Sensex, Nifty Decline Dragged By Metals, Realty, Energy Stocks

India's stock benchmarks fell for the second consecutive session, dragged by losses in metals, energy, realty, information technology stocks, amid concerns over rising Covid-19 cases in China, hawkish comments from U.S. Federal Reserve Chair Jerome Powell and geopolitical concerns arising over of Russia-Ukraine war.

The Sensex shed over 600 points to 56,579.89. The30-stock gauge fell to an intraday low of 56,356.87. The Nifty declined by similar magnitude to close below 17,000. This is the first time the Nifty closed below 17,000 in over five weeks.

The index dropped to the lowest closing level since March 15. Coal India Ltd. had the largest drop, falling 6.8%. Today, 41 of 50 shares fell, while 9 rose

The broader indices underperformed their larger peers with both the S&P BSE MidCap and S&P BSE SmallCap losing nearly 2%. Barring S&P BSE Bankex, all the other 18 sectoral indices compiled by BSE Ltd. delined with S&P BSE Realty and Metal falling nearly 4%.

The market breadth was skewed in the favour of bears. About 1,048 stocks advanced, 2,481 declined and 145 remained unchanged.

Shares of Meghmani Finechem rose surged 16% to a record Rs 1,324 apiece.

The company reported growth in net profit, revenue and Ebitda in the quarter-ended March.

Q4FY2022 (Consolidated, YoY)

• Net profit up 175% at Rs 90.09 crore vs Rs 32.76 crore

• Revenue up 93% at Rs 498.80 crore vs Rs 258.55 crore

• Ebitda up 118% at Rs 175.11 crore vs Rs 80.39 crore

• Margin at 35.11% vs 31.09%

Trading volume is more than six times the 30-day average. The relative strength index of the stock is at 76, suggesting it may be overbought.

Source: Exchange filing, Bloomberg

• JSW Steel has denied it submitted a bid for acquisition of Pawan Hans.

• The company said it has no interest in the asset.

Source: Exchange filing

This is the steepest decline for 10-year yield in 19 months since September 2020.

• Rupee fell against the U.S. dollar. The Indian currency fell 0.37% to 76.77 during the session.

Source: Bloomberg

Shares of Ambuja Cements rose over 3.5% to a three-month high while ACC added 2.5%.

• The rise comes amid reports that Aditya Birla Group discussed financial options to prepare a bid for Holcim's India cement assets.

• Earlier, Bloomberg had reported that Holcim is weighing sale of Ambuja Cements on April 13, citing people familiar with the matter.

• Shares of Ambuja Cements added nearly 30% in April so far while ACC gained 6.39% over the same period.

• Holcim owns 63.19% in Ambuja and nearly 5% in ACC. Ambuja owns 50% in ACC.

Source: Bloomberg

Shares of Century Textiles & Industries jumped over 4%, the most in over two weeks.

• The company reported net profit of 86.07 crore in Q4 compared to loss of Rs 8.41 crore YoY. Revenue, Ebitda also rose while margin expanded to 10.3%.

Q4FY2021-22 (Consolidated, YoY)

• Net income at Rs 86.07crore vs loss of Rs 8.41 crore

• Revenue at Rs 1,210.7 crore vs Rs 839.39 crore

• Ebitda at Rs 125.38 crore vs Rs 75.2 crore

• Margin at 10.3% vs 9%

• The company recommended a dividend of Rs 4 per equity share of Rs 10 each.

Source: Exchange filing, Bloomberg

European markets decline amid Russia-Ukraine war, China Covid lockdown and hawkish comments by U.S. Federal Reserve Chair Jerome Powell.

Emmanuel Macron defeated Marine Le Pen to win second term as French President.

Shares of Religare Enterprises rose over 15%, the most in nearly four weeks.

• The company informed the exchanges on Sunday that it has resolved all legacy issues with SEBI pertaining to compliance requirements.

