Sensex, Nifty Fall Dragged By I.T., Banking Stocks; FPIs Stay Net Sellers

India's stock benchmarks nearly halved the day's losses, after getting off to a weak start, as global markets withered following the comments of U.S. Federal Reserve officials at Jackson Hole annual economic symposium. Federal Reserve Chair Jerome Powell hinted that the higher interest rate regime could continue for prolonged period as he reiterated the need for monetary stimulus to arrest the surge in inflation.

Information Technology, Banking and Metal stocks fell the most while FMCG stocks bucked the trend in a weak market.

The Sensex lost over 850 points to 57,972.62. The 30-stock gauge shed nearly 1,500 points to an intraday low of 57,367.47. The Nifty fell nearly 1.5% to 17,312.90. Today 11 stocks rose, 39 fell. Tech Mahindra, Infosys, Wipro, HCL Technologies and Tata Consultancy Services were among the top laggards, while Reliance Industries closed with 0.8% losses in a volatile session in which the company held its 45th AGM.

The broader indices outperformed their larger peers with the MidCap gauge falling 0.8% and SmallCap index losing 0.57%. Barring FMCG, Energy and Oil & Gas, all the other 16 sectoral indices compiled by BSE Ltd. declined with I.T. measure losing over 3.3%.

The market breadth was skewed in the favour of bears. About 1,453 stocks rose, 2,041 fell and 209 remained unchanged.

Overseas investors stayed net sellers for the second day in a row. They snapped out of three days of net buying to turn net sellers on Friday, last week.

The longest buying stretch by FPIs in this so far, lasted 13 days from July 28 to August 17.

As per data from the National Stock Exchange, foreign portfolio investors net sold equities worth Rs 561.22 crore today.

While, domestic institutional investors net sold equities worth Rs 144.08 crore today.

Institutions have net bought Rs 11,447.47 crore worth of equities so far in August and net sold equities worth Rs 36,992.22 as yet in 2022.

• Yield on the 10-year bond rose 6bps to 7.27% before easing off those levels to close at 7.25%.

Source: Bloomberg

• Rupee depreciated 26 paise to record low 80.13 during the session.

• The Indian currency recovered in the final two hours to almost erase all the losses to close at 79.97.

Source: Bloomberg

• Shares of Reliance Industries erased gains and is trading nearly 1% lower in a volatile session. The index heavyweight, however has outperformed the stock benchmark Nifty which fell 1.4%.

• Trading volume is nearly twice the 30-day average.

• Of the 38 analysts tracking the company, 31 maintain 'buy', five suggest 'hold' and three recommend 'sell'. The return potential of the stock is 10.9%.

Source: Bloomberg

• Reliance Industries announces new giga factory for power electronics.

• Reliance Acrylonitrile production to start next year.

• Solar giga plant in Jamnagar to start output in 2024.

• Jamnagar solar module factory to have 20 Giga Watt per year by 2026.

• Formed partnerships with Lithiumwerks, Faradion and Ambri

• Aim to start battery pack production by 2023.

• Reliance Industries in talks with partners for collaboration on electrolysers.

• Reliance Industries aims to start transition from Grey to Green Hydrogen by 2025.

• Reliance Industries to set up 20 Giga Watt solar generation capacity.

• REC Solar expanding capacity to 1.8 Giga Watt in Singapore.

• Reliance aims to raise battery pack producing capacity to 50 GWh by 2027.

• RIL To Invest Rs 75,000 Crore In O2C value chains.

• KG-D6 currently contributing 20% of India's gas production

• Reliance aims to add plants in Vinyl chain

• RIL to maximise oil-to-chemicals integration.

• Reliance to produce carbon fiber composites

• To invest to double PET recycling capacity

• RIL to triple vinyl chain capacity.

• PTA, PET plants targetted to be completed by 2026.

• Shares of Lupin rose after the company, in partnership with Pharmscience received tentative approval from U.S. FDA for its ANDA, Dasatinib tablets. These tablets are a generic equivalent of Sprycel tablets of Bristol-Myers Squibb company.

• The drug, has an estimated annual sales of $1,569 million in the U.S., according to IQVIA data as of June 2022.

