Domestic equity barometers tanked on Wednesday, sliding for the second consecutive trading session. The Nifty 50 index held the 19,900 level, reversing from the day's high of 20,050.65 in early trade. All the sectoral indices on the NSE ended in the red with metal, financial services and bank stocks declining the most. This downward movement was driven by substantial selling in market heavyweights like HDFC Bank and Reliance Industries, as well as lackluster global cues ahead of the upcoming FOMC meeting. Additionally, factors such as the increasing US bond yields, rising crude oil prices, the weakening of the rupee, and selling by foreign institutional investors also contributed to investor concerns.
The barometer index, the S&P BSE Sensex dropped 796 points or 1.18% to 66,800.84. The Nifty 50 index lost 231.90 points or 1.15% to 19,901.40.
In the broader market, the S&P BSE Mid-Cap index declined 0.33% while the S&P BSE Small-Cap index slipped 0.51%.
The market breadth was negative. On the BSE, 1,476 shares rose and 2,207 shares fell. A total of 120 shares were unchanged.
The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, advanced 2.69% to 11.13.
Meanwhile, the strained relationship between India and Canada escalated with India issuing a travel advisory, advising its citizens to avoid certain parts of Canada. This diplomatic tension was triggered by an allegation that New Delhi was implicated in the killing of a Sikh separatist near Vancouver.
Economy:
India's net FDI declined from $17.3 billion in April July 2022 to $5.7 billion in April-July 2023 on account of moderating gross FDI and a rise in repatriation.
Despite weakening global prospects, the Indian economy is displaying resilience led by private consumption, fixed investment and robust public sector capital expenditure, as per RBI Bulletin's 'State of the Economy' article.
The Asian Development Bank trimmed its annual growth forecast for several countries in Asia because of China's property crisis and climate related risks. China is expected to grow by 4.9% in 2023, down from an earlier forecast of 5%. India is still projected to be among the region's best performers with a forecasted growth rate of 6.3% (down from 6.4%).
Numbers to track:
The yield on India's 10-year benchmark federal paper rose 0.06% to 7.153 from previous close of 7.149.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 83.1400, compared with its close of 83.3200 during the previous trading session.
MCX Gold futures for 5 October 2023 settlement declined 0.18% to Rs 59,174.
The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.19% to 105.00.
The United States 10-year bond yield fell 0.55% to 4.343.
In the commodities market, Brent crude for November 2023 settlement slipped $1.48 or 1.57% to $93.44 a barrel.
Global Markets:
Markets in Europe advanced on Wednesday, fueled by a decrease in UK inflation and anticipation for the US Federal Reserve's monetary policy decision. UK consumer inflation rose 0.3% in August, but the year-on-year figure unexpectedly fell to 6.7% from 6.8% in July.
Asian stocks ended on a mixed note as China opted to keep its one-year and five-year loan prime rates unchanged at 3.45% and 4.2% respectively. Traders are awaiting the Bank of Japan's monetary policy meeting, hoping for clarity on when the bank will shift its ultra-easy monetary policy. Additionally, the People's Bank of China is expected to announce its loan prime rate decisions on Friday.
US stocks closed lower on Tuesday ahead of the Federal Reserve's decision. The Fed began its two-day policy meeting and will reveal its interest rate decision on Thursday. While it is widely anticipated that rates will remain steady, investors will closely analyze the summary of economic projections and Fed chair Jerome Powell's press conference for insights into future developments.
Stocks in Spotlight:
Index heavyweight Reliance Industries (RIL) fell 2.21%, triggered by huge volumes as a large block deal took place on the exchanges today.
Another index major HDFC Bank slumped 4% after the country's top private lender said its newly completed merger with HDFC would hit some key financial metrics. The bank has said it expects some pressure on its net interest margins (NIM) and forecast a rise in non-performing assets (NPA), according to analyst reports following a meet with HDFC Bank's management held early in the week. The two companies merged effective July 1, creating a $40 billion behemoth.
The bank held analysts meet on Monday (Sept 18) where it indicated that its gross non-performing asset ratio is likely to increase to 1.4% as of July 1st, compared to 1.2% as of June 30th. In a presentation, the bank also noted that the net NPA ratio will rise to 0.4%, from 0.3% at the end of the first quarter. The rise in bad loans is owing to HDFC's non-retail housing loan portfolio where the gross bad loans are at 6.7% as of July 1st.
