Sensex, Nifty Decline For Third Day In A Row Ahead Of RBI's Rate Decision

India's stock benchmarks fell for the third day in a row, dragged by losses in consumer durables, information technology, capital goods, fmcg and realty stocks. The rise in Covid-19 cases weighed on consumption-linked stocks. Focus shifts to RBI's rate decision due to be announced on Wednesday as the central bank is expected to dial in rate hikes to arrest the uptick in inflation amid rise in crude prices.

The Sensex lost 1.02% to 55,107.34. The 30-stock gauge shed nearly 800 points to an intraday low of 54,882.41. The Nifty declined by similar magnitude to 16,416.35. Today 14 stocks rose, 36 declined. Consumption-linked stocks like Titan, Britannia, HUL, Nestle were among the top losers while ONGC gained over 5% amid rise in crude oil prices.

The broader indices outperformed their larger peers with both the midcap and small gauges losing nearly 0.7%. Thirteen of the 19 sectoral indices compiled by BSE Ltd. declined with Consumer Durables index falling nearly 3%.

The market breadth was skewed in the favour of bears. About 1,292 stocks gained, 2,000 declined and 126 remained unchanged.

• Rupee fell 0.14% to 77.74 against dollar, just six paisa away from record low of 77.80.

• Indian currency trimmed some of the losses to close at 77.71.

Source: Bloomberg

• 10-year bond yield rose 4bps to 7.54%, during the session, a three-year high.

• Yield on the 10-year bond eased off those levels to 7.51%, highest close since 2019.

• The rise in yields comes ahead of RBI's rate decision to be announced tomorrow and amid surge in crude oil prices.

Source: Bloomberg

Shares of construction services provider HG Infra Engineering rose over 5.6%, the most in over two weeks.

• The rise comes after the company received LoA from Adani Road Transport for development of six-land greenfield Ganga Expressway in Uttar Pradesh.

• The design length is 151.70 kilometres. The contract price is Rs 4,970.99 crore.

• The project is to be completed 820 days from the appointed date. Trading volume is quadruple the 30-day average. Share price rose above 50-day simple moving average, indicating potential upward price momentum.

• All 15 analysts tracking the company maintain 'buy'. The return potential of the stock is 45.8%.

Source: Exchange filing, Bloomberg

Shares of NMDC fell over 2.6% to Rs 121.35, within touching distance of 52-week low.

• The decline comes as the company informed the bourses that it could not hold meeting of its shareholders as planned on June 7.

• The meeting was called to approve a scheme of arrangement between NMDC Ltd. (demerged company) and NMDC Steel Ltd (Resulting company).

• The meeting has been postponed to June 28.

Source: Exchange Filing

• Edtech startup Physics Wallah has raised $100 million in its first funding round at a valuation of over $1 billion.

• Westbridge and GSV Ventures financed the round at a post-money valuation of $1.1 billion.

Source: Company statement

Aurobindo Pharma has received final approval from U.S. FDA to manufacture and market drug used to treat prostrate cancer.

• Eugia Pharma, Aurobindo Pharma's wholly owned subsidiary received the approval for Leuprolide Acetate injections. T

• The product will be launched this month. The drug has an estimated market size of $83 million for twelve months ending April 2022.

• Shares of Aurobindo Pharma fell over 2% in intraday trade before trimming some of the losses. The stock is on course to fall for fourth day.

Source: Exchange filing

• Government has called off the present EoI process for strategic divestment of BPCL, the company said in an exchange filing on Tuesday.

• All the activities in connection with the divestment including the data room are being discontinued.

Source: Exchange filing

India's stock benchmarks declined, dragged by losses in consumer durables, information technology, banking, fmcg, realty stocks, ahead of the RBI's rate decision due on Wednesday. The surge in oil prices, along with rise in Covid cases weighed on consumption-linked stocks.

The Sensex fell over 500 points (over 1%) to 55,124.36. The 30-stock gauge slipped below 55,000 to an intraday low of 54,882.41. The Nifty also declined by similar magnitude and tested 16,400.

The MidCap index almost mirrored its larger peers while the SmallCap gauge outperformed, losing 0.6%. Fifteen of the 19 sectoral indices compiled by BSE Ltd. declined with Consumer Durables index falling 3%.

The market breadth was skewed in the favour of bears. About 1,164 stocks rose, 1,986 declined and 122 remained unchanged.

The optimum path to scale up housing finance is to be housed within a banking structure, says HDFC's Deepak Parekh, on HDFC-HDFC Bank merger

• The pool of resources for lending will be significantly larger and at lower costs.

