The domestic equity barometers ended with deep cuts on Wednesday. The Nifty closed a tad below the 17,900 level after opening near the 18,100 mark. Weak global cues and sluggish growth outlook from companies spooked investors. Relentless selling by FIIs also dented sentiment. Trading was volatile due to monthly and weekly derivatives expiry on the NSE.
All the sectoral indices on the NSE ended in the red. Banks and financial shares tumbled. Adani Group stocks registered sharp decline, triggered by the Hindenburg Research report which said that it was short on Adani Group companies.
The barometer index, the S&P BSE Sensex tumbled 773.69 points or 1.27% to 60,205.06. The Nifty 50 index lost 226.35 points or 1.25% to 17,891.95.
In the broader market, the S&P BSE Mid-Cap index slipped 1.52% while the S&P BSE Small-Cap index declined 0.94%.
Seller outnumbered buyers. On the BSE, 1,037 shares rose, and 2,492 shares fell. A total of 117 shares were unchanged.
The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, jumped 7.30% to 14.66.
The domestic equity market will remain shut on Thursday (26 January 2023) on account of the Republic Day celebration.
Among the sectoral indices on the NSE, the Nifty Auto index (down 0.03%), the Nifty FMCG index (down 0.09%) and the Nifty Metal index (down 0.21%) outperformed the Nifty50 index. Meanwhile, the Nifty PSU Bank index (down 3.58%) the Nifty Bank index (down 2.54%) and the Nifty Private Bank index (down 2.30%) underperformed the Nifty50 index.
Numbers to Watch:
The yield on India's 10-year benchmark federal paper rose to 7.349 from its close of 7.346 recorded in the previous trading session.
In the foreign exchange market, the rupee edged slightly higher against the dollar. The partially convertible rupee was hovering at 81.62, compared with its close of 81.63 during the previous trading session.
MCX Gold futures for 3 February 2023 settlement lost 0.28% to Rs 56,810.
The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.16% to 102.09.
The United States 10-year bond yield declined 0.89% to 3.436.
In the commodities market, Brent crude for March 2023 settlement rose 2 cents or 0.02% to $86.15 a barrel.
Global Markets:
The Dow Jones futures were down 177 points, indicating a weak opening in the US stocks today.
European shares tumbled while Asian shares ended mixed on Wednesday. China and Hong Kong markets remain closed for the Lunar New Year holidays.
A widely watched gauge of German business sentiment from the Munich-based Ifo Institute showed considerably less pessimistic expectations in January.
Meanwhile, S&P Global eurozone composite purchasing managers' index came in at 50.2 in January, up from 49.3 in December. The 50 mark separates expansion from contraction.
US stocks ended nominally lower on Tuesday at the close of a rocky session marked by a raft of mixed earnings and a technical malfunction at the opening bell.
The downturn in the US business activity eased slightly in January even as it contracted for the seventh straight month, survey showed on Tuesday. S&P Global said its flash US Composite PMI Output Index, which tracks the manufacturing and services sectors, shot off to 46.6 this month from a final reading of 45 in December.
Stocks in Spotlight:
Stocks of the seven listed Adani Group companies tumbled after US-based Hindenburg Research LLC said it shorted Adani Group companies due to "brazen" market manipulation and accounting fraud.
Adani Transmission (down 8.87%), Adani Ports and Special Economic Zone (down 6.30%), Adani Wilmar (down 5%), Adani Power (down 4.99%), Adani Total Gas (down 5.59%), Adani Green Energy (down 3.04%) and Adani Enterprises (down 1.54%) slumped.
Hindenburg, an US-based investment research firm that specializes in activist short-selling, made wide-ranging allegations of corporate malpractice following a two-year investigation into the Adani group companies.
"We hold short positions in Adani Group Companies through U.S.-traded bonds and non-Indian-traded derivatives, along with other non-Indian-traded reference securities," Hindenburg disclosed in its research report published on 24 January 2023.
The Adani Group's seven key listed companies have 85% downside purely on a fundamental basis, owing to sky-high valuations, the Hindenburg report said.
In a statement issued to the media, Jugeshinder Singh, Group CFO, Adani, said: "We are shocked that Hindenburg Research has published a report on 24 January 2023 without making any attempt to contact us or verify the factual matrix. The report is a malicious combination of selective misinformation and stale, baseless and discredited allegations that have been tested and rejected by India's highest courts.
The timing of the report's publication clearly betrays a brazen, mala fide intention to undermine the Adani Group's reputation with the principal objective of damaging the upcoming Follow-on Public Offering from Adani Enterprises, the biggest FPO ever in India.
The investor community has always reposed faith in the Adani Group on the basis of detailed analysis and reports prepared by financial experts and leading national and international credit rating agencies. Our informed and knowledgeable investors are not influenced by one-sided, motivated and unsubstantiated reports with vested interests."
Q3 Earnings:
United Spirits tumbled 5.91%. The spirits maker's standalone net profit tumbled 64.45% to Rs 110.5 crore in Q3 FY23 as against Rs 310.8 crore posted in Q3 FY22.
Separately, Royal Challengers Sports, a 100% subsidiary of United Spirits, has won the bid to operate the Bangalore team for the Women's Indian Premier League (IPL). Royal Challengers Sports won the bid for a total consideration of Rs 901 crore. The consideration will be paid in 10 equal yearly instalments.
Cipla fell 2.55%. The pharma major's consolidated net profit rose 9.93% to Rs 800.96 crore on 6.05% increase in total revenue from operations to Rs 5,810.09 crore in Q3 FY23 over Q3 FY22.
TVS Motor Company jumped 5.18%. The auto maker reported 22% rise in standalone net profit to Rs 353 crore on a 15% increase in revenue to Rs 6,545 crore in Q3 FY23 over Q3 FY22.
Pidilite Industries fell 2.81%. The adhesives maker reported consolidated net profit of Rs 307.74 crore in Q3 FY23 from Rs 359.24 crore in Q3 FY22. Total income rose to Rs 3002.72 crore in Q3 FY23 from Rs 2855.89 crore in Q3 FY22.
CarTrade Tech rose 1.55% after the company's consolidated adjusted net profit rose 15% to Rs 24.05 crore on 9% increase in net revenue from operations to Rs 93.71 crore in Q3 December 2022 over Q3 December 2021. The company recorded highest-ever quarterly adjusted EBITDA at Rs 36.60 crore in Q3 FY23, up 13% YoY. Adjusted EBITDA margin stood at 33% in Q3 December 2022, higher than 32% in Q3 December 2021.
Macrotech Developers declined 1.3%. On a consolidated basis, the real estate developer's net profit jumped 41.41% to Rs 404.98 crore despite of 13.87% surge in net sales to Rs 1,773.80 crore in Q3 FY23 over Q3 FY22.
Indus Towers slumped 7.36%. The company reported consolidated net loss of Rs 708 crore in Q3 FY23 as compared to net profit of Rs 1571 crore in Q3 FY22. Revenue fell to Rs 6765 crore in Q3 FY23 from Rs 6927 crore in Q3 FY22.
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