• The drug is used to treat a certain type of chronic myeloid leukemia, a type of cancer in white blood cells.

Source: Bloomberg, Exchange filing

• Working with Google on ultra-affordable 5G phones.

• Jio 5G partners include Meta, Google, Intel, Microsoft.

• Reliance Jio announces partnership with Qualcomm.

• Working with Intel on several applications.

Mukesh Ambani, Chairman, Reliance Industries

• Hope to switch to hybrid mode for AGM next year.

• Uncertainty due to geopolitical tensions prevalent.

• See serious economic stress in many parts of the world

• RIL added 2,32,000 new jobs in the past year.

• About 421 million mobile broadband subscribers on Jio.

• Jio has more than 1.1 million route km fibre network.

• Saw acceleration in adoption of Jio Fiber.

• India still lags behind rest of the world in terms of fixed broadband.

• Jio Fiber has over 7 million connected premises in Indai

• Jio 5G services to build on success of 4G

• Jio 5G can connect 100 million homes.

• Reliance Jio to invest Rs 2 lakh crore for 5G network.

• Jio to deploy latest 5G version with no 4G dependence.

• Jio to launch 5G services by Diwali

• Jio 5G will be available across all cities and towns by December 2023.

• Jio to deliver pan-India 5G services by December 2023.

• Jio has developed end-to-end 5G stack.

• Jio alone has the 700 Mega Hertz spectrum.

Source: Bloomberg

Rupee depreciates 26 paise to record low 80.13 against the greenback, during the session.

• So far in 2022, Rupee has fallen every month against the U.S. dollar, longest monthly losing streak since the balance-of-payments crisis in 1991.

• The decline comes after U.S. Federal Reserve delivered hawkish commentary on monetary policy tightening at the Jackson Hole annual economic symposium on Friday.

• Santosh Meena, Head of Research at Swastika Investmart said that while the pressure on the Rupee is likely to continue, the Indian currency could see limited downside compared other currencies against the U.S. dollar due to less severe inflation and better-than-expected economic growth trajectory.

Source: Bloomberg

• ED Anil Kumar Sharma noted that the RBI is working on a Fraud Registry

• The registry will be complied with phone numbers, location and IP addresses used by fraudsters collected from banks.

Source: RBI media interaction

Shares of Syngene International jumped 2% in intraday trade, in a weak market to Rs 612.4 apiece.

• The company entered into an agreement to acquire renewable power by buying up to 26% stake ion O2 Renewable Energy II Pvt Ltd. for Rs 3 crore.

• O2 Reneable Energy is a special purpose vehicle formed by O2 Energy SG Pte, to generate and supply renewable power. Syngene International said that the acquisition is done to enhance renewable based power consumption. The shares will be acquired in one or two tranches.

• Of the 10 analysts tracking the company, nine maintain 'buy', one recommends 'hold' and two suggest 'sell'. The return potential of the stock is 13.7%.

Source: Exchange filing, Bloomberg

Shares of Indian Railways Catering and Tourism Corp. Ltd. or IRCTC Ltd. lost over 7.3%, the steepest intraday decline in nearly six months. The fall comes after the company withdrew appointment of a consultant for data monetisation of lndian Railways.

• The decision was taken after the government withdrew Personal Data Protection Bill, 2018, the ticketing arm of Indian Railways said.

• Trading volume is nearly twice the 30-day average. Shares of IRCTC have underperformed the stock benchmarks losing 3.5% compared to 1.2% fall for Sensex.

• Of the nine analysts tracking the company, three maintain 'buy', one suggests 'hold' and five recommend 'sell'. The return potential of the stock is -14.4%.

Source: Bloomberg

India's stock benchmarks extended decline, dragged by information technology, metals and banking stocks amid a broader market fall after U.S. Federal Reserve officials reiterated the need to continue with monetary tightening in order to curb inflation. The Sensex and Nifty 50 declined 1.4% and 1.3%, respectively.

The 30-stock gauge had lost over 804.30 points to hover around 58,800. The Nifty 50 traded around 17,300. Today nine of Nifty 50 stocks rose while 41 fell.