• From a regulatory perspective, it is prudent for all large providers of housing finance to operate on a level playing field, with the same rules.

• Remain respectful of all our regulators and are confident that the outcome will be judicious and fair at a systemic level.

• Only ask of our stakeholders is for your patience as we navigate through the complexities of this transaction.

Source: Deepak Parekh letter to shareholders

Shares of Hindustan Aeronautics rose over 2.8% to a record high. Trading volume is more than thrice the 30-day average. The relative strength index is 74, suggesting the stock may be overbought.

• The rise comes after Defence Ministry gave its approval to procure range of indigenous equipment worth Rs 76,390 crore.

• Shares of defence-links firms like Bharat Dynamics, Paras Defence, Zen Tech and Bharat Electronics advanced in a weak market.

Source: Bloomberg, Exchange filing

LIC Falls To Record Low; Stock Extends Longest Losing Streak Since Debut

• Shares of LIC extended decline for the sixth day to a record low Rs 757.1 apiece. The market capitalisation slumped further after falling below Rs 5 lakh crore on Monday.

• Over the last six days, the stock has lost over 9% with the bulk of the decline coming this week.

• The relative strength index on the stock is 19, suggesting that it is oversold.

• The stock which debuted on bourses on May 17 has lost 13% so far, compared to 1% gain for benchmark NSE Nifty 50 index.

• Only two analysts have initiated coverage of the stock so far.

• The anchor lock-in period remains 30 days as SEBI made the new lock-in rules applicable after June 30.

• The anchor lock-in period for LIC ends on June 10. About 5.9 crore shares have been locked in due to anchor allocation.

Source: Bloomberg

(The number of shares locked-in has been corrected and updated)

Shares of PB Fintech lost nearly 10%, the steepest decline in four months since Feb. 11.

• The fall comes after the company informed bourses on Monday that its Chairman and CEO Yashish Dahiya intended to sell up to 37,69,471 shares via bulk deals on the stock exchanges.

• According to Bloomberg data, about 3.74 million shares (aggregating to 0.8% of equity changed hands in a large trade on NSE on Tuesday.

• Trading volume is 37 times the 30-day average.

Source: Exchange filing, Bloomberg

• Rates hiked with effect from Tuesday

• One year MCLR rate raised to 7.85%, from 7.5% earlier

Source: HDFC Bank website

Shares of Mangalore Refinery & Petrochemicals Ltd. rose over 17.6%, extended gains for the third day.

• The stock has added 25% in three sessions. Trading volume is nearly quadruple the 30-day average. The relative strength index of the stock is 74, suggesting it may be overbought.

• The rise in Mangalore Refinery and other refiners like Chennai Petroleum comes amid Singapore Gross Refining Margins rose to record $25.2 per barrel and surge in global crude oil prices.

• Chennai Petroleum jumped over 16%, while RIL, BPCL, HPCL and IOCL were little changed in a weak market

• The Singapore GRM is the Asian benchmark.

Source: Bloomberg

India's stock benchmarks opened lower, dragged by losses in consumer durables, banking, auto, I.T. and realty stocks. The decline in consumption-linked stocks comes amid a rise in covid cases.

The S&P BSE Sensex fell nearly 1% to 55,143.20. The NSE Nifty 50 also declined by similar magnitude to 16,410.70.

The S&P BSE MidCap almost mirrored its larger peers, while S&P BSE SmallCap outperformed Sensex and Nifty, losing 0.5%. Barring Energy and Oil & Gas indices, all the other 17 sectoral gauge fell, with Consumer Durables index losing over 2.5%.

The market breadth is skewed in the favour of bears. About 968 stocks gained, 1,239 declined and 106 remained unchanged.

• Indian currency depreciated 0.14% to 77.74 at the open. Rupee had a hit a record low 77.80 on May 17.

Source: Bloomberg

• Yield on the 10 year bond rose 3bps to 7.53%, highest since 2019.

• The rise comes amid surge in crude oil prices and ahead of RBI's MPC decision due on Wednesday.

Source: Bloomberg

Shares of NBFCs are in focus after RBI said it asked shadow lendersto set aside 2% of loan amount as provisions for standard assets. The rule will be effective from October 1.

In Focus: Bajaj Finance, Muthoot Finance, M&M Financial, L&T Finance, Aditya Birla Capital

Source: RBI, Bloomberg

Zydus Life has received final approval from U.S. FDA to market Adapalene and Benzoyl Peroxide Topