Share Market Highlights: Sensex ends 185 pts lower, Nifty below 16550, resistance at 16800; Infy top dragger

Ashwani Bhatia today took charge as Whole Time Member of the capital markets regulator Securities and Exchange Board of India (SEBI). Prior to his appointment to the SEBI, Ashwani Bhatia was the Managing Director (MD) of State Bank of India, the largest public sector lender in the country. The veteran banker has held various positions across different verticals of SBI, the most recent being the MD of the bank and prior to that he was the Managing Director and Chief Executive Officer at SBI Funds Management.

“Banks have been a significant out-performer in the rebound in markets over the last week – the price ratio of Banknifty / Nifty is on the verge of breaking out from a 2-1/2 year downtrend, suggesting a major structural trend change in the market. In the very near-term, a rebound in crude oil prices poses a risk to the current account deficit and therefore, to expectations of INR depreciation. Hence, foreign investor flows would remain a headwind to the market, capping any meaningful upside in absolute terms in headline indices.

Positive commentary from Infy and HDFC Bank over the last few days would serve to cushion sentiment, and these sectors can be out-performers for the coming month. Moreover, there is traction in 2-wheeler sales driven by marriage season demand and reopening of educational institutions. On the other hand, input cost inflation concerns would keep Cement and Consumer Durable companies under pressure going ahead.”

~S Hariharan, Head Sales Trading, Emkay Global Financial Services

Indian benchmark indices ended today's volatile trading session on a negative note amid worsening geopolitical situation in Europe. Additionally, rising bond yields in the debt market also dampened investors' sentiment. The BSE Sensex index fell 185 points, or 0.33%, to end at 55,381 levels, while the NSE Nifty5 0 index shut shop at 16,523, down 62 points or 0.37%. Both the indices had touched intra-day lows of 55,091 and 16,439, respectively. In the broader markets, the BSE MidCap index slipped 0.1%, while the BSE SmallCap index added 0.62%. Sectorally, the Nifty IT index slipped over 1%, while the PSU Bank index added 0.9%.

Ace investor Rakesh Jhunjhunwala sold 25 lakh equity shares (0.93 percent of total shareholding) in the company via open market transactions. With this, Jhunjhunwala's shareholding has gone down to 6.16 per cent, down from 7.1 per cent earlier.

Total two-wheelers sales grew from 1,54,416 units in May 2021 to 2,87,058 units in May 2022. Domestic two-wheeler sales grew from 52,084 units in May 2021 to 1.91,482 units in May 2022. Motorcycle sales grew from 1,25,188 units in May 2021 to 1,48,560 units in May 2022. Scooter sales of the Company grew from 19,627 units in May 2021 to 1,00,665 units in May 2022, TVS Motor said in its BSE filing. The shortage in the supply of semiconductors has impacted the production and sales of premium two-wheelers, it reasoned.

BSE Power Index fell 1.73%, led by losses in Adani Power, Adani Transmission (down 4%), JSW, Adani Green Energy (down 3%), Powergrid, Tata Power (down 1%).

Indian benchmark indices extended losses in noon deals. BSE Sensex is down 254.55 points or 0.46% at 55,311.86, and the Nifty 50 index is down 82.00 points or 0.49% at 16502.50.

Goods and Services Tax (GST) collections for May 2022 stood at Rs 1,40,885 crore, an increase of 44% on-year basis. In fact the GST collections crossed Rs 1.40 lakh crore mark for the fourth time since the inception of the tax regime. The revenues for the month of May 2022 are 44 per cent higher than the GST revenues recorded in the corresponding period of last year, which had stood at Rs 97,821 crore.

Oil India share price rallied 15 per cent in three days to Rs 251 apiece on BSE after the company reported highest-ever profit at Rs 1,630.01 crore in January-March quarter. The fourth quarter net profit was almost double of Rs 847.56 crore profit in same period last year as the oil-major got nearly $100 per barrel price for oil produced and sold. The board of the company also recommended a final dividend of Rs 5 per share for FY22. Read full story

Infosys shares fell 1 per cent on Wednesday, a day after the IT major in an analyst meet reiterated its FY23 guidance of 13-15 per cent and said demand for IT services is strong and that there is no visible impact of macro headwinds. So far this year, Infosys stock has plunged more than 20 per cent, underperforming Nifty which has tanked 6%. Analysts expect Infosys share price to rally going forward on the back of strong growth. A few analysts who attended the analyst meeting maintained their ‘buy’ ratings on the stock, with their price target suggesting up to 33% per cent potential upside on the counter. Infosys shares were quoting at Rs 1,489 per share, down 0.96 per cent on BSE intraday.

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Life Insurance Corporation of India (LIC), the newly listed firm with the seventh-largest market capitalisation on the BSE is likely to get the large-cap tag in the next review by AMFI (Association of Mutual Funds in India). A pre-emptive analysis of the semi-annual potential changes to the AMFI market cap categorization of stocks by Edelweiss has listed LIC along with Adani Wilmar as the potential stocks to get the large-cap tag. AMFI is expected to release the new categorisation in the first week of next month. 

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“Though the Nifty pulled back from 16,540 vicinity on anticipated lines, the ascent fizzled off without making much headway past Monday's peak, despite multiple attempts. The hurried long liquidation thereof, in the closing hour signifies why a revisit of 16,400 became a point of discussion yesterday. Favoured view for the day expects 16,580 to resist upside attempts, followed by a consolidation. While a resumption of the 17,200 without breaching 16,400 during this down move is the best case scenario, we are prepared not to switch sides until above 16,100, having abandoned the rectangular breakout in favour of a triangular one.”

~Anand James, Chief Market Strategist at Geojit Financial Services

Bharat Dynamics share price soared 7.6 per cent to Rs 844 on BSE on Wednesday, after the company received a contract worth Rs 2,971 crore from the Ministry of Defence. The state-owned defence company has signed a contract worth Rs 2,971 crore with the Ministry of Defence for supply of ASTRA MK-I Beyond Visual Range (BVR) Air to Air Missile and associated equipment to Indian Air Force & Indian Navy. Bharat Dynamics stock price has gained 15.5 per cent in five days, and more than doubled in six months. On a year-to-date basis, the stock has rallied 113 per cent, while it has jumped 126 per cent in one year. Read full story

Shares of Oil India (OIL) were up 5% to Rs 250 on the BSE in Wednesday’s trade, surging 15% in the past three trading days. The surge comes after the company reported strong earnings in March 2022 quarter (Q4FY22), as turnover and profit after tax (PAT) increased by 74% and 92%, respectively. Earlier, the stock of state-owned oil exploration and production company had hit a 52-week high of Rs 267.70 on October 1, 2021.

Shares of Bharat Dynamics (BDL) surged 7% to Rs 840.80 on the BSE in Wednesday’s trade, after the company signed a contract worth Rs 2,971 crore with Ministry of Defence, for supply of Astra Mark-I beyond visual range air to air missile (BVRAAMs) and associate equipments to Indian Air Force and Indian Navy. Earlier, the stock of state-owned aerospace and defence company had hit a record high of Rs 904.95 on April 19, 2022. In the past three months, BDL has outperformed market by zooming 87%, as compared to 1% decline in the S&P BSE Sensex.

Domestic stock markets enter the month of June after having witnessed a volatile May. “Fear in the market is at an extreme level of 2008-09 and 2020. Hence, the present decline is an excellent opportunity for the investors to accumulate the best outperforming stocks,” said analysts at Ashika Stock Broking. On the technical side, Ashika Stock Broking said that if a meaningful pull-back is to materialise, the NSE Nifty 50 index needs to decisively close above 16,500-16,650. “In all likelihood, the market is expected to honour the support zone of 15,400-15,600 in the short-term, as it happens to be the 61.8% retracement of CY21 rally,” they added. The brokerage firm has also picked three stocks to buy for the month that they believe can deliver as much as 15% returns. 

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“A clear trend is unlikely to emerge in the market in the near-term. At lower levels DIIs and retail investors will buy, pushing the market up; at higher levels FPIs will sell, pushing the market down. The dominant factor determining the market trend, globally, will be inflation and how far central banks, particularly the Fed, will go in hiking rates to contain inflation.

India's GDP growth for FY22 has come at 8.7% and the growth rate for FY23 is likely to be around 7. 2 % ( RBI estimates) making India the fastest growing large economy in the world for 2 years consecutively. India has the potential to sustain this growth momentum for many more years, translating into impressive earnings growth. This partly explains the premium stock valuations in India.

