The Indian equity market is reacting sharply to the latest political developments, swinging from optimism to pessimism. Indices are in a free fall downward spiral in todays trade, as trends reveal that INDIA block has put up a better fight than anticipated and that Prime Minister Narendra Modi-led NDA is unlikely to win with a huge margin. BSE Sensex and Nifty50 have plummeted nearly 5%, a stark reversal from Monday's 3% gains driven by exit poll projections of a decisive NDA victory.
At 11:30 IST, the barometer index, the S&P BSE Sensex was tumbled 3,449.11 points or 4.46% to 73,058.34. The Nifty 50 index fell 1,107.45 points or 4.76% to 22,156.45.
The broader market underperformed the headline indices. The S&P BSE Mid-Cap index dropped 6.99% and the S&P BSE Small-Cap index declined 5.90%.
The market breadth was weak. On the BSE, 396 shares rose and 3,227 shares fell. A total of 114 shares were unchanged.
The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, spurts 34.44% to 24.05.
IPO Update:
The initial public offer (IPO) of Kronox Lab Sciences received 10,50,13,700 bids for shares as against 66,99,000 shares on offer, according to stock exchange data at 11:20 IST on Tuesday (04 June 2024). The issue was subscribed 15.68 times.
The issue opened for bidding on Monday (03 June 2024) and it will close on Wednesday (05 June 2024). The price band of the IPO is fixed between Rs 129 to Rs 136 per share. An investor can bid for a minimum of 110 equity shares and in multiples thereof.
Buzzing Index:
The Nifty Oil & Gas index tanked 8.97% to 11,302.95. The index rallied 7.60% in the past two consecutive trading sessions.
Adani Total Gas (down 15.03%), Oil & Natural Gas Corpn (down 10%), Hindustan Petroleum Corporation (down 9.99%), GAIL (India) (down 9.99%), Petronet LNG (down 9.61%), Mahanagar Gas (down 7.77%), Oil India (down 7.38%), Indian Oil Corporation (down 7.36%), Bharat Petroleum Corporation (down 6.95%) and Gujarat Gas (down 6.62%) declined.
Stocks in Spotlight:
Sapphire Foods India shed 0.37%. The company said that its board will meet on Wednesday, 19 June 2024, to consider a proposal for sub-division/split of existing equity shares of the company.
Rail Vikas Nigam tumbled 10.49%. The company announced that it has received a letter of acceptance (LoA) for engineering, procurement and construction (EPC) order from South Central Railway worth Rs 440 crore.
Global Markets:
Most of the Asian stocks declined on Tuesday. This comes as global investors grapple with the possibility that the exceptional growth of the US economy might be coming to an end. This concern stems from further signs of weakness in US manufacturing activity.
Oil prices continued their decline, with both US crude ($73.91/barrel) and Brent crude ($78/barrel) reaching four-month lows. This follows the decision by OPEC+ to gradually increase production, reducing overall output cuts.
US stocks opened June on a negative note. The Dow Jones Industrial Average fell after weak manufacturing data raised doubts about the economy's strength. Sectors reliant on economic growth, such as banks and industrials, led the decline. Despite the Dow's decline, the broader S&P 500 and tech-heavy Nasdaq Composite managed small gains.
The U.S. manufacturing sector showed signs of slowing, with the ISM manufacturing index measuring 48.7 in May, sending Treasury yields and the dollar lower. A reading below 50 is an indication of a contraction.
On Monday, U.S. Treasury yields fell to the lowest point in two weeks. The 2-year yield was 6 basis points lower while the 10-year yield was down 11 basis points.
On a brighter note, chipmaker Nvidia defied the market trend with a near 5% surge on Monday. This rise came after the company announced a new line of artificial intelligence chips, showcasing their commitment to staying competitive in the rapidly evolving market.
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