The broader indices almost mirrored the larger peers with MidCap gauge falling 1.1% and SmallCap measure slipping 0.8%. Sixteen of the 19 sectoral indices compiled by BSE Ltd. declined with IT index dragging the pack with a 3.42% fall.

The market breadth is skewed in the favour of the bears. About 2,190 stocks fell, 1,182 rose and 189 remained unchanged.

• ICICI Bank Coral RuPay Credit Card to be followed up with Rubyx and Sapphiro variants.

• ICICI Bank is the second largest credit card issuer in the country with 1.37 crore cards in force in July.

Source: ICICI Bank statement

Shares of API, bulk pharmaceutical chemicals, formulations and nutraceuticals maker Alembic Pharmaceuticals reversed opening losses and are trading nearly 2% higher.

• Today's rise comes after the company announced during market hours on Monday that it successfully completed the U.S.FDA Remote Regulatory Assessment (RRA) for its bioequivalence facility, bio-analytical division at Vadodara, without any observations. The Remote Regulatory Assessment was conducted between August 22 and August 26.

• The company also received final approval from the U.S. drug regulator for Chlorthalidone tablets USP, 25 mg and 50 mg. The approved ANDA is therapeutically equivalent to Hygroton Tablets of Sanofi Aventis.

• The drug is indicated for managing hypertension either as sole therapeutic agent or to enhance the effect of other anti-hypertensive drugs. The drug has an estimated market size of $37 million for twelve months ended June 2022, according to IQVIA. The company has an aggregate of 171 ANDA approvals from U.S. FDA (both final and tentative)

• Trading volume is twice the 30-day average. Of the 18 analysts tracking the company, two maintain 'buy', six suggest 'hold' and 10 recommend 'sell'. The return potential of the stock is 3.2%.

Source: Exchange filing, Bloomberg

U.S. FDA has issued Form 483 with one observation after completion of inspection at Aurobindo Pharma's subsidiary Aurolife Pharma's Raleigh Plant in North Carolina.

• The North Carolina plant is established for manufacturing metered dose inhalers (MDI) and derma products. So far, the unit has filed two derma products and one MDI product.

• Aurobindo Pharma said that the observation by U.S. drug regulator is procedural in nature and there were no data integrity issues. The company also said it will work close with U.S. FDA to address the observation at the earliest.

Source: Exchange filing

Global investment firm KKR has launched Highways Infrastructure Trust, a roads infrastructure investment trust.

• HIT is KKR’s third InvIT in India, in addition to Virescent Renewable Energy Trust and India Grid Trust.

• HIT’s initial portfolio comprises six road assets with a length of over 450 kilometres across six states. The assets include a diversified mix of toll and annuity roads.

• HIT is considering a pipeline of acquisition targets, including through its sponsor and seeks to invest in high-quality assets, including through bolt-on acquisitions.

Source: Press release

Shares of defence equipment manufacturers, service providers and ship building firms gained in trade with Mazagon Dock surging 12% to a record.

The rise comes after the Defence Ministry approved the third positive indigenisation list (PIL) of 780 strategically important Line Replacement Units/Sub-Systems/Components with a timeline. Beyond the stipulated timelines, the LRUs/Components will only be procured from the domestic industry, according to PIB release on Sunday.

The list is in continuation of two PILs approved earlier in December 2021 and March 2022. The three llists contain 2,500 items which are already indigenised and 458 items which will be indigenised within the threshold timelines.

The indigenisation of the items will be done through different routes under 'Make' Category, which focuses on enhancing self-reliance to bolster the economy and reduce import dependence of defence PSUs, according to Defence Ministry.

Source: PIB, Bloomberg

Shares of engineering services provider RITES Ltd. jumped over 4%, most in over five weeks to a 10-month high and are on track to gain for the third day in a row.

• Trading volume is more than 16 times the 30-day average. The relative strength index is 82, suggesting that the stock may be overbought.

• The rise comes after the company announced post market hours on Friday that it secured new business order with JV partner for redevelopment of Kollam Railway Station for Rs 361.18 crore from Southern Railway, Ernakulam, Kerala. The share of RITES in the order is 51%.

• Of the eight analysts tracking the company, seven maintain 'buy', one suggests 'hold'. The return potential of the stock is 3.6%.

