Market retreats after winning streak: IT, FMCG pull back

The domestic stock market closed slightly lower on Tuesday after a four-day winning streak. IT and FMCG stocks led the decline while PSU banks, auto and oil & gas stocks bucked the trend. The Nifty 50 index failed to hold above 22,400. Investors remained cautious due to upcoming events: Federal Reserve Chair`s testimony and key U.S. jobs data. The Chinese National People`s Congress is also being closely monitored as potential economic reforms in China could impact global markets.

The barometer index, the S&P BSE Sensex, was down 195.16 points or 0.26% to 73,677.13. The Nifty 50 index declined 49.30 points or 0.22% to 22,356.30.

In the broader market, the S&P BSE Mid-Cap index shed 0.17% and the S&P BSE Small-Cap index slipped 0.63%.

The market breadth was weak. On the BSE, 1,212 shares rose and 2,640 shares fell. A total of 81 shares were unchanged.

The NSE`s India VIX, a gauge of the market`s expectation of volatility over the near term, dropped 3.63% to 14.38.

Economy:

The Indian service sector continued to expand in February, though at a slightly slower pace than January. The HSBC India Services Business Activity Index registered 60.6, down from 61.8 in January. This is still well above the 50 mark which indicates expansion, and is the strongest growth in the service sector since December 2005.

Manufacturing also grew in February, contributing to an overall increase in private sector output. The HSBC India Composite PMI Output Index slipped from a six-month high of 61.2 in January to 60.6, indicating a softer but sharp rate of expansion.

Numbers to Track:

The yield on India`s 10-year benchmark federal paper shed 0.03% to 7.058 as compared with previous close 7.060.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 82.8950, compared with its close of 82.9000 during the previous trading session.

MCX Gold futures for 5 April 2024 settlement rose 0.43% to Rs 64,741.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was up 0.02% to 103.86.

The United States 10-year bond yield fell 0.69% to 4.193.

In the commodities market, Brent crude for May 2024 settlement declined 20 cents or 0.24% to $82.60 a barrel.

Global Markets:

Shares in Europe and Asia were mixed on Tuesday as investors were unimpressed by China`s economic plans announced during its "Two Sessions" meeting. China set a GDP growth target of 5% for 2024 and inflation around 3%.

US stocks closed lower on Monday, likely due to profit-taking ahead of key economic data and Fed Chair Jerome Powell`s testimony.

Investors are waiting for Powell`s testimony before Congress this week, where he`s expected to reiterate the Fed`s stance on keeping interest rates steady.

Stocks in Spotlight:

IIFL Finance hit a lower limit of 20% after the RBI barred the company from sanctioning, disbursing new gold loans, citing "material supervisory concerns". The Reserve Bank of India (RBI) has imposed a business restriction on IIFL Finance, effective 4 March 2024. This restriction prohibits IIFL Finance from issuing new gold loans or selling existing ones. The action stems from concerns identified during a recent RBI inspection of IIFL`s gold loan portfolio.

Infibeam Avenues rallied 5.61% after the company announced that it has received final authorisation from Reserve Bank of India (RBI) to operate as an online payment aggregator.

Westlife Foodworld surged 7.77% after firm announced that the Food Safety and Standards Authority of India (FSSAI) verified that McDonald`s India uses 100% real cheese.

Star Housing Finance advanced 1.77% after the company announced that it board will meet on Saturday, 9 March 2024 to raise funds through issuance of non-convertible debentures on private placement basis.

Kalpataru Projects International (KPIL) rose 0.46%. The company announced that it has received letter of intent (LoI) from Aramco for carrying out EPC work for the Master Gas System Network (MGS‐3) in Saudi Arabia.

Garden Reach Shipbuilders & Engineers (GRSE) gained 2.05% after the company said that it has signed a memorandum of understanding with the Indian Register of Shipping (IRS) to develop green energy and autonomous vessels.

Indian Energy Exchange (IEX) declined 2.44%. The company informed that it has achieved 9,462 million units (MU) overall volume in February 2024, registering a growth of 15.4% YoY basis.

Star Cement rose 1%. The company informed that CRISIL Ratings has assigned its `CRISIL A1+� rating to the short-term bank facilities of the company.

Strides Pharma Science advanced 1.51% after its step‐down wholly owned subsidiary, Strides Pharma Global Pte. Singapore received approval from the United States Food & Drug Administration (USFDA) for Gabapentin tablets.

Power Mech Projects (PMPL) fell 0.24%. The company informed that it has received multiple orders aggregating to Rs 658.57 crore.

IPO Update:

The initial public offer (IPO) of J G Chemicals received 2,00,55,244 bids for shares as against 81,68,714 shares on offer, according to stock exchange data at 17:00 IST on Tuesday (5 March 2024). The issue was subscribed 2.46 times.

The issue opened for bidding on Tuesday (5 March 2024) and it will close on Thursday (7 March 2024). The price band of the IPO is fixed at Rs 210 to 221 per share. An investor can bid for a minimum of 67 equity shares and in multiples thereof.

R K Swamy`s IPO received 4,94,64,550 bids for shares as against 82,32,946 shares on offer, according to stock exchange data at 17:00 IST on Tuesday (5 March 2024). The issue was subscribed 6.01 times.

The issue opened for bidding on Monday (4 March 2024) and it will close on Wednesday (6 March 2024). The price band of the IPO is fixed at Rs 270 to 288 per share. An investor can bid for a minimum of 150 equity shares and in multiples thereof.

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