The benchmark indices ended a volatile session with deep losses on Wednesday. Negative global cues triggered profit selling in large caps. However, small and mid-caps stocks witnessed buying.
The S&P BSE Sensex fell 566.09 points or 0.94% at 59,610.59. The Nifty 50 index shed 149.75 points or 0.83% at 17,807.75.
HDFC and HDFC Bank corrected after recent steep gains triggered by merger announcement. IT stocks were also under pressure ahead of Q4 earnings. On the other hand, metals, PSU banks and oil & gas shares bucked weak market trend.
The broader market settled higher. The S&P BSE Mid-Cap index rose 0.41% while the S&P BSE Small-Cap index gained 0.38%.
The market breadth, indicating the overall health of the market, was strong. On the BSE, shares 2,142 rose and 1,277 shares fell. A total of 93 shares were unchanged.
The NSE's India VIX, a gauge of market's expectation of volatility over the near term, rose 2.89% to 19.0225.
Economy:
The seasonally adjusted S&P Global India Services PMI Business Activity Index rose to 53.6 in March 2022 from 51.8 in February 2022. The indices vary between 0 and 100, with a reading above 50 indicating an overall increase compared to the previous month, and below 50 an overall decrease. The indices are then seasonally adjusted.
The latest number pointed to the strongest rate of expansion since last December. The upturn stemmed from new business wins, strengthening demand conditions and greater consumer footfall due to the relaxation of COVID-19 restrictions.
Meanwhile, the S&P Global India Composite PMI Output Index stood at 54.3 in March, up from 53.5 in February. The number highlighted the strongest rate of expansion in 2022 so far. Manufacturers signalled a sharper increase than service providers, but growth slowed among the former and accelerated at the latter.
Number to Track:
The yield on 10-year benchmark federal paper rose to 6.918% from its previous close of 6.899%.
In the foreign exchange market, the rupee was higher against the dollar. The partially convertible rupee was hovering at 75.7650, compared with its close of 75.295 during the previous trading session.
MCX Gold futures for 5 May 2022 settlement rose 0.32% to Rs 51,402.
The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, fell 0.03% to 99.395.
In the commodities market, Brent crude for May 2022 settlement rose $1.41 or 1.32% at $108.05 a barrel.
Global Markets:
The US Dow Jones index futures were down 210 points, indicating a weak opening in the US stock market today.
Shares in Europe and Asia declined on Wednesday, as investors await the FOMC March meeting minutes, to be released tonight.
US Federal Reserve Governor Lael Brainard, who is typically considered one of the more dovish Fed members, said the central bank needs to shrink its balance sheet rapidly to drive down inflation. Inflation is much too high and is subject to upside risks, she said, noting the Fed needed a steady pace of rate hikes as well.
Global investors also await the details of fresh international sanctions against Russia after allegations emerged of civilian killings in Ukrainian towns now recaptured from Russian forces. The European Commission on Tuesday proposed banning Russian coal as part of its next round of sanctions.
China's Caixin Services Purchasing Managers' Index declined to 42.0 in March, well below February's reading of 50.2 as well as the 50 mark that separates growth from contraction on a monthly basis. Wednesday's reading was also the lowest since February 2020.
Stocks in Focus:
HDFC Bank fell 3.51% and HDFC declined 3.26% on profit selling after a steep rally on Monday, 4 April 2022. Both these stocks surged about 10% on Monday after merger announcement.
Mortgage firm HDFC will merge with HDFC Bank. Shareholders of HDFC as on the record date will receive 42 shares of HDFC Bank, for 25 shares held in HDFC, and the equity shares held by HDFC in HDFC Bank will be extinguished as per the merger scheme.
Post merger, HDFC Bank will be 100% owned by public shareholders and existing shareholders of HDFC will own 41% of HDFC Bank.
Titan Company fell 0.26%. The company on Wednesday said it finished the January-March quarter of fiscal year 2021-22 on a satisfactory note despite disruptions. However, its jewellery business reported a 4% year-on-year (YoY) decline in revenue during the quarter.
The watches and wearables division saw good growth momentum amidst a challenging external environment with sales increasing across all offline channels, it said. The segment's revenue grew 12% YoY. Meanwhile, the eyecare division recorded 5% YoY growth, while other businesses saw 23% rise in revenue.
Coastal Corporation jumped 5.34% after the company announced that it will soon commence operations at its new plant (Unit III) at Kakinada SEZ in Andhra Pradesh. The company said that it invested Rs 70 crore in Unit III. The facility is a completely integrated and has production capacity of 35 MTPD. The trial production at the facility was conducted on 5 April 2022 and the commercial production will start in the next 10 to 15 days.
Maruti Suzuki India fell 0.21%. The car major announced that it will hike prices of its products in April 2022. The increase will vary for different models.
Marico fell 4.18%. The FMCG major said that in Q4 quarter, consumption trends remained subdued amid weak rural sentiment and inflation in global commodities due to geopolitical tensions. Consolidated revenue growth in the quarter touched high single digits, it said. The company expects a "marginal growth" in profits in Q4 due to a rise in input costs and higher advertising and promotional spending. Quoting a Nielsen study, Marico said FMCG volumes declined in the Jan-Feb 2022 period on a year-on-year basis.
Hindustan Aeronautics (HAL) fell 0.25%. The state-run firm entered into a MoU with Israel Aerospace Industries (IAI) to convert Civil (Passenger) aircraft to Multi Mission Tanker Transport (MMTT) aircraft in India.
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