• Trading volume is 14 times the 30-day average. Share price rose above 50-day simple moving average, indicating potential upward price momentum.

Source: Exchange filing, Bloomberg

India's stock benchmarks declined, dragged by losses in metal, energy, fmcg, information technology, oil and gas and realty stocks, amid hawkish signals from U.S. Federal Reserve, Indonesia' ban on palm oil exports and concerns over demand after rising lockdowns in China.

The Sensex fell over 1% to nearly 56,550. The Nifty declined by similar magnitude and slipped below 17,000.

The broader indices underperformed their larger peers. Barring S&P BSE Bankex, all the other 18 sectoral indices compiled by BSE Ltd. declined, led by realty and metal stocks, losing 3%.

The market breadth is skewed in the favour of bears. About 938 stocks advanced, 2,460 declined and 146 remained unchanged.

• Rupee falls against the U.S. Dollar. The Indian Currency depreciated 0.37% to 76.77.

• 10-Year Bond Yield Sheds 10bps To 7.06% during the session.

Source: Bloomberg

Shares of Bharat Petroleum Corp Ltd. fell over 5.8%, the worst day in two months amid reports that the government has put the privatisation process on pause.

• In an interview to Moneycontrol, Chairman of Vedanta Resources Anil Agarwal was quoted as saying that the government has 'shelved' the BPCL privatisation offer.

• The government is yet to officially make a statement on the BPCL privatisation plan.

• Trading volume on the stock is more than twice the 30-day average.

Source: Moneycontrol, Bloomberg

Cyient expects its largest-ever acquisition to help expand its offerings and cut dependence on key aerospace clients.

The company signed definitive agreements to acquire Finland-based plant and product engineering services company Citec Group for $101 million to expand into Europe.

Source: Bloomberg

Shares of Future group stocks tumbled after the secured creditors of the group rejected a reorganisation scheme for merging their assets with Reliance Retail.

RIL also said it abandoned a plan to buy Future Group's retail assets amid legal challenges from Amazon.com.

Source: Exchange filing, Bloomberg

Shares of Godrej Agrovet rose nearly 9.5%, the most in three weeks amid Indonesia's ban on palm oil export.

• The Mumbai-based company is involved in agriculture with specialisation in palm oil plantations, crop protection, poultry processing among others. The company is a major local producer of palm oil.

• Trading volume is over 15 times the 30-day average at this time of the day.

• Of the 10 analysts tracking the company, six maintain 'buy', two suggest 'hold' and two recommend 'sell'. The overall consensus price of analysts tracked by Bloomberg implies an upside of 9.5%.

Source: Bloomberg

Shares of Tata Communications fell nearly 7.5%, the most in three months after the company reported net income for the fourth quarter that missed the average analyst estimate, post market hours on Thursday.

• The stock closed 3.74% lower on Friday.

• Analysts termed the Q4 performance a mixed bag and trimmed revenue estimates citing higher inflation.

• Trading volume was nearly thrice the 30-day average at this time of the day.

• Of the nine analysts tracking the company, seven maintain 'buy', one recommends 'hold' and one suggests 'sell'. The return potential on the stock is 24.6%.

Source: Bloomberg, Brokerage notes, Exchange filing.

TCS expands strategic partnership with SBI Cards to power the company's next leg of digital transformation.

• TCS has already helped SBI Card transform its core cards sourcing platform and digitized significant part of the process, ahead of SBI Card's IPO in 2020.

Source: Exchange filing

Most yields along the India sovereign yield curve fell, with 10-year bonds moving the most in Monday morning trading.

• The 2-year yield rose 0.9bps to 5.449%

• The 10-year yield fell 7bps to 7.097%

• The 14-year yield fell 5.7bps to 7.296%

• The 2-year-10-year yield spread was 164.8bps, vs previous close 172.7bps

Source: Bloomberg

• Zomato has 2.82 million shares change hands in a large trade.

• Details of buyers, sellers are not known immediately.