Source: Bloomberg, Exchange filing

• NSE Nifty IT index fell over 4.7% during the session, the steepest intraday decline in over three months since May 19 when the information technology measure lost 6%.

• All the 10 constituents logged losses with Tech Mahindra, Infosys, Mindtree, L&T Infotech and HCL Technologies shedding over 3.5%.

Source: Bloomberg

Shares of Sansera Engineering rose over 4.5% in a weak market, the most in six weeks to Rs 709 apiece.

• The rise comes after the company bagged repeat order worth Rs 50.8 crore (annual) from a marquee North American manufacturer of EV passenger cars, the company said in an exchange filing before market hours on Monday. The order pertained to precision forged and machine components for passenger vehicles

• Sansera Engineering said that the mass production of these parts will commence during FY2023-24, after successful trials. Sansera Engineering has already been awarded an order worth Rs 49.7 crore from the same customer. With this new order, the annual order book of Sansera Engineering with the customer rose above Rs 100 crore.

• Trading volume on the stock is nearly quadruple the 30-day average. All the four analysts tracking the rocker arms, gear shifter forks, crank shaft assemblies' maker for automotive and aerospace industries' stock maintain 'buy'. The return potential of the stock is 31.9%.

Source: Exchange Filing, Bloomberg

Shares of Jubilant Pharmova rose 4.24% in a weak market. This is the most the shares have gained in over seven weeks since July 7.

• The rise comes after the company announced post market hours on Friday that its subsidiary Jubilant Draximage received Establishment Inspection Report with Voluntary Action Indicated (VAI) status from U.S. FDA for its radiopharmaceuticals manufacturing facility at Montreal Canada.

• The U.S. drug regulator conducted the inspection between June 6 and June 10, 2022.

• Trading volume is 13 times to 30-day average. Of the seven analysts tracking the company, three maintain 'buy', two suggest 'hold' and two recommend 'sell'. The return potential of the stock is 42.9%.

Source: Exchange filing, Bloomberg

Shares of Reliance Industries Ltd. withstood the selling pressure, outperforming the benchmark Nifty while group companies Reliance Industrial Infra, TV18 Broadcast and Network18 declined in a weak market, amid fall in global equities after U.S. Federal Reserve officials emphasised the need to continue with monetary tightening in the central bank's efforts to rein in inflation. The comments have spurred a decline in global equities, ahead of RIL 45th Annual General Meeting. RIL's chairman Mukesh Ambani is expected to make announcements on listing or strategic sale of key businesses, roadmap for green energy transition, in today's meeting.

RIL's AGMs are known for featuring strategic announcements. Listing timeline for Reliance Jio Infocomm, stake sale in new energy businesses, comments on 5G rollout and monetisation plans are awaited.

JM Financial believes that the green energy could power RIL's growth in next five to seven years while HSBC Broking anticipates concrete timelines for various projects in new energy business.

Shares of RIL have gained over 10% in 2022 compared to 0.5% rise for Sensex. Of the 39 analysts tracking the company, 31 maintain 'buy', five suggest 'hold' and three recommend 'sell'. The overall consensus price of analysts tracked by Bloomberg implies an upside of 10.6%.

Source: Bloomberg, Brokerage notes

India's stock benchmarks declined, dragged by broad based losses across sectors led by information technology stocks. The sharp fall comes after U.S. Federal Reserve officials emphasised the need to continue with monetary tightening in the central bank's efforts to rein in inflation. The comments have spurred a decline in global equities.

Both the Sensex and Nifty fell the most in over two months since June 13. The S&P BSE Sensex shed over 2% to 57,627.47. The NSE Nifty 50 also declined by similar magnitude to 17,204.85. Today 49 of the Nifty 50 stocks logged losses with Britannia being the sole exception.

The broader indices almost mirrored their larger peers. All 19 sectoral indices compiled by BSE Ltd. fells with Information Technology gauge tumbling over 4%.

The market breadth is skewed in the favour of bears. About 542 stocks rose, 2,256 fell and 128 remained unchanged.

JUST IN

• The deal pertains to providing high end engineering services for the company's suite of infotainment consoles for BMW's hybrid vehicles.

