The frontline equity indices slumped on Wednesday, extending losses for the fourth trading session. The Nifty 50 opened at 17,755.35 and declined further as the session progressed to settle below the 17,600 level.
The barometer index, the S&P BSE Sensex dropped 927.74 points or 1.53% to 59,744.98. The Nifty 50 index lost 272.40 points or 1.53% to 17,554.30. In four consecutive sessions, the Sensex slipped 2.57% while the Nifty fell 2.67%.
Meanwhile, the NSE's India VIX, a gauge of the market's expectation of volatility over the near term, surged 11.27% to 15.59.
In the broader market, the S&P BSE Mid-Cap index declined 1.16% while the S&P BSE Small-Cap index shed 1.09%. The market breadth was weak.
Sellers outnumbered buyers. On the BSE, 884 shares rose and 2,592 shares fell. A total of 130 shares were unchanged.
Investors back home will await the minutes of RBI's (latest) February monetary policy meeting, while the Fed's (FOMC) February policy meeting minutes will also be tracked globally.
Business activity in the US unexpectedly increased in February to reach its highest level in eight months. This indicated that the Fed will need to continue raising interest rates for longer.
A global research firm has reportedly said that the US Federal Reserve could raise interest rates by a quarter-percentage point at its March, May and June meetings in response to a stronger economic expansion. It further reportedly said that the prospects for the Fed returning to 50 basis-point moves have not been ruled out completely.
The Nifty Metal index (down 2.64%), the Nifty Media index (down 1.93%) and the Nifty PSU Bank index (down 1.91%) underperformed the Nifty. The Nifty Pharma index (down 0.23%), the Nifty FMCG index (down 0.31%) and the Nifty Healthcare index (down 0.35%) outperformed the Nifty.
Numbers to track:
The yield on India's 10-year benchmark federal paper advanced to 7.432 from 7.391 in previous trading session.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 82.89, compared with its close of 82.7950 during the previous trading session
MCX Gold futures for 5 April 2023 settlement declined 0.12% to Rs 56,100.
The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.10% to 104.28.
The United States 10-year bond yield advanced 0.19% to 3.960.
In the commodities market, Brent crude for April 2023 settlement declined $1.13 or 1.36% to $81.92 a barrel.
Stocks in Spotlight:
The rout in stocks of Adani group companies continued on Wednesday.
Adani Enterprises (down 10.43%), Adani Ports and Special Economic Zone (down 6.25%), Adani Total Gas (down 5%), Adani Green Energy (down 5%), Adani Transmission (down 5%), Adani Wilmar (down 5%), Adani Power (down 5%) Ambuja Cements (down 4.92%) and ACC (down 4.13%) slumped.
Since January 24, the day US-based Hindenburg Research released its report on Adani Group, alleging fraud, the conglomerate has seen its market capitalisation slide almost Rs 12 lakh crore. In less than a month, Adani stocks have lost 60% of their value.
As per recently published media reports, Wikipedia claimed some paid editors created 'puffery' around Adani, his family and his businesses. The website reportedly claimed non-neutral material was added to the group's profile and warnings were reportedly removed from the data.
State Bank of India (SBI) declined 1.32%. The bank announced that it has raised Rs 4,544 crore through allotment of Basel III compliant AT-1 bonds in the nature of debentures. These non-convertible, taxable, perpetual, subordinated, unsecured, fully paid up Basel III compliant AT- 1 bonds in the nature of debentures have a coupon rate of 8.20% p.a. The bonds are perpetual and there is no maturity date.
Reliance Industries fell 2.28%. The company said that its wholly-owned subsidiary Reliance New Energy (RNEL) has completed the purchase of certain shares of Nexwafe GmbH, for an aggregate consideration of 7,55,684 euros.
Biocon slipped 2.16%. The biopharmaceutical company announced that it has issued and allotted non-convertible debentures (NCDs) aggregating to Rs 1,070 crore on private placement basis in three series. These unlisted, secured, rated, redeemable, non-convertible debentures having face value of Rs 1 lakh each allotted on 21 February 2023 and will be matured in 21 February 2028.
Bharat Electronics (BEL) shed 0.52%. BEL has signed an MoU with Aeronautical Development Agency (ADA), DRDO, for the Advanced Medium Combat Aircraft (AMCA) programme.
Manappuram Finance fell 0.85%. The Kerala-based gold NBFC on Wednesday (22 February 2023) announced that its board may consider raising funds through debt securities in March 2023.
Sapphire Foods India lost 1.02%. The board of directors of Gamma Pizzakraft (Overseas) Private Limited (GPOPL), wholly-owned subsidiary of Sapphire Foods India, has considered and approved subscription of upto 81,914 equity shares of Gamma Island Food Private Limited (GIFPL), subsidiary of GPOPL and step-down subsidiary of the company, for a total consideration of upto MVR 18,840,220.
ITI rose 2.42% after the company announced the appointment of Rajesh Rai as chairman and managing director (MD) of the company for period of five years with effect from 21 February 2023.
Allcargo Logistics tumbled 4.18%. The company announced that it has entered into a securities purchase agreement (SPA) with BRE Asia Urban Holdings to acquire 90% equity share capital and optionally convertible debentures (OCDs) of Madanahatti Logistics and Industrial Parks. The company will acquire 5,40,000 shares or 90% of the equity shareholding of Madanahatti Logistics for a cash consideration of Rs 6.36 crore and 1,07,78,147 Class A OCDs for Rs 17.60 crore.
West Coast Paper Mills declined 3.86%. The company said that its production at the paper and paper board division at Dandeli has been disrupted due to illegal strike of contract workers.
Global Markets:
Shares in Europe and Asian tumbled on Wednesday as investors gauge the global economic outlook and await the minutes from the U.S. Federal Reserve's latest monetary policy meeting.
Japan's producer prices index rose 1.6% on an annualized basis, slightly higher than December's figure of 1.5%. The PPI measures the average movements of prices received by domestic producers for goods and services sold.
Meanwhile, the central bank of New Zealand has raised interest rates by 50 basis points from 4.25% to 4.75, in line with expectations. In a release, the Reserve Bank of New Zealand indicated that interest rates could still rise, to ensure inflation returns to its target range over the medium term.
U.S. stocks dropped Tuesday as higher rates continue to pressure market sentiment, and the latest batch of retail earnings raised concerns about the state of the consumer.
The Fed on Wednesday is scheduled to release the minutes from its January 31-February 1 meeting. The central bank hiked rates by 25 basis points at that gathering.
US business activity unexpectedly rebounded in February, reaching its highest level in eight months, according to a survey on Tuesday. S&P Global said its flash US Composite PMI Output Index, which tracks the manufacturing and services sectors, increased to 50.2 this month from a final reading of 46.8 in January.
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