Source: Bloomberg

• Energy stocks fell as China's lockdowns amplify concerns that demand may wane.

• Metal stocks fall after iron ore futures in Singapore shed 12% amid fears over demand in China.

Source: Bloomberg

Shares of Tata Metaliks fell over 6.8%, the worst intraday decline in four days.

• The company reported YoY decline in net profit and EBITDA in quarter-ended March post market hours on Friday.

• Trading volume is nearly quadruple the 30-day average at this time of the day.

Source: Exchange filing, Bloomberg

Indian government bonds advanced amid demand from large corporates. The rupee dropped, tracking regional peers.

• 10-year yields fell 5bps to 7.12%.

• USD/INR climbed 0.2% to 76.6362.

Source: Bloomberg

Shares of Hindustan Zinc fell nearly 4.8%, the worst decline in seven weeks.

• The slide comes after the company reported net income below average analyst estimate during market hours on Friday.

• Analysts believe that FY23 guidance is disappointing and expect production cost to rise with increase in thermal coal prices.

• Trading volume on the stock is nearly 1.5 times the 30-day average at this time of the day.

Motilal Oswal

• Maintains 'neutral' and raised target price to Rs 370 from Rs 325; an implied return of 7.14%.

• Q4 results were in-line, but FY23 guidance disappoints.

• Revenue growth was driven entirely by rise in LME Zinc/Lead prices as metal sales volume remained flat.

• Company is primarily dependent on imported coal. With thermal coal prices rising, the cost of production is likely to increase further.

• Believes that growth may have been delayed due to delay in expansion of its mining operations.

• Slowdown in China is a key risk to zinc prices.

Systematix

• Maintains 'buy' with the target price raised to Rs 436 from Rs 385; an implied return of 26.25%.

• Q4 earings was below our estimate, due to low Zinc and Silver deliveries.

• High energy costs, inflation, supply chain disruptions have aided rise in global zinc prices.

• Raises FY23/24E Ebitda by 13%/12% in line with rise in price assumptions for Zinc.

Source: Brokerage notes, Bloomberg, Exchange filing

• Adani Power has 1.88 million shares change hands in a large trade.

• Details of buyers, sellers are not known immediately.

Source: Bloomberg

• SAIL has 2.55 million shares change hands in two large trades.

• Details of buyers, sellers are not known immediately.

Source: Bloomberg

India's stock benchmarks opened lower, dragged by broad-based losses across sectors. Metals, FMCG, energy, consumer durables' stocks declined. The fall comes amid strong tightening signals from U.S. Federal Reserve Chair and Indonesia's ban on palm oil exports

The S&P BSE Sensex shed 1.3% (nearly 750 points) to 56,449.84. The NSE Nifty 50 also declined by similar magnitude and fell below 17,000.

The broader indices almost mirrored their larger peers. All the 19 sectoral indices compiled by BSE Ltd. declined, with S&P BSE Realty, Metal and FMCG leading the fall.

The market breadth was skewed in the favour of bears. About 817 stocks advanced, 1,924 declined and 116 remained unchanged.

Senior executives of billionaire Kumar Mangalam Birla’s Aditya Birla Group have sought legal views and discussed financial options to prepare a bid for Holcim’s India cement assets, Economic Times reported citing people it didn’t identify.    

• A possible bid by Birla’s conglomerate, which owns India’s top cement maker UltraTech Cement Ltd., could trigger market dominance issue and that may lead to some divestment of its legacy assets, according to the report

• Birla’s group will compete with other suitors such as JSW Group and Adani Group if it joins the race, ET said.

Glenmark Pharmaceuticals has launched a novel FDC of Teneligliptin, with Pioglitazone.

• This is the only combination brand in India for adults with uncontrolled Type 2 diabetes.

• The drug has been launched under the brand name Zita Plus Pio.

• About 74 million adults suffer from diabetes in India, according to International Diabetes Federation. This figure is expected to increase to 125 million by 2045. About 77% of patients have uncontrolled diabetes.

