The headline equity indices ended with modest gains on Monday, rising for the second consecutive session. The Nifty settled around the 18,600 level. Auto, media and private bank stocks were in demand. On the other hand, FMCG, PSU bank and IT shares declined.
As per provisional closing data, the barometer index, the S&P BSE Sensex advanced 240.36 points or 0.38% to 62,787.47. The Nifty 50 index gained 59.75 points or 0.32% to 18,593.85.
In the broader market, the S&P BSE Mid-Cap index added 0.29% while the S&P BSE Small-Cap index rose 0.51%.
The market breadth was positive. On the BSE, 2,172 shares rose and 1,489 shares fell. A total of 179 shares were unchanged.
The Reserve Bank of India (RBI)'s six-member Monetary Policy Committee is scheduled to meet this week during 6-8 June 2023. RBI Governor Shaktikanta Das will announce the MPC decision on Thursday, 8 June 2023, the last date of the meeting.
Economy:
Posting 61.2 in May, the seasonally adjusted S&P Global India Services PMI Business Activity Index highlighted a further expansion in output across the sector. Despite falling from 62.0 in April, the latest reading indicated the second strongest rate of growth in just under 13 years. Favorable demand conditions, new client wins and positive market dynamics reportedly supported output.
Meanwhile, India's foreign exchange reserves fell for a second consecutive week and stood at a one-month low of $589.14 billion as of May 26, the Reserve Bank of India's (RBI) data showed on Friday. That was a decrease of $4.34 billion from the previous week. For the week ended May 26, the foreign currency assets, a major component of the reserves, declined by $4.014 billion to $520.931 billion, according to the Weekly Statistical Supplement released by the RBI.
Gold reserves dropped by $225 million to $44.902 billion, the RBI said. The Special Drawing Rights (SDRs) were down by $84 million to $18.192 billion, the apex bank said. The country's reserve position with the IMF was down by $17 million to $5.113 billion in the reporting week, the apex bank data showed.
Buzzing Index:
The Nifty Auto index rose 1.26% to 14,570.25, extending gains for the fourth day in a row. The index gained 2.77% in four trading sessions.
Mahindra & Mahindra (up 3.94%), Ashok Leyland (up 1.95%), Tata Motors (up 1.94%), Bharat Forge (up 1.34%), Maruti Suzuki India (up 1%), Bajaj Auto (up 0.92%), Samvardhana Motherson International (up 0.75%), Bosch (up 0.63%), MRF (up 0.48%) advanced.
On the other hand, Eicher Motors (down 0.9%), TVS Motor Company (down 0.84%) and Hero MotoCorp (down 0.8%) declined.
Auto retail sales up 10% YoY in May: FADA:
Federation of Automobile Dealers Associations (FADA), stated in a latest update that auto retail sales in May demonstrated a 10% YoY growth, encompassing positive performances across all vehicle categories including 2W, 3W, PV, Tractor and CV with respective growth rates of 9%, 79%, 4%, 10%, and 7%. Despite a slight decline of -2% compared to pre-COVID levels, the overall retail figures relatively improved, except 2W sales (-8%) and CV sales (-7%) being the primary segments which experienced slight setback.
May showcased an increased penetration of EVs, accounting for 8% of total sales, with 2W contributing 7%, 3W contributing 56%, CV contributing 0.5% and PV contributing 2.5% respectively.
Stocks in Spotlight:
Wipro shed 0.07%. The IT major has fixed 16 June 2023 as the Record Date for the purpose of determining the entitlement and the names of equity shareholders who are eligible to participate in the buyback of equity shares by the company.
Tata Power Company rose 1.41% after the company said that its subsidiary, Tata Power Renewable Energy (TPREL) has commissioned a 110 megawatt (MW) solar power project in Bikaner, Rajasthan. The project will supply 110 MW of green power to the Kerala State Electricity Board and it is expected to generate approximately 211 million units (MUs) and reduce a 2,58,257 MT (metric tonne) carbon footprint annually.
