Sensex, Nifty Decline For Fourth Week Dragged By Auto, Banking Stocks

India's stock benchmarks logged losses for the fourth consecutive week, dragged by losses in auto and banking stocks.

The S&P BSE Sensex and NSE Nifty 50 decline in three out of four sessions in the truncated week amid surge in crude prices and escalation of geopolitical tensions due to Russia's invasion of Ukraine

Auto and Banking stocks declined while metal and information technology stocks were the lone gainers.

On Friday's session, the S&P BSE Sensex fell 1.40% to 54,333.81. The 30-stock gauge fell 2.20% to an intraday low of 53,887.72. This is the first time the Sensex fell below 54,000 in intraday trade in seven months since Aug. 3, 2021.

The NSE Nifty 50 declined by similar magnitude to 16,245.35. The move was the biggest since falling 4.8% on Feb. 24. Titan Co. had the largest drop, falling 5.2%. Today, 40 of 50 shares fell, while 9 rose.

The broader indices underperformed their larger peers with S&P BSE MidCap rising over 2.3% and S&P BSE SmallCap adding 1.64%. All the 19 sectoral indices compiled by BSE Ltd. declined with S&P BSE Consumer Discretionary, Auto, Consumer Durables, Metal and Realty indices shedding over 3%.

The market breadth was skewed in the favour of bears. About 1,226 stocks advanced, 2,128 declined and 103 remained unchanged.

"Domestic equity markets closed lower as the geopolitical scenario continues to worsens due to the Russia-Ukraine crisis. Soaring crude prices due to supply disruptions from Russian sanctions have further escalated the situation", according to Mitul Shah. The Head of Research at Reliance Securities added that "the madness seen last week may have subsided, but the participants are still having anxiety attacks over the Ukraine issue. The average downside in Indian market is 16-17% in past few wars, while recovery was 23% in 3 months and 34% in 6 months. Now in Russia-Ukraine War, Nifty is down 11% from its peak of ~18,600. Even if we assume market recover by 20% by end of December 2022, we will get our year-end target of 20,000 on Nifty, which is based on 22x FY24 earnings".

"Investors are selling in droves and are simply following the trend in the world equity markets. The raging war between Russia & Ukraine has already made investors jittery about the near-term prospects. With commodity prices on the rise, corporates heavily dependent on commodities would have to battle rising prices and falling currency, which would impact their operating parameters going ahead", Amol Athawale, Deputy Vice President - Technical Research at Kotak Securities wrote in a note. He added, "for the traders, 16,350 -16,400 would be the immediate resistance level. Above the same, the index could move up to 16,550 and any further upside could lift the index up to 16,700. On the other side, as long as the index is trading below 16,350, the selling pressure is likely to continue. Below which, the correction wave will continue till 16,000-15,900".

GAIL will consider the recommendation for the payment of second interim dividend for financial year 2021-22 on March 11.

• Shares of GAIL India fell over 2.6%, the steepest intraday decline in over a week, after the announcement.

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

• Of the 35 analysts tracking the company, 34 maintain 'buy' and one recommends 'hold'. The overall consensus price of analysts tracked by Bloomberg implies an upside of 22.5%.

Source: Bloomberg, Exchange Filing

• India has lost 8.8 million jobs in 2022.

• Warn in Ukraine could have ripple effects on India's labour market.

• About 3.3 million jobs were lost in January while 5.5 million jobs were lost in February as agriculture sector shed workers.

• Expect a compounding effect of costlier oil on jobs in the next six to nine months.

Mahesh Vyas, Managing Director, Centre for Monitoring Indian Economy

Source: Bloomberg

• Endurance Technologies Ltd. fell for eighth straight day, on track for the longest losing streak in 23 months since April 3, 2020.

• Shares of Dr. Lal Pathlabs Ltd. declined for ninth straight day, on track for the longest losing streak in five years.

Source: Bloomberg

Reserve Bank of India acted as per domestic growth-inflation dynamics while other central banks pursued divergent paths to normalisation, Govenor Shaktikanta Das said in a speech Friday.

• Geopolitical tensions have aggravated challenges as central banks risk recession if they act aggressively.

• Alternatively central banks could be blamed for 'falling behind the curve' if they act late.

• We have confined our asset purchase programme to central and state government securities.

• RBI has not diluted its collateral standards in our lending operations.

• RBI used flexible inflation targeting framework without compromising on price stability.

Source: Bloomberg

Russian forces have occupied the site of Europe's largest nuclear power plant, after an overnight fire that Ukraine government accused Russian military of causing by shelling in the area.

• The personnel at the nuclear power plant in Zaporizhzhia were monitoring the state of power units and ensuring the maintenance of safety protocols.

• Both houses of Russia's parliament are sitting on Friday, witha specially convened meeting of the Federation Council.

Source: Bloomberg

• According to Bank of Russia's decision, Moscow Exchange won't conduct trading and settlements across all markets on March 5,7 and 8.

• March 6 is a national holiday in Russia

Source: Bloomberg

India's stock benchmarks recovered from day's low, but declined, on course to track to extend losing streak for the fourth week. The fall comes as global equities tumbled amid escalation of Russia's invasion of Ukraine and the surge in crude oil prices.