• L&T Technology will provide services in areas of software build, integration, infotainment validation and defect management.

Source: Exchange filing

• Yield on the 10-year bond rose 4bps to 7.26%, at the open.

Source: Bloomberg

• Indian currency depreciated 21 paise (0.27%) to record low 80.09 against the U.S. dollar.

• The fall comes amid a selloff in Emerging Asian currencies after U.S. Federal Reserve Chair Jerome Powell's comments flagging the need for restrictive monetary policy for some time to tackle rise in inflation.

Source: Bloomberg

• NDTV Founders Radhika and Prannoy Roy informed the company that the promoter group vehicle RRPR Holding has asked SEBI whether its order on November 2020 restricted the conversion of warrants issued to VCPL into equity shares of RRPR Holding.

• Adani Enterprises has sought to convert warrants issued to it in 2009 to take an indirect 29.2% stake in NDTV.

Source: Exchange filing

Disclaimer: Adani Enterprises is in the process of acquiring a 49% stake in Quintillion Business Media Ltd., the owner of BQ Prime.

• Shares of Indian digital payment service providers are in focus after Finance Minister said that the time was not right to impose charges on such transactions, reported Mint newspaper, citing news agency ANI report.

• RBI had earlier sought feedback from people on various charges proposed in payment systems.

• In focus: One 97 Communications, SBI Cards, HDFC Bank, Infibeam Avenues.

• Tamilnad Mercantile Bank’s IPO to run from September 5 to September 7.

• The IPO consists of a fresh issue of 1.58 crore shares.

• Proceeds of the issue will be used to augment the bank’s Tier-1 capital base.

Source: Draft red herring prospectus

• U.S. Dollar Index at 109.12

• U.S. 10-year bond yield at 3.08% on Friday

• Brent crude down 0.4% to $100.6 per barrel

• Nymex crude at $93.05 per barrel

• SGX Nifty down 1.2% to 17,444 as of 6:05 a.m

• Bitcoin down 1.4% to $19,706.7

• Alkem Lab: Macquarie initiates coverage of the stock with 'underperform'; target price set at Rs 2,475, an implied return of 15%.

• Ipca Lab: Macquarie initiates coverage of the stock with 'underperform', target price set at Rs 785, an implied downside of 14%.

• Zydus Lifesciences: Macquarie initiates coverage of the stock with 'underperform', price target set at Rs 315, an implied downside of 18%.

• Aurobindo Pharma: Macquarie initiates coverage of the stock with 'underperform', price target set at Rs 475, an implied return of -14%.

• Cipla: Macquarie reinstated coverage with 'outperform', target price set at Rs 1,205, an implied upside of 18%.

• Dr. Reddy's: Macquarie reinstated coverage with 'outperform', target price set at Rs 4,805, an implied upside of 14%

• Lupin: Macquarie reinstated coverage with 'outperform', target price set at Rs 790, an implied upside of 21%

• Sun Pharma: Macquarie reinstated coverage with 'outperform', target price set at Rs 1,100, a return potential of 25%.

Source: Bloomberg

• UltraTech: The company commissioned cement capacity of 1.3 MTPA at Dalla Cement Works, Uttar Pradesh taking the company’s total cement manufacturing capacity in India now stands at 115.85 MTPA.

• RITES: The company secured order with for redevelopment of Kollam Railway Station for Rs. 361.18 crores from Southern Railway, Ernakulam, Kerala. The company’s share in the order is 51%.

• SRF: The company commissioned second BOPP Film Line & Metallizer at Indore for an aggregate cost of Rs 446 crore.

• Cipla: Says U.S. FDA made six observations on Goa facility. Company is working with U.S. FDA to address the issues within stipulated time.

• Mahindra & Mahindra: Says SsangYong Motor 'Rehabilitation Plan' approved.

• Manappuram Finance: To consider raising funds via debt in September.

• NDTV: Shifts AGM date to September 27 from September 20.

• Syngene International: To buy up to 26% stake in O2 renewable energy II for Rs 3 crore.

• Tata Steel: Signs pact with Punjab for long-PDTS steel plant, to have scrap-based electric arc furnace.