Sensex, Nifty Snap Two-Day Winning Streak As Metals, Lenders Drag
India equity benchmarks snapped a two-day winning streak as investors weighed declining coronavirus infections in the nation against the impact of global inflationary pressures and fund outflows.
The S&P BSE Sensex fell 0.6% to 49,902.64, after reaching a two-month high on Tuesday. The NSE Nifty 50 Index also gained by a similar magnitude. Eleven of the 19 sector sub-indices compiled by BSE Ltd. dropped, led by a gauge of telecom companies. On the flip side, the S&P BSE Realty index gained the most, closing at 2.2% higher.
“Concerns from rising inflationary pressure globally and increasing apprehension among investors about Federal Reserve’s soft monetary stance due to sharp rise in CPI inflation may weigh on sentiments,” Binod Modi, strategist at Mumbai-based Reliance Securities Ltd. said in a note. “Investors will continue to focus on trajectory of daily caseload and vaccination ramp up in the country in the near term.”
Any near-term possible correction in the market should be treated as opportunity of bargain trading. Investors must focus on quality stocks with robust earnings visibility and margins of safety.Binod Modi, Head Strategy at Reliance Securities
Indian Oil Q4 Net Income Beats Estimates
Indian Oil reported net income for the fourth quarter that beat the average analyst estimate.
- Net income Rs 8,780 crore vs. loss Rs 5,190 crore YoY, estimate Rs 4,720 crore
- Revenue Rs 1.64 lakh crore, +17% YoY, estimate Rs 1.30 lakh crore
- Total costs Rs 1.54 lakh crore, +6.9% YoY
- Other income Rs 1,100 crore, -36% YoY
- To pay final dividend of Rs 1.5 per share
- FY21 average GRM $5.64 per barrel vs $0.08 per Bbl YoY
Mahindra, Tata Motors, UPL in Focus: Options Watch
- Tata Motors options volume 2.7x the 20-day average, with 88,763 calls changing hands vs 40,179 puts
- Stock down 4.6%, volume 1.7x the 20-day average for this time of day
- UPL options volume 1.9x the average, with 36,216 calls vs 12,530 puts
- Stock up 1.5%, volume 1.3x the average
- Mahindra options volume 1.6x the average, with 11,228 calls vs 6,256 puts
- Stock down 1.4%, volume 0.7x the average
PI Industries Falls As Input Cost Rise Hurt Profit
Shares of the agri and fine chemicals maker fell as much as 7.2% after a disappointing fourth-quarter performance.
- Company’s Q4 operating profit margins contracted by 279 bps YoY, leading to Ebitda growth of 22%, according to note
- Net profit for 4Q was Rs 180 crore, compared with a Rs 1.9-crore estimate in a Bloomberg survey
- Higher other income helped negate the poor performance, the note said
Rupee Bonds Supported By Drop in Oil Prices, GSAP
Indian sovereign bonds rise as a slide in crude prices eases concern about price pressures in the net-oil importing nation. The central bank’s plan to purchase Rs 35,000 crore ($4.8 billion) of government bonds Thursday is also aiding sentiment.
- Traders look forward to the results of a 360b-rupee ($4.9b) sale of Treasury bills due later on Wednesday
- 10-year yields down 1bp at 5.97%; 6.64% 2035 yield drops 1bp to 6.60%
- USD/INR falls 0.1% to 72.9650; pair down about 0.6% in four trading sessions
The first 2-3 months of the financial year are crucial for the RBI to keep it tight so that yields don’t flare up, Anoop Verma, bond trader at DCB Bank
- Eventually, the market starts believing that the RBI will always be there, and it won’t be wise to go short on bonds because then you get caught on the wrong foot
- Once the market starts believing it's not prudent to short, you can then only stay away from the market or go long