The S&P BSE Sensex shed nearly 800 points (1.44%) to 54,309.52. The 30-stock gauge fell 2.20% to an intraday low of 53,887.72. Sensex fell below 54,000 for the first time in seven months. The NSE Nifty 50 also declined by similar magnitude to 16,257.45. Nifty fell 2.21% to an intraday low of 16,133.80.

The S&P BSE Midcap outperformed Sensex and Nifty with over 2% losses while S&P BSE SmallCap almost mirrored its larger peers.Barring S&P BSE Information Technology, all the other 18 sectoral indices compiled by BSE Ltd. declined with S&P BSE Auto and Consumer Durables leading the losses.

The market breadth was skewed in the favour of bears. About 1,041 stocks advanced, 2,158 declined and 128 remained unchanged.

Russian shelling briefly ignited a fire at Europe's largest nuclear power plant in eastern Ukraine early on Friday.

• Ukraine officials said that they have extinguished the blaze at a training complex in Zaporizhzhia plant. The plant accounts for 20% of Ukraine's electricity.

• Ukraine informed International Atomic Energy Agency that the incident has not affected essential equipment.

• No change in radiation levels have been reported.

Source: Bloomberg

• Jalan Kalrock Consortium appoints former Vistara and SpiceJet executive, Sanjiv Kapoor as Jet Airways CEO.

• Kapoor to join Jet Airways as CEO from April 4, 2022

• Sanjiv Kapoor is currently President of Oberoi Hotels & Resorts

Source: Press statement

Shares of UPL Ltd. rose over 3% in intraday trade. The stock has added over 5% in the last two days.

• According to a Bloomberg Exclusive on Thursday, UPL attracted takeover interest from several global competitors.

• The agrochemical producer was evaluating interest from rivals in crop protection industry, the report cited people with knowledge of the matter.

• Trading value is nearly five times the 30-day average volume for this time of the day.

• Of the 31 analysts tracking the company, 27 maintain 'buy', two recommend 'hold' and two suggest 'sell'. The overall consensus price of analysts tracked by Bloomberg implies an upside of 31.7%.

Source: Bloomberg

Most maturities along the India sovereign yield curve were little changed, while 10-year yields fell in Friday morning trading.

• The 4-year yield fell 1.3bps to 6.027%

• The 10-year yield fell 1.7bps to 6.809%

• The 19-year yield remained unchanged at 7.059%

• The 4-year-10-year yield spread was 78.2bps, vs previous close 78.6bps

Source: Bloomberg

Shares of Hindustan Unilever Ltd. fell over 5% to a 52-week low of Rs 1,983 apiece.

• This is the lowest level for the stock in 22 months since May 26, 2020.

• Trading volume was 3.5 times the 30-day average volume at this time of the day.

• Relative strength index on the stock was at 21, suggesting it may be oversold.

• Of the 39 analysts tracking the company, 33 maintain 'buy', four suggest 'hold' and two recommend 'sell'. The overall consensus price of analysts tracked by Bloomberg implies an upside of 38.6%.

Source: Bloomberg

Shares of Asian Paints fell over 7.25% to near 52-week low. The stock has lost over 15% over the last three sessions.

• Trading volume on the stock was nearly 7.5 times the 30-day average volume at this time of the day.

• The relative strength index on the stock was at 23, suggesting it may be oversold.

• Of the 41 analysts tracking the company, 19 maintain 'buy', nine suggest 'hold' and 13 recommend 'sell'. The overall consensus price of analysts tracked by Bloomberg implies an upside of 27.6%.

Paint stocks have been under pressure due to the surge in crude oil prices, a key raw material for paint companies

Source: Bloomberg

• Services PMI rises to 51.8 in February from 51.5 in January.

Source: IHS Markit

Rupee depreciates 0.23% to 76.0813 against the U.S. dollar. Rupee breached 76.0000 levels for the first time in nearly 10 weeks since December 20, 2021.

• Civil Authority of Singapore will extend VTLs to more cities in Malaysia, Indonesia and India.

• VTLs for India will extend beyond Chennai, Delhi and Mumbai to include all Indian cities.

• Singapore will also launch VTLs from two new countris: Greece and Vietnam.

Source: Bloomberg

India's automakers retailed 13.7 lakh vehicles in February, down 9.2% YoY compared to 15.1 lakh a year earlier, according to data released by Federation of Automobile Dealers Associations.

• Passenger vehicle retails in February fell 7.8% YoY to 2,38,096 units

• Commercial vehicle retails rose 7.4% YoY to 63,797 units

• Scooters and motorcycles fall 10.7% YoY to 9,83,358 units.

• Tractors fall 18.9% YoY to 50,304 units

Near term outlook

• With omicron cases receding without causing a marked adverse impact, the sector was at the cusp of recovery. But the Russian invasion of Ukraine will have ripple effects on the global automobile supply chain.

• Russia is one of the largest producers of rare-earth metals like Palladium, an essential metal for semi-conductors while Ukraine is among the biggest producers and exporters of Neon Gas, used in the manufacturing of semiconductors. The ongoing war could trigger further shortage in semi-conductors.

