Mid Session Commentary

Indices trade with minor cuts, IT shares decline
(14:33, 29 Sep 2022)

The benchmark indices traded with minor cuts in the mid-afternoon trade. The Nifty traded below the 16,850 mark after hitting the day's high of 17,026.05 in the early trade. IT shares witness profit booking after gaining in the past three trading sessions. Investors awaited the outcome of a key meeting of the RBI's monetary policy committee due this week for domestic cues.

Trading was volatile as traders roll over positions in the F&O segment from the near month September series to October series. The September 2022 F&O contracts will expire today, 29 September 2022.

At 14:30 IST, the barometer index, the S&P BSE Sensex, was down 90.47 points or 0.16% to 56,507.81. The Nifty 50 index lost 32.20 points or 0.19% to 16,826.40.

In the broader market, the S&P BSE Mid-Cap index fell 0.26% while the S&P BSE Small-Cap index gained 0.36%.

The market breadth was positive. On the BSE, 1,733 shares rose and 1,625 shares fell. A total of 159 shares were unchanged.

Meanwhile, the Reserve Bank of India (RBI)'s six-member Monetary Policy Committee began on 28 September 2022. RBI Governor Shaktikanta Das will announce the MPC decision on 30 September 2022, the last date of the meeting. The RBI is widely expected to maintain the balancing act between growth and inflation.

In the past three policy reviews, the RBI's rate-setting panel has raised 140 basis points in total since May this year. Currently, the repo rate, the interest rate at which the RBI lends to the commercial bank, stands at 5.40%.


The Union Cabinet on Wednesday (28 September 2022) approved the release of additional installment of Dearness Allowance and Dearness Relief at 4% to Central Government employees and pensioners due from 1 July 2022.

The additional financial implications on account of this increase of Dearness Allowance to Central Government employees are estimated at Rs 6,591.36 crore per annum; and Rs 4,394.24 crore in the financial year 2022-23 (i.e. for a period of 8 months from July 2022 to February 2023).

The additional financial implications on account of this increase of Dearness Relief to pensioners are estimated at Rs 6,261.20 crore per annum; and Rs 4,174.12 crore in the financial year 2022-23 (i.e. for a period of 8 months from July 2022 to February 2023).

Numbers to Track:

The yield on India's 10-year benchmark federal paper rose to 7.336 as compared with 7.333 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 81.94, compared with its close of 81.93 during the previous trading session.

MCX Gold futures for 5 October 2022 settlement added 0.15% to Rs 49,826.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.94% to 113.66.

The United States 10-year bond yield advanced 3.64% to 3.842.

In the commodities market, Brent crude for November 2022 settlement declined $1.57 or 1.76% at $87.75 a barrel.

Buzzing Index:

The Nifty IT index fell 0.98% to 26,801.55, snapping three day gaining streak. The index witnessed profit booking after gaining 1.79% in three trading sessions.

Mindtree (down 2.81%), Larsen & Toubro Infotech (down 2.64%), Coforge (down 2.22%), Tech Mahindra (down 2.11%), Wipro (down 1.42%), Tata Consultancy Services (down 1.28%), L&T Technology Services (down 0.88%), Mphasis (down 0.25%) edged lower.

Stocks in Spotlight:

Adani Enterprises (AEL) declined 0.36%. The company announced that its wholly owned subsidiaries, Budaun Hardoi Road (BHRPL), Hardoi Unnao Road (HURPL) and Unnao Prayagraj Road (UPRPL) have achieved financial closure for the access-controlled six lane (expandable to eight lane) greenfield Ganga Expressway project (Group-II, III & IV) in Uttar Pradesh respectively on design, build, finance, operate, transfer (DBFOT) (Toll) basis under public private partnership (PPP) mode. The project concession period is for 30 years with traffic link extension provision of 6 years, including three years construction period, the company stated. Adani Enterprises has secured Rs 10,238 crore from the lenders to finance the construction of the Ganga Expressway.

Arman Financial Services advanced 2.58% after the NBFC announced that the board of directors has approved the allotment of securities worth Rs 115 crore to marquee investors on a preferential basis. The company alloted 6,24,388 unsecured compulsorily convertible debentures (CCDs) on preferential basis to investors belonging to non-promoter category. The total amount raised aggregated to 76.80 crore. Some of the marquee investors include funds controlled by Singapore based Sixteenth Street Capital and USA based Seven Canyons Advisors. Other investors include both domestic and foreign individuals.

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