Investors can follow a cautious investment strategy in this uncertain context, buying high quality stocks which will benefit from growth recovery. Leading financials, IT, cement, telecom and segments of autos appear sound investment bets.”

~V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

Gold has headwinds in near term as high inflation will keep the US Fed hawkish and the US Fed believes that they can hike interest rates without getting the economy into recession. Gold has historically struggled when the Fed hikes interest rates higher aggressively. So in the near term, we may see gold prices trading in its range of $1800-$1860. In MCX, trend is likely to remain neutral to bearish as prices are over 200-day moving average but below the 20 and 50-day moving average. RSI_14 has once again dipped to 44 after touching 50 showing exhaustion. Read full story

eMudhra shares listed on the stock exchanges today at a premium to the IPO price amid the volatile market momentum. Shares of the company began trading on the NSE at Rs 270 per share, up 5.5% from the IPO price of Rs 243-256 apiece per share and on the BSE the stock debuted at Rs 271 apiece. The Rs 412.79 crore IPO was subscribed by investors earlier this month and was fully subscribed by all categories excluding retail investors.The company had a market capitalisation of Rs 2,115.76 crore on its market debut. Read full story

Total sales was up 1% at 2.75 lakh units against 2.71 lakh units (YoY). Domestic sales jumped 85% at 1.12 lakh units against 60,830 units (YoY). Exports went down 22% at 1.63 lakh units against 2.11 lakh units (YoY). Total sales at 2.75 lakh units in May 2022 against 4.19 lakh units in May 2019. 2-wheeler sales grew 4% at 2.49 lakh units against 2.40 lakh units (YoY). 3-wheeler sales went down 16% at 20,369 units against 31,308 units (YoY).

Bank Nifty was up 0.26% at 35,581. “Bank Nifty remained under pressure and was relatively resilient in comparison to broader market. “The index has to hold above the 35000 mark to see an up move towards 35800 & 36200 levels, whereas support can be seen at 34790 and 34480 levels,” said Axis Securities.

Bharat Dynamics shares soared over 5% after the company signed a contract with the defence ministry for building Astra Mark-1 beyond visual range air-to-air missiles (BVRAAMs) worth Rs 2,971 crores.

In the Nifty 50 pack, Asian Paints, NTPC, BPCL, Coal India, Tata Consumer Products were the top gainers, while Hindalco, Bajaj Auto, Dr Reddy's, ONGC and Sun Pharma were the laggards.

Titan, NTPC, HUL, Asian Paints, M&M, Tech M, Maruti,  and ITC were the top Sensex gainers, while Dr Reddy's, Kotak Bank, PowerGrid, Wipro and HDFC Bank were the laggards. 

The broader markets also opened in green with the BSE MidCap and SmallCap indices rising up to 0.77%.

Buying is seen in IT, metals and FMCG names, while power stocks are under pressure

Indian benchmark indices opened on a tepid note as the Street took note of India Q4 GDP numbers. The economy grew 4.1% in Q4, and 8.7%in FY22. While BSE Sensex was up 200 points at 55,777, NSE Nifty 50 held above 16,600 level.

Nifty likely to find support at around 16300 while 16850 is likely to act as resistance on the upside. Bank Nifty likely to find support at around 35200 while 36200 is likely to act as resistance level.

~IIFL Securities

Sensex flat above 55,550 levels

Nifty 50 advances above 16,550 levels

“Benchmark indices are expected to open on a flat to slightly negative note today as suggested by early trends on SGX nifty. On Tuesday Indian indices broke its three days green streak and ended the day in negative terrain. European markets were worst affected yesterday after the economic data showed record high levels of inflation in May, making interest rate hikes by the ECB all the more important. India’s GDP data beat estimates as the economy grew at 4.1% in the fourth quarter compared to 5.4% last year. Overall economy expanded 8.7% in FY22. On the technical front, the key resistance level for Nifty50 is 16,700 followed by 16750 and on the downside 16,500 and 16,400 will act as strong support. They key resistance level for bank nifty is 35,800 followed by 36,150 and on the downside 35,200 and 34,950 will act as strong support.”

~Mohit Nigam, Head – PMS, Hem Securities