• Government will be unable to hold prices of petroleum products for long with crude soaring above $110 per barrel.

• Expect oil marketing companies to increase fuel prices by at least Rs 10-15.

• Rise in fuel prices will be an obstacle for 2-wheeler sales.

• Downgrades near-term outlook to 'negative' from 'neutral' till the time Russia-Ukraine conflict reached a conclusion.

Source: Press Release

Shares of automakers and component suppliers fell amid concerns about supply-chain pressures worsening due to Russia's invasion of Ukraine.

India's stock benchmarks tumbled amid a decline in global equities after a fire broke out at major nuclear power plant in Ukraine following shelling by Russian troops. Banking and auto stocks declined while metal stocks rose amid the rise in base metal prices.

The S&P BSE Sensex shed 700 points to 54.395.62. The NSE Nifty 50 declined 1.27% to 16,289.20.

The broader markets underperformed their larger peers with both S&P BSE MidCap and S&P BSE SmallCap losing 0.75%. Barring S&P BSE Metal index, all the other 18 sectoral indices compiled by BSE Ltd. fell with S&P BSE Auto shedding over 2% and S&P BSE Bankex declining nearly 2%.

The market breadth was skewed in the favour of bears. About 747 stocks advanced,1,491 declined and 85 remained unchanged.

The Indian rupee is poised to decline for a second straight week as investors flee risk assets after Ukrainian officials said that Russia had attacked Europe’s biggest nuclear plant

• USD/INR rose 0.3% to 75.9100 on Thursday; pair is up 0.8% on the week after rising by a similar margin in the previous week

• 10-year yields rose 1bp to 6.83% and is up ~8bps on the week

• Global funds sell net Rs 6,640 crore of India stocks Thursday: NSE

• They sold Rs 140 crore of sovereign bonds under limits available to foreign investors, and withdrew Rs 617 crore of corporate debt

• State-run banks bought Rs 957 crore of sovereign bonds on March 3: CCIL data. Foreign banks sold Rs 527 crore of bonds.

Source: Bloomberg

Shares of Indian automakers may fall like their U.S. counterparts amid rising concerns about supply-chain pressures due to the Ukraine war.

• In Focus: Tata Motors, Maruti Suzuki, Mahindra & Mahindra, Ashok Leyland.

• Also In Focus: Component suppliers like Motherson Sumi, Bosch, Sona BLS, Bharat Forge, Tube Investments, Minda Industries, Wabco India, Suprajit Engineering, Mahindra CIE.

Source: Bloomberg

• Vodafone Idea: Approved issuance of upto 3,38,34,58,645 equity shares of face value of Rs 10 each at a price of Rs 13.30 per equity share, for up to Rs 4,500 crore. The shares will be issued to Euro Pacific Securities, Prime Metals, Oriana Investments on a preference basis. The issue price is at a 10% premium to the floor price of Rs 12.08.

  The company also approve the issuance of equity shares or securities convertible into equity shares, global depository receipts, ADR foreign currency convertible debentures, warrants up to Rs 10,000 crore by way of private placement, QIP or through other permissible mode in one or more tranches.

  The board has convened extraordinary general meeting on March 26, to get the approval of shareholders.

• SJVN: The company will receive loan of Rs 1,537 crore from SBI and Rs 319.04 crore from Punjab National Bank for Luhri-1 Hydro Electric Project in Himachal Pradesh and Parasaran Solar Power Project in Uttar Pradesh, respectively.

• Vedanta: Societe Generale sells 22.45 million shares of Vedanta: NSE

• LT Foods: The company acquired 51% stake in Golden Star Trading Inc. through its subsidiary LT Foods America Inc. with a call option to acquire 49% stake after 3 years. It didn’t disclose the consideration for the acquisition.

• HDFC: The bank has partnered with NSE for Unsponsored Depository Receipts (NSE IFSC Receipts) that will enable Indian retail investors to invest in the US Stocks, listed on exchanges like NYSE and Nasdaq.

• PTC: SEBI has denied permission to hold board meeting without an independent director.

• Themis Medicare: The company has received approval for its antiviral drug VIRALEX for treatment of Covid-19 from DCGI.

• IndiaMart: The company has entered into an agreement to invest Rs 17.01 crore in Zimyo for 10% stake.

• Uttam Sugar: The company has redeemed 1,32,300 6.5% Non-Cumulative Redeemable Preference Share of Rs 100 each.

• Varun Beverages: The company has elevated Varun Jaipuria as Executive Vice Chairman.

• EIH: The company approved sale of EIH’s press unit located in Manesar, Haryana for Rs 94.5 crore.

• Gujarat Alkalies: The company has received a patent by the United States Patent and Trademark Office for process for production of hydrazine hydrate.

• KEC: The company won secured new orders of Rs. 1,131 crores across its various businesses.

• John Cockerill: The company received an order worth Rs 1,100 crore from ArcelorMittal Nippon Steel India for supply of two new steel processing lines to be installed at the client’s Hazira Works.