Sensex, Nifty Fall In Volatile Session Dragged By Metals, Energy Stocks

• Yield on the 10-year bond added 3bps to 7.39%.

• The 10-year yield added 6bps to 7.42% during the session before easing off the high.

Source: Bloomberg

• Indian currency closed at 77.52, the Rupee fell to 77.71 during the session.

Source: Bloomberg

India's stock benchmarks declined after logging 1% gains in intraday trade, dragged by metal stocks, following government's decision to impose/hike export duty on 11 intermediaries. Energy stocks also fell, while Auto stocks rose, on the flipside, aided by government's decision to slash excise duty in petrol and diesel.

The Sensex shed 0.1% to 54,288.61. The 30-stock gauge added over 600 points (1.14%) to 54,931.30 in intraday trade. The Nifty lost 0.32% to 16,214.70, exactly 200 points off the day's high at 16,414.70. Tata Steel contributed the most to the index decline, decreasing 12.6%. JSW Steel had the largest fall, losing 13.2%. About 22 of 50 shares fell, while 28 rose.

The S&P BSE MidCap almost mirrored the Nifty, while the S&P BSE SmallCap underperformed, falling 0.64%. Eleven of the 19 sectoral indices compiled by BSE Ltd. declined, with S&P BSE Metal tumbling 8.3%.

The market breadth was skewed in the favour of bears. About 1,423 stocks advanced, 1,985 declined and 169 remained unchanged.

"The government and RBI are making persistent efforts to moderate future inflation. Government fiscal measures like a hike in custom duty on steel and similar steps on other products in the future will help to control inflation. However, the hawkish monetary and fiscal measures adopted by RBI & Government will have a cascading effect on market & economy in the short to medium-term", Vinod Nair, Head of Research at Geojit Financial Services wrote in a note.

Shares of battery maker Amara Raja Batteries fell over 5.8%, the steepest decline in three months since Feb. 24.

The decline comes after the company reported net income that missed average analyst estimate for the quarter-ended March, post market hours Friday.

Q4 FY22 (Consolidated, YoY)

• Revenue up 3.73% at Rs 2,180.96 crore (Bloomberg Consensus Estimate: Rs 2,430 crore)

• EBITDA fell 30.41% at Rs 220.18 crore

• EBITDA margin at 10.1% vs 15.05%

• Net profit down 47.8% at Rs 98.85 crore (Estimate: Rs 152 crore)

• Recommended dividend of Rs 0.5 per share

Trading volume is nearly five times the 30-day average. Of the 18 analysts tracking the company, nine maintain 'buy', six suggest 'hold' and three recommend 'sell'. The return potential of the stock is 27.9%.

Analysts cut FY23-24 margin estimate after the earnings to factor in the sluggishness of demand in automotive OEM division.

Source: Exchange filing, Bloomberg, Brokerage notes

European markets open higher. German shares rose after Siemens Energy AG makes $4.3 billion Gamesa Takeover offer.

Source: Bloomberg

• Indian currency depreciated 0.21% to 77.71, during the session.

• Rupee had snapped a five-day losing streak on Friday.

Source: Bloomberg

• 10-year bond yield added 6bps to 7.42% during the session.

• Yield on the 10-year bond has eased off those levels to 7.37%.

Source: Bloomberg

India's stock benchmarks advanced, aided by gains in auto, banking, information technology, consumer durables and realty stocks. Metal stocks tumbled as government imposed fresh export duty on 10 items and raised duty on one intermediate. Auto stocks rose as a consequence of government's excise duty cut in petrol, diesel over the weekend,

The Sensex gained 0.9% to 54,813.67. The Nifty rose by similar magnitude to 16,381.15. About 38 of the Nifty 50 stocks advanced, while 12 fell.

The S&P BSE MidCap almost mirrored the Sensex and Nifty while S&P BSE SmallCap underperformed, rising 0.5%. Fourteen of the 19 sectoral indices compiled by BSE Ltd. advanced with S&P BSE Auto adding 2.4%. Of the flipside, the S&P BSE Metal lost 7.21%.

The market breadth is skewed in the favour of bulls. About 1,763 stocks advanced, 1,522 declined and 170 remained unchanged.

Tata Power and Tata Motors have announced that they will partner to develop 7 MWp solar rooftop project in Tata Motors' Passenger Vehicle plant in Pune.

• This is the third phase of the 17 MWp on-site solar project developed by the two company. 10 MWp solar rooftop has been installed already.

• With this, Tata Power will house India's largest on-site solar project.

• The project is estimated to generate 23 million units of electricity, mitigating 5.23 lakh tonnes of carbon dioxide.