Meanwhile, the Reserve Bank of India (RBI) approved the re-appointment of Sashidhar Jagdishan as the managing director and chief executive officer of the bank for a period of three years with effect from 27 October 2023 to 26 October 2026.
Tata Motors shed 0.36%. The company announced that it will increase prices of its vehicles, effective 1 October 2023, up to 3%. The price increase is to offset the residual impact of the past input costs, and will be applicable across the entire range of commercial vehicles.
Adani Green Energy shed 0.79%. The power generation company announced that its board has approved the execution of a binding termsheet between the company, Adani Green Energy Twenty Three (AGE23L) and TotalEnergies SE (Total).
The company said that the purpose of a binding termsheet is to provide for further investment by Total (either directly or through its affiliates) of $300 million to form a new 50:50 joint venture (JV) company with the company and modify certain terms of its investment in AGE23L.
Blue Star surged 13.38%. The company announced that its board approved the opening of qualified institutional placement (QIP) of equity shares with the floor price of Rs 784.55 per share.
Power Grid Corporation of India gained 2.32%. The company said that a meeting of its board is scheduled to be held on 25 September 2023 to consider issue of non-convertible bonds under private placement.
SJVN jumped 6.78% after the company announced that it has signed a memorandum of understanding (MoU) with PFC for financial assistance to various diversified portfolio of projects.
Prakash Industries rallied 6.64%. The company said that subsequent to the In-principle Stage-I approval under the Forest (Conservation) Act, 1980, the Ministry of Environment, Forest and Climate Change, Government of India has granted Environmental Clearance (EC) for its Bhaskarpara Commercial Coal Mine in Chhattisgarh.
Aurobindo Pharma declined 0.58%. The pharmaceutical company announced that it has received a Form 483 from the United States Food and Drug Administration (US FDA) following an inspection of Unit IV formulation manufacturing facility situated Menakuru Village in Andhra Pradesh, from 13 to 19 September 2023. The Form 483 issued to its wholly owned subsidiary, APL Healthcare lists one observation.
Caplin Point Laboratories fell 1.74%. The drug maker informed that Caplin Steriles has been granted final approval from the United States Food and Drug Administration (US FDA) for its abbreviated new drug application (ANDA) Norepinephrine Bitartrate injection. The said drug is used for restoration of blood pressure in adult patients with acute hypotensive states.
New Listing:
Shares of R R Kabel closed at Rs 1,196.65 on the BSE, representing a premium of 15.62% as compared with the issue price of Rs 1,035.
The scrip was listed at Rs 1,179, exhibiting a premium of 13.91% to the issue price.
The stock has hit a high of 1,212.80 and a low of 1,137.60. On the BSE, over 8.84 lakh shares of the company were traded in the counter.
IPO Update:
The initial public offer (IPO) of Yatra Online received bids for 4.98 crore shares as against 3.09 crore shares on offer, according to stock exchange data at 17:00 IST on Wednesday (20 September 2023). The issue was subscribed 1.61 times.
The issue opened for bidding on Friday (15 September 2023) and it will close on Wednesday (20 September 2023). The price band of the IPO is fixed at Rs 135-142 per share. An investor can bid for a minimum of 105 equity shares and in multiples thereof.
The initial public offer (IPO) of Signatureglobal (India) received bids for 60.34 lakh shares as against 1.12 crore shares on offer, according to stock exchange data at 17:00 IST on Wednesday (20 September 2023). The issue was subscribed 54%.
The issue opened for bidding on Wednesday (20 September 2023) and it will close on Friday (22 September 2023). The price band of the IPO is fixed at Rs 366-385 per share. An investor can bid for a minimum of 38 equity shares and in multiples thereof.
The initial public offer (IPO) of Sai Silks (Kalamandir) received bids for 26.16 lakh shares as against 3.84 crore shares on offer, according to stock exchange data at 17:00 IST on Wednesday (20 September 2023). The issue was subscribed 7%.
The issue opened for bidding on Wednesday (20 September 2023) and it will close on Friday (22 September 2023). The price band of the IPO is fixed at Rs 210-222 per share. An investor can bid for a minimum of 67 equity shares and in multiples thereof.
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