The domestic equity benchmarks ended with deep cuts on Wednesday. Negative global cues and continuous selling by the FIIs dented the sentiment. Investors were also cautious ahead of Reserve Bank of India (RBI)'s policy announcement later this week. Pharma, healthcare and IT stocks rose while bank, financial services and metal shares declined.
The Nifty opened in red but pared losses as the session progressed and hit the day's high of 17,037.60 in the early afternoon trade. However, it slipped back into the negative terrain and hit the day's low of 16,820.40 in the late trade.
As per provisional closing data, the barometer index, the S&P BSE Sensex, was down 509.24 points or 0.89% to 56,598.28. The Nifty 50 index lost 148.80 points or 0.87% to 16,858.60. In six consecutive sessions, the Sensex has slipped 5.23% while the Nifty has tumbled 5.38%.
In the broader market, the S&P BSE Mid-Cap index fell 0.47% while the S&P BSE Small-Cap index shed 0.43%.
The market breadth was weak. On the BSE, 1,341 shares rose and 2,086 shares fell. A total of 105 shares were unchanged.
Meanwhile, the NSE's India VIX, a gauge of the market's expectation of volatility over the near term, rose 2.44% to 22.10.
The Reserve Bank of India (RBI)'s six-member Monetary Policy Committee meeting will begin today, 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%.
Buzzing Index:
The Nifty PSU Bank index slipped 2.07% to 2,874.15, extending its losing run for the sixth session. The index slumped 11.06% in six trading sessions.
Punjab National Bank (down 5.18%), State Bank of India (down 2.35%), Canara Bank (down 2.31%), Union Bank of India (down 2.09%), Central Bank of India (down 1.28%), Bank of India (down 1.18%), Bank of Baroda (down 1.17%), Bank of Maharashtra (down 1.14%), Indian Bank (down 0.74%) tumbled.
On the other hand, UCO Bank (up 0.43%), Punjab & Sind Bank (up 0.34%) and Indian Overseas Bank (up 0.3%) edged higher.
Stocks in Spotlight:
Torrent Pharmaceuticals slipped 2.22%. The pharmaceutical company said that it has entered into definitive agreements to acquire 100% of Curatio Healthcare (Curatio) for Rs 2,000 crore. The consideration includes Rs 115 crore (on the date of signing) of cash and cash equivalents in the acquired business indicating an enterprise value of Rs 1,885 crore. The acquisition offers the pharma company the opportunity to enhance its presence in dermatology with a differentiated portfolio and is a strong strategic fit. The company will add a field force of 600 medical representatives and a distribution network of 900 stockists.
Larsen & Toubro (L&T) shed 0.29%. The company said that the buildings & factories business of L&T Construction business has been awarded a significant contract from the State Government of Assam on an EPC basis. As per L&T's classification, the value of the significant project is 1,000 crore to 2,500 crore.
Axis Bank slipped 3%. The private lender said that it has entered into an indicative and non-binding term sheet with Go Digit Life Insurance for an acquisition of up to 9.94% stake in the life insurer. The bank will invest an amount between Rs 49.90 crore to Rs 69.90 crore, in two tranches, by subscribing to equity shares of the company, for an equity stake of up to 9.94% of the paid-up equity share capital of the company, subject to execution of definitive agreements whose terms and conditions are to be mutually agreed upon, and fulfilment of other terms and conditions.
Godrej Properties fell 0.67%. The company on Wednesday announced that it has acquired a land parcel that is strategically located in the immediate vicinity of Indiranagar and is close to the Old Airport Road and within the Outer Ring Road limits. Based on the current business assumptions, the project will have an estimated booking value potential of approximately Rs 750 crore.
Motherson Sumi Wiring India rose 0.59%. The company said its board will consider the proposal for issue of bonus shares to the equity shareholders of the company on 30 September 2022.
Power Grid Corporation of India gained 1.15%. The PSU company announced that its board approved the appointment of G. Ravisankar as chief financial officer (CFO) of the company with effect from 26 September, 2022.
Max Ventures and Industries added 0.76%. The company announced that its real estate arm Max Estates has onboarded New York Life Insurance Company (NYL), as co-investor for its Office Project at Noida. New York Life proposes to invest Rs 196 crore for a 49% equity stake. Max Estates will be responsible for the final delivery of the project and will be entitled to a development fee on the same.
Krsnaa Diagnostics rose 1.01% after the company said that it has planned to launch 600 diagnostics centers across India to offer specialized healthcare services. The company said it will set up these centres in Maharashtra, Himachal Pradesh, Punjab, West Bengal, Rajasthan, metros, tier 2 and tier 3 cities. The centers will be equipped to offer specialized services in precision medicine, genetics, genomics, and molecular diagnostics, along with the routine investigations of biochemistry and serology, which are commonly used in routine diagnostics tests.
Global Markets:
The Dow Jones index futures were down 259 points, indicating a negative opening in the US market today.
Shares in Europe and Asia tumbled on Wednesday as surging borrowing costs fed fears of a global recession.
Consumer inflation excluding fresh food is likely to rise this year, but the rate of increase will slow thereafter on energy prices, minutes from Bank of Japan's July meeting said. A few members also said inflation, excluding fresh food and energy, is unlikely to reach 2% within its projection period.
Shaking investor confidence has been the collapse in sterling and UK bond prices, which could force some fund managers to sell other assets to cover resulting losses.
Global ratings agency Moody's has warned the British government that plans for unfunded tax cuts could lead to larger budget deficits and higher interest rates, threatening the country's credibility with investors. The agency said large unfunded tax cuts were credit negative, leading to structurally higher deficits amid rising borrowing costs, a weaker growth outlook and acute public spending pressure.
U.S. stocks gave up early gains to fall deeper into a bear market on Tuesday as investors remained nervous about a potential global recession.
The Fed needs to raise interest rates by at least another percentage point this year, Chicago Fed President Charles Evans said on Tuesday.
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