Source: Exchange Filing

Indian bonds may decline as minutes of the central bank’s most recent meeting revealed a unanimous focus on tackling inflation among members of the monetary-policy panel, underlining the shift in RBI’s priorities from supporting growth.

• 10-year yields rose 2bps to 7.17% on Friday

• USD/INR climbed 0.4% to 76.4850.

• Global funds sell net Rs 2,460 crore of India Stocks Friday: NSE

• They bought Rs 20 crore of sovereign bonds under limits available to foreign investors, and withdrew Rs 787 crore of corporate debt

• State-run banks bought Rs 537 crore of sovereign bonds on April 22: CCIL data. Foreign banks sold Rs 1,300 crore of bonds.

Source: Bloomberg

• Cyient has signed definitive agreements to acquire Citec for about Rs 776.5 crore.

• Citec is an international plant and product engineering services firm with customers in energy, process, oil and gas, and manufacturing industries.

• The acquisition of Citec will be Cyient's largest acquisition to date and will be completed during the quarter.

• The acquisition is likely to strengthen Cyient's presence in energy industry and expand its European footprint.

Source: Exchange Filing

Prabhudas Lilladher

• World's largest producer/exporter of palm oil Indonesia has announced a ban on exports.

• Indonesia palm oil bank is a blow to economy after surge in oil prices due to Ukraine-Russia war.

• Palm oil, being a key ingredient in major food processing industries will hurt costs and margins in several consumer firms.

• Expects Britannia, Hindustan Unilever, Nestle India, ITC to be directly hit due to the ban.

• Impact due to the palm oil bank is likely to be seen in most categories.

• QSRs like Westlife Development and Burger King can also feel the pinch.

• Expects weak to sideways movement for select consumer stocks in the near term.

Morgan Stanley

• Indonesia's ban on export of palm oil could impact availability and lead to rising palm oil prices.

• Godrej Consumer Products, HUL and Britannia have the highest palm oil dependence in our coverage.

• 93% of India's total palm oil consumption was imported in 2021.

• Godrej Consumer, HUL, Britannia are likely to be the most adversely impacted stocks.

• Rise in palm oil prices could result in surge in other edible oil prices, implying downside risks to margins in an already high inflationary environment.

• Remains 'underweight' on Godrej Consumer and 'equal weight' on both HUL and Britannia.

Source: Prabhudas Lilladher note, Morgan Stanley note.

Lenders will seek insolvency of the Future Group after a plan to sell the retailing firm to Reliance Industries companies collapsed, the Economic Times reported citing three unidentified people familiar with the matter.

• There is a possibility of a debt recast offer by promoters to save the group from bankruptcy

• Total loans of the group companies were at about Rs 28,920 crore on Jan. 31

• Future Group didn’t respond to queries sent by the newspaper.

• Tata Elxsi cut to 'take profits' from 'buy on weakness' at Dalal & Broacha; price target set at Rs 6,356, implied return of -24%.

• L&T Technology raised to 'buy' from 'hold' at Dalal & Broacha; price target set at Rs 5,371, an implied return of 31%.

• Tata Power: Maybank Research initiated coverage of the stock with a recommendation of 'buy'; price target set at Rs 300, an implied return of 19%.

Source: Bloomberg

Asian energy-related shares may be in focus as China’s lockdowns amplify concerns demand will wane and prospects for aggressive U.S. interest-rate hikes weigh on sentiment.

• In Focus: Reliance Industries, HPCL, BPCL, ONGC, Oil India.

Source: Bloomberg

• Miners and steelmakers could be active after iron ore futures in Singapore drop as much as 12% on rising concerns over demand for the steel-making raw material in China.

