Weak global cues drive Indian stocks lower; banks drag

The domestic stock market witnessed a tumultuous session on Tuesday, with selling pressure prevailing in most sectors, leading to a decline in the benchmark indices. Initially, there was some positive momentum, but the indices quickly reversed course and continued to move downwards. The negative trend was driven by weak Asian market cues and a sell-off in banking, auto, and IT stocks. Sustained selling by foreign institutional investors has weighed on the local markets in recent weeks. Notably, the Nifty faced resistance in the 19,160-19,220 range, resulting in a close with a negative bias. In the broader market, realty, media and consumer durables shares were in demand.

The Sensex wrapped up the day 237.72 points lower, representing a 0.37% decrease, settling at 63,874.93. Similarly, the Nifty 50 experienced a slide of 61.30 points, or 0.32%, ending at 19,079.60.

ICICI Bank (down 1.01%), Reliance Industries (down 0.99%) and HDFC Bank (down 0.55%) were major drags.

The broader market outperformed the key indices. The S&P BSE Mid-Cap index gained 0.29% while the S&P BSE Small-Cap index added 0.02%.

The market breadth was positive. On the BSE, 1,836 shares rose and 1,798 shares fell. A total of 126 shares were unchanged.

Economy:

In the first half of the current financial year, India`s fiscal deficit reached 39.3% of the full-year target, slightly higher than the 37.3% recorded in the previous year. By the end of September 2023, the fiscal deficit amounted to Rs 7.02 lakh crore, according to data from the Controller General of Accounts (CGA). Tax revenue reached Rs 11.60 lakh crore, accounting for 49.8% of the annual target. From April to September 2022-23, net tax collection amounted to 52.3% of the year`s annual Budget Estimate (BE). The total expenditure by the central government was Rs 21.19 lakh crore, representing 47.1% of the BE for 2023-24, slightly higher than the 46.2% of the BE for 2022-23.

Numbers to Watch:

The yield on India`s 10-year benchmark federal paper shed 0.26% to 7.35 from its previous close of 7.369.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 83.2575, compared with its close of 83.2650 during the previous trading session.

MCX Gold futures for 5 December 2023 settlement rose 0.01% to Rs 61,287.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was down 0.13% to 105.98.

The United States 10-year bond yield declined 1.04% to 4.828.

In the commodities market, Brent crude for December 2023 settlement gained 90 cents or 1.03% to $88.35 a barrel.

Global Markets:

The Dow Jones index futures were up 130 points, indicating a positive opening in the US stocks today.

Markets in Europe advanced as inflation across the euro zone dropped to a two-year low of 2.9% in October, according to preliminary data released on Tuesday, down from 4.3% the previous month. Core inflation, which excludes volatile food and energy prices, dropped to 4.2% year on year in October from 4.5% in September.

French GDP grew 0.1% on the quarter, data showed earlier Tuesday, showing annual growth of 0.7%, while German retail sales slumped 0.8% on the month in September, an annual drop of 4.3%.

Asian stocks ended mixed on Tuesday as sentiment was hit by weaker than expected Chinese purchasing managers� indices. China�s official manufacturing purchasing managers` index fell to 49.5 in October from 50.2, dipping back below the 50-point level demarcating contraction from expansion.

China`s non-manufacturing PMI also fell to 50.6 last from 51.7 in September, indicating a slowdown in activity in the vast service sector and construction.

In a separate development, the Bank of Japan held interest rates at ultra-low levels and slightly altered the rhetoric around its yield curve control policy, saying it will use the upper end of its YCC band, a range of (-1)% to 1%, as a reference cap for its market operations.

US stocks rallied on Monday as traders started a big week filled with a Federal Reserve rate decision, employment report and Apple�s earnings.

Stocks in Spotlight:

Siemens dropped 2.92% following reports that Siemens Energy AG is contemplating selling a significant portion of its 24% stake in an Indian affiliate to former parent Siemens AG.

Siemens AG currently holds a 51% stake in Siemens, while the total promoter shareholding of Siemens stands at 75%.

Rainbow Children`s Medicare dropped 6.23% after the company reported muted Q2 numbers. Its consolidated net profit rose 2.91% to Rs 62.91 crore while net sales rose 6.27% to Rs 332.68 crore in Q2 September 2023 over Q2 September 2022.

"The current quarter, Q2 FY24, differs significantly from the same period last year due to the distinctive circumstances of Q2 FY23. In Q2 FY23, which marked the first year of post-COVID-19 normalcy, many children experienced acute pneumonia as they transitioned out of a protective environment after approximately two years. In that context, the current quarter has demonstrated a noteworthy level of resilience, which the company believes is likely to be more sustainable in the long term," Rainbow Children`s Medicare said in its release.