Source: Exchange filing

Shares of Automobile firms gained on the back of government's decision to cut excise duty on petrol and diesel.

• The import duty on key raw materials have been reduced as well.

• NSE Nifty Auto index is the top sectoral gainer in today's session. Thirteen of the 15 constituents advanced.

• Jefferies says that the reduction in excise duty on petrol, diesel will reduce pump prices by 7-8%, which is a sentimental positive for the sector. Motilal Oswal also believes that fuel price cut will provide relief to customers and aid demand.

Source: Bloomberg, Brokerage notes.

Shares of Jet Airways India Ltd. rose 5% after the company was re-issued air operator certificate by Directorate General of Civil Aviation.

• The certificate, issued post market hours on Friday, pertains to commercial flights. The development sets the stage for the grounded Jet Airways to fly again as the air operator certificate is the last regulatory step.

• Jet Airways was barred from operating three years ago on April 2019. The company then went through insolvency proceeding at NCLT following which the court approved the resolution plan of Jalan-Kalrock consortium in June 2020.

• The company is scheduled to report earnings for the quarter-ended March on May 26.

• The relative strength index of the stock is 77, suggesting it may be overbought.

Source: Bloomberg, Exchange filing

Shares of Infosys rose nearly 2% a day after the company reappointed Salil Parekh as Chief Executive Officer and Managing Director from July 1, 2022 to March 31, 2027.

• Salil Parekh has been CEO and MD of Infosys since January 2018.

• The reappointment is subject to shareholders' approval.

• Of the 50 analysts tracking the company, 39 maintain 'buy', seven suggest 'hold' and four recommend 'sell'. The return potential of the stock is 34.2%.

Source: BSE, Bloomberg

• 10-year bond yield rose 6bps to 7.42% during the session.

• Yield rose to 7.49% on May 9, highest level since 2019.

• The rise in yield comes after the government cut taxes of fuel to tackle inflation. The tax cuts could potentially add Rs 1 lakh crore to an already record borrowing plan.

Source: Bloomberg

• Indian currency depreciated 0.21% to 77.71 during the session.

• Rupee hit a record low 77.80 on May 17.

Source: Bloomberg

10-year secured, redeemable NCD issue to open on May 24.

• Issue size at Rs 500 crore with option to retain oversubscription of Rs 11,500 crore.

• Object for the issue is to augment long term resources of the corporation.

Source: BSE Notification

India's stock benchmarks opened higher, aided by gains in auto and consumer durables stocks. Metal stocks tumbled with the NSE Nifty Metal Index losing over 6% in opening minutes.

The Sensex opened 0.25% higher before paring gains. The NSE Nifty 50 also was little changed to 16,233.55.

The S&P BSE MidCap almost mirrored its larger peers while the S&P BSE SmallCap underperformed, losing 0.25%. Eleven of the 19 sectoral indices compiled by BSE Ltd. advanced with S&P BSE Auto losing over 2%. On the flipside, the S&P BSE Metal fell over 7%.

The market breadth was skewed slightly in the favour of bulls. About 1,282 stocks advanced, 1,182 declined and 134 remained unchanged.

Shares of textile firms, yarn and apparel makers are in focus CNBC-TV18 reported that production in small, spinning mills has been halted due to unprecedented hike in cotton prices, citing a statement by The South India Spinners Association.

• The Association has about 450 mills in small and medium scale from across Tamil Nadu

• In Focus: Yarn makers like Nitin Spinners,Himatsingka Seide, Apparel, textile firms like Page Industries, KPR Mill, Welspun India, Lux Industries, Rupa, Raymond Trident.

Source: CNBC-TV18, The South India Spinners Association

• Steel Authority of India

• Zomato

• Bharat Electronics

• Divi’s Laboratories

• HLE Glascoat

• Ramco Cements

• The New India Assurance Co.

• Graphite India

• BirlaSoft

• Kaveri Seeds

• National Highways Infra Trust

• Shilpa Medicare

• Sansera Engineering

• HG Infra Engineering

• Rolex Rings

• Rupa & Co.

• Dollar Industries

• Thomas Cook India

• Action Construction Equipment

• Infosys: The Bengaluru-based IT services firm has reappointed Salil Parekh as CEO and MD for a period of five years.

• UPL: The company completed buyback of 1.33 crore equity shares at Rs 813.92 apiece aggregating to Rs 1,093.73 crore, representing 99.43% of maximum buyback size.

• Jet Airways: The company has been re-issued air operator certificate by Directorate General of Civil Aviation for commercial flights.

• Zydus Lifesciences: The company’s promoters may participate in the buyback of 1.15 crore shares representing 1.13% of total equity shares at price of Rs 650.