• In Focus: Tata Steel, JSW Steel, Jindal Steel

Source: Bloomberg

• Century Textiles and Industries

• Eveready Industries

• Gujarat Mineral Development

• Mahindra CIE Automotive

• Tatva Chintan Pharma Chem

• Tata Investment

• Steel Exchange India

• Meghmani Finechem

• Maharashtra Scooters

• Reliance Industries: Says proposal to acquire certain assets of Mumbai-based Future Group "cannot be implemented" after Future Retail failed to win the approval of its secured creditors for the deal.

• HDFC Bank: Board approves dividend of Rs 15.5 per share

• ITC: Puri says value creation need will decide ITC’s demerger plans

• Tata Motors: Hikes passenger vehicle prices to offset cost rise

• Tata Steel: Tata’s Narendran: See higher steel prices this decade vs last; Sees strong demand for steel outside China

• Future Retail/Future Fashion/Future Lifestyle/Future Enterprise: Secured creditors of the companies rejected a reorganisation scheme merging the assets of these companies with Reliance Retail.

• Firstsource Solutions: The company will expand UK operations to create about 1,000 new jobs over the next 12 months.

• Varroc Engineering: The company has called media reports “speculative” that stated that the company will sell its lighting business for $650 million.

• Central Bank of India: Reserve Bank of India imposed a penalty of Rs 36 lakh on the bank for non-compliance Customer Protection–Limiting Liability of Customers in Unauthorised Electronic Banking Transactions.

• Torrent Power: To buy out Sunshakti Solar; EV: Rs 417 crore.

Tata Metaliks Q4 FY22 (Consolidated, YoY)

• Revenue up 22.25% at Rs 807.92 crore Vs Rs 660.87 crore

• EBITDA fell 60.23% at Rs 56.91 crore Vs Rs 143.1 crore

• EBITDA margin 7.04% Vs 21.65%

• Net profit fell 30% at Rs 52.46 crore Vs Rs 75 crore

• Recommended dividend of Rs 8 per share

Tejas Networks Q4 FY22 (Consolidated, QoQ)

• Revenue up 18.6% at Rs 126.5 crore Vs Rs 107.06 crore

• EBIT stood at a negative Rs 110 crore Vs negative Rs 48.52 crore

• EBIT margin -87% Vs -45%

• Net loss increased 104% at Rs 49.62 crore Vs Rs 24.3 crore

• Approved increase in authorized share capital from Rs 200 crore to Rs 260 crore

• Approved N. Ganapathy Subramaniam as Non-Executive Chairman after Balakrishnan V. stepped down.

MMTC Q2 FY22 (Consolidated, QoQ)

• Revenue fell 66.6% at Rs 1390.54 crore Vs Rs 4168.81 crore

• EBIT stood at negative Rs 29.01 crore Vs Rs negative Rs 28.73 crore

• EBIT margin -2.09% Vs -0.69%

• Net loss Rs 185.8 crore Vs Rs 81.85 crore

ICICI Bank Q4FY22 (Consolidated, YoY)

• Net Profit: Rs 7,018.71 crore vs Rs 4,402.61 crore (Bloomberg estimate of Rs 6,402.5 crore)

• NII: Rs 12,605 cr vs Rs 10,431 crore

• GNPA: 3.6% vs 4.13% (QoQ)

• NNPA: 0.76% vs 0.85% (QoQ)

Asian equities and U.S. Futures declined Monday as strong tightening signals from the U.S. Federal Reserve Chair Jerome Powell and European Central Bank undermine risk appetite.

Equities fell in Japan and South Korea, while futures edged lower earlier in Hong Kong. S&P 500 futures dropped while Nasdaq 100 futures also fell after the tech gauge look poised for the worst month since 2008.

The Singapore-traded SGX Nifty, an early barometer of India's benchmark Nifty 50, fell over 1% to 16,979 points as of 6:45 a.m.

Macron defeated far-right leader Marine Le Pen in the French presidential election on a pro-business platform, bolstering the euro.

Oil fell toward $100 a barrel -- after sliding for the third week in four -- as China lockdowns amplify demand fears. Bitcoin fell to $39,000.