TVS Motor Company shed 1.18%. The company has recorded 32% growth in net profit to Rs 537 crore in Q2 FY24 from Rs 408 crore in Q2 FY23. During the quarter, the company�s operating revenue grew by 13% to Rs 8,145 crore as against Rs 7,219 crore in Q2 of last year.

DLF gained 1.74%. The company reported consolidated net profit of Rs 621.89 crore in Q2 FY24 from Rs 477.20 crore in Q2 FY23. Total income rose to Rs 1476.42 crore as against Rs 1360.30 crore in Q2 of last year.

Marico added 0.86%.The FMCG major reported 17.26% consolidated net profit of Rs 360 crore in Q2 FY24 from Rs 307 crore in Q2 FY23 recording the growth of 17.26%. Revenue from operations declined 0.8% to Rs 2,476 crore in Q2 FY24 as against Rs 2,496 crore in Q2FY23, with underlying volume growth of 3% in the domestic business and constant currency growth of 13% in the international business.

Larsen & Toubro (L&T) rose 0.09%. The EPC major announced that its hydrocarbon business, L&T Energy Hydrocarbon (LTEH) has secured Letter of Intent (LoI) for Ultra-Mega onshore project from a client in the Middle East for a Gas Compression plant. As per Larsen & Toubro`s (L&T) classification, the value of the �Ultra Mega` project is more than Rs 15,000 crore.

Procter & Gamble Hygiene & Health Care rallied 4.70%. The company has recorded a profit after tax (PAT) of Rs 211 crore for the quarter ended on 30 September 2023, up 36% versus year ago led by acceleration of volume growth coupled with product price-mix and productivity. The company�s PAT for the same period last year was Rs 154 crore. During the quarter, the company delivered sales of Rs 1,138 crore, up 9% from Rs 1,045 crore recorded in the year ago period.

APL Apollo Tubes slipped 2.39%. The company has reported 35% rise in consolidated net profit to Rs 202.9 crore in Q2 FY24 from Rs 150.2 crore in Q2 FY23. Net revenue increased by 17% year-over-year to Rs 4,630.4 crore during the period under review. Sales volume for the second quarter was 675 thousand tons as compared with 602 thousand tons recorded in the corresponding period last year, up 12% YoY.

Castrol India declined 1.98%. The company reported 4% rise in net profit to Rs 194.42 crore in the third quarter ended 30 September 2023 from Rs 187.17 crore recorded in the same period last year. For the quarter from July to September 2023, the company registered a 6% year-on-year increase in revenue from operations, growing to Rs 1,183 crore from Rs 1,121 crore in 3Q 2022.

Spandana Sphoorty Financial fell 1.81%. The company has reported 127% jump in consolidated net profit to Rs 125 crore in Q2 FY24 from Rs 55 crore in Q2 FY23. Total income from operations increased 105% year-over-year to Rs 610 crore during the period under review. Net interest margin for Q2 FY24 was 14.1% as compared with 13% in Q2 FY23.

Blue Star gained 0.49% after the company�s consolidated net profit stood at Rs 70.77 crore in Q2 FY24, recording the growth 65.97% as compared with Rs 42.64 crore posted in Q2 FY23. Revenue from operations increased by 19.47% to Rs 1,890.40 crore for the second quarter ended 30 September 2023 as compared to Rs 1,582.29 crore during the same period the previous year.

IPO Update:

The initial public offer (IPO) of Honasa Consumer, parent of Mamaearth, received bids for 36,07,182 shares as against 2,88,99,514 shares on offer, according to stock exchange data at 17:00 IST on Tuesday (31 October 2023). The issue was subscribed 12%.

The issue opened for bidding on Tuesday (31 October 2023) and it will close on Thursday (2 November 2023). The price band of the IPO is fixed at Rs 308-324 per share. An investor can bid for a minimum of 46 equity shares and in multiples thereof.

Cello World`s IPO received bids for 3,16,67,573 shares as against 2,20,61,947 shares on offer, according to stock exchange data at 17:00 IST on Tuesday (31 October 2023). The issue was subscribed 1.44 times.

The issue opened for bidding on Monday (30 October 2023) and it will close on Wednesday (1 November 2023). The price band of the IPO is fixed at Rs 617-648 per share. An investor can bid for a minimum of 23 equity shares and in multiples thereof.

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