024 settlement gained 70 cents or 0.81% to $87.30 a barrel.

Global Markets:

The Dow Jones index futures were down 146 points, indicating a weak opening in the US stocks today.

European market declined on Tuesday as traders look ahead to the release of the euro zone`s latest inflation data for clues towards the timing of future European Central Bank interest rate cuts.

Most Asian stocks advanced as investors assessed the South Korea`s inflation, which came in at 2.4% for June, slower than a rise of 2.7% in May and the slowest since July 2023.

Megacap growth stocks, like Apple and Tesla, propelled the tech-heavy Nasdaq to a strong start for the new quarter. The broader market also participated in the gains, with the Dow and S&P 500 edging higher in pre-holiday trading.

Investors are awaiting key U.S. labor market data later this week, hoping for insights into the Federal Reserve`s interest rate plans. The Dow Jones Industrial Average rose 0.13%, the S&P 500 gained 0.27%, and the Nasdaq Composite surged 0.83%. Notably, the tech sector jumped 1.3% in the first trading session of July.

While the US manufacturing PMI data for June indicated continued contraction, a bright spot emerged: prices paid dropped to a six-month low. This could be a welcome sign for the Fed`s fight against inflation. Despite this, market expectations remain for around two interest rate cuts later this year, beginning in September, according to LSEG FedWatch.

Auto Sales Impact:

Maruti Suzuki India shed 0.56%. The car major`s total output dipped 2.94% year-over-year, with production reaching 133,095 units compared to 137,133 units in June 2023.

Tata Motors declined 2.07% after its total domestic sales for June 2024 stood at 74,147 vehicles, registering de-growth of 8% compared to 80,383 units in June 2023.

Eicher Motors rose 0.22%. The company informed that it has sold 73,141 motorcycle units in June 2024, which is lower by 5% as compared with 77,109 units in June 2023.

TVS Motor Company shed 0.66%. The company has recorded monthly sales of 333,646 units in June 2024 with a growth of 5% as against 316,411 units in the month of June 2023.

Hero MotoCorp slipped 0.86%. The two-wheeler major sold 5,03,448 units of motorcycles and scooters in June 2024, which is higher by 15.20% as compared with sales of 4,36,993 units recorded in June 2023.

Stocks in Spotlight:

Patanjali Foods fell 2.36%. Patanjali Foods announced its board`s approval to acquire Patanjali Ayurved`s non-food business for Rs 1,100 crore. The acquisition, structured as a going concern sale, will bring Patanjali Ayurved`s established dental care, skin care, home care, and hair care products under the Patanjali Foods umbrella. Additionally, a separate 20-year licensing agreement has been established, with Patanjali Foods paying a 3% turnover-based fee on gross sales (minimum Rs 83 crore annually) to Patanjali Ayurved for continued brand use.

Larsen & Toubro (L&T) advanced 2.74% after the company�s L&T Energy Hydrocarbon (LTEH) vertical secured a `significant� order from the Oil & Natural Gas Corporation (ONGC) for the eighth phase of pipeline replacement project.

NMDC declined 2.90% after the state-owned miner`s iron ore production declined by 3.16% to 3.37 million tonnes (MT) in June 2024 as against 3.48 MT produced in June 2023.

South Indian Bank slipped 1.74%. The private lender said that its gross advances jumped 11.35% to Rs 82,510 crore as of 30 June 2024 as against Rs 74,102 crore as of 30 June 2023.

DCX Systems zoomed 13.53% after the company bagged an order worth Rs 1,250 crore from Larsen and Toubro.

IOL Chemicals & Pharmaceuticals jumped 4.41% after China`s National Medical Products Administration (NMPA) approved the company`s Fenofibrate drug, used to treat high cholesterol and triglyceride levels in the blood. The NMPA`s green light paves the way for IOL Chemicals to export its Fenofibrate to the Chinese market.

CSB Bank added 1.47% after the bank`s total deposits jumped 22.24% to Rs 29,920 crore as on 30 June 2024 from Rs 24,476 crore as on 30 June 2023.

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