Vedanta declined 0.70%. The diversified minerals company announced that its subsidiary, Bharat Aluminium Company (BALCO) has entered into a power delivery agreement (PDA) through special purpose vehicle (SPV), Serentica Renewables India (SRIPL).
NTPC gained 0.80%. The state-run power major said that its subsidiary, NTPC Green Energy has declared commercial operation of fifth and last part capacity of 50 megawatt (MW) out of 300 MW Nokhra Solar PV project at Bikaner, Rajasthan.
SBI Life Insurance Company gained 1.07%. The company will take over the policy liabilities of around two lakh policies of Sahara India Life Insurance Company (SILIC), backed by the policyholders' assets, with immediate effect.
Nava jumped 5.50% after the company said its Zambian subsidiary, Maamba Collieries (MCL), had fully discharged all overdue loan installments. MCL had paid off all overdue loan installments and reduced its overall liabilities from $483 million (Rs 3,999 crore) to $206 million (Rs 1,707 crore) due to improved operational cash flows and receipts from an arbitral award against Zambia Electricity Supply Corporation (ZESCO).
One 97 Communication (Paytm) skid 0.71%. The company said that its lending business witnessed a 169% year on year growth in disbursement to Rs 9,618 crore ($1.2 billion) (for April & May 2023). The number of loans disbursed jumped 54% year on year to 85 lakh in the quarter to date (for April & May 2023).
Lupin added 0.17%. The drug major on Friday announced the launch of Darunavir tablets in the United States market. Darunavir tablet is a generic equivalent of Prezista tablets of Janssen Products, LP. Darunavir is in a class of medications called protease inhibitors. It works by decreasing the amount of HIV in the blood. Although darunavir does not cure HIV, it may decrease your chance of developing acquired immunodeficiency syndrome (AIDS) and HIV-related illnesses such as serious infections or cancer.
Indian Overseas Bank (IOB) fell 1.18%. The bank informed that the Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 2.20 crore for non-compliance with certain directions issued by RBI.IOB failed to make minimum mandatory transfer of a sum equivalent to 25% of its disclosed profit for the year 2020-21 to its reserve fund and there was significant divergence between the NPAs, as reported by it and as assessed by the inspection.
Mahindra Lifespace Developers was flat. The real estate developer on Friday announced that OMRON Healthcare will start operations in March 2025 by manufacturing the blood pressure monitors in India at Mahindra's Origins in Chennai. The OMRON Healthcare factory will be built over 6.02 acres and will be manufacturing blood pressure monitors and supplying them mainly to the domestic market.
Global Markets:
Markets in Europe traded mixed while Asian stocks advanced on Monday on optimism the Federal Reserve would pause its rate hikes this month after a mixed U.S. jobs report, while oil jumped as Saudi Arabia pledged big output cuts in July.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, on Sunday made no changes to its planned oil production cuts for this year, as coalition chair Saudi Arabia announced further voluntary declines. Oil prices rose after OPEC kingpin Saudi Arabia decided to cut production by another million barrels per day. OPEC+ also announced in a statement that it will limit combined oil production to 40.463 million barrels per day over January-December 2024.
China's services activity picked up in May, a private-sector survey showed on Monday. The Caixin/S&P Global services purchasing managers' index (PMI) rose to 57.1 in May from 56.4 in April. The 50-point mark separates expansion from contraction in activity.
Japan's service sector saw a record rate of expansion in May, according to private surveys by au Jibun bank. The country's services purchasing managers' index came in at 55.9, surpassing the previous record of 55.4 set last month and extending its streak to six straight months of quickening expansion.
US stocks closed higher on Friday after a labor market report showing moderating wage growth in May indicated the Federal Reserve may skip a rate hike in two weeks, while investors welcomed a Washington deal that avoided a catastrophic debt default. U.S. President Joe Biden signed into law a debt ceiling bill that allowed the U.S. to avert defaulting on its financial obligations over the weekend.
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