The domestic equity benchmarks crashed on Monday, tracking dismal global cues. Selling was wide spread with IT, metals and banks falling the most. Investors dumped risky assets as a steeper-than-expected rise in US consumer prices in May fueled fears of more aggressive interest rate hikes by the Federal Reserve. On Friday, US government data showed inflation reached 8.6% in the 12 months ended in May, the steepest rise in consumer prices since December 1981.
The barometer index, the S&P BSE Sensex, slumped 1,456.74 points or 2.68% to 52,846.70. The Nifty 50 index tumbled 427.40 points or 2.64% to 15,774.40. The Nifty has corrected 4.27% in two sessions.
Bajaj Finserv (down 7.02%), Bajaj Finance (down 5.44%), IndusInd Bank (down 5.27%), Tech Mahindra (down 4.84%) and ICICI Bank (down 4.46%) were major drags today.
In the broader market, the S&P BSE Mid-Cap index shed 2.73% while the S&P BSE Small-Cap index dropped 3.15%.
The market breadth was weak. On the BSE, 658 shares rose and 2,839 shares fell. A total of 116 shares were unchanged.
The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, surged 14.25% to 22.37.
Economy:
Industrial activity in April jumped 7.1% year on year, according to the index of industrial production (IIP) data released by the government on Friday. In comparison, industrial growth had expanded 1.9% in March. Growth in the mining sector was 7.8% in April 2022. The manufacturing sector expanded by 6.3%. Power sector showed a growth of 11.8% year on year in April 2022
Numbers to Watch:
The yield on India's 10-year benchmark federal paper rose to 7.605 as compared with 7.519 at close in the previous trading session.
In the foreign exchange market, the rupee was lower against the dollar. The partially convertible rupee was hovering at 78.13, compared with its close of 77.93 during the previous trading session.
MCX Gold futures for 5 August 2022 settlement fell 0.78% to Rs 51,298.
The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, increased 0.58% to 104.75.
In the commodities market, Brent crude for August 2022 settlement fell $1.60 or 1.31% at $120.41 a barrel. The contract fell $1.06 or 0.86% to settle at $ 122.01 a barrel during the previous trading session.
Foreign Markets:
The US Dow Jones futures were down 427.40 points, indicating a dismal start to equities on Wall Street today.
Shares in Europe and Asia slumped on Monday after May's U.S. inflation print came in hotter than expected on Friday, reigniting fears that the Federal Reserve will need to hike rates more aggressively.
Last week, the European Central Bank had also confirmed that it intends to hike interest rates by 25 basis points at its July meeting.
The UK economy contracted by 0.3% in April after it shrank by 0.1% the month before.
Meanwhile, a COVID-19 warning from Beijing added to concerns about global growth.
Buzzing Index:
The Nifty IT index dropped 4.12% to 27,914.60. The index has tumbled 6.21% in two sessions.
Mindtree (down 5.89%), L&T Technology Services (down 5.52%), Larsen & Toubro Infotech (down 5.23%), Mphasis (down 5.02%), Coforge (down 4.96%), Tech Mahindra (down 4.85%), TCS (down 4.04%), Infosys (down 3.25%), Wipro (down 2.92%) and HCL Technologies (down 1.92%) slumped.
Stocks in Spotlight:
RBL Bank slumped 22.45%. The bank appointed R Subramaniakumar as the new managing director and CEO of the bank for three years. Shares of the private sector bank hit an all time low of Rs 92.75 in intraday today on the BSE.
Life Insurance Corporation of India (LIC) dropped 5.85%. The 30-day lock-in period for anchor investors ended on Monday, 13 June 2022. The end of lock-in period will allow anchor investors to sell their existing shares in the market. Ahead of the IPO, LIC on 2 May 2022 raised Rs 5,627.27 crore from anchor investors by allotting about 5.93 crore shares to 123 investors at Rs 949 per share. The stock is currently down about 29% compared with its issue price.
Bank of Baroda tumbled 4.95%. The state-run bank on Friday announced an increase in the marginal cost of funds-based lending rate (MCLR) by 10-20 basis points across different tenors, effective from 12 June 2022.
UltraTech Cement slipped 2.81%. Fitch Ratings has revised the outlook on UltraTech Cement's long-term foreign-currency issuer default rating (IDR) to 'stable' from 'negative' and affirmed the foreign- and local-currency IDRs at 'BBB-'. The outlook on the local-currency IDR is 'stable', the credit rating agency said.
Coal India (CIL) declined 3.71%. CIL has floated two international competitive bidding e-tenders of 3 million tones (MTs) each, to source coal from abroad. The bids are for 5,000 GAR (gross as received) quality of thermal grade coal.
GlaxoSmithKline Pharmaceuticals shed 0.60%. The board has recommended a dividend of Rs 90 (including special dividend of Rs 60) per equity share for the year ended 31 March 2022. The company has fixed 8 July 2022 as the record date for determining entitlement of members to final dividend for the financial year ended 31 March 2022.
Jammu and Kashmir Bank dropped 5.41%. The bank's board on 10 June 2022 approved the appointment of Pratik D Punjabi as the chief financial officer of the bank.
Vedanta fell 3.82%. Vedanta Limited Iron & Steel sector has ventured into international iron ore mining operations in Liberia, West Africa through its subsidiary WCL. WCL is a wholly-owned subsidiary of Bloom Fountain (BFL) which is, in turn, a wholly-owned subsidiary of Vedanta.
Trident declined 4.30%. In the home textile division, production of bath linen was 3,364 metric tons (MT) (down 34.32% YoY), bed linen production was 2.85 million metres (down 6.25% YoY) and yarn production was 9,191 MT (down 10.86% YoY) in May 2022. Production of paper jumped 14.34% YoY to 14,372 MT while that of chemicals fell 1.36% YoY to 8,923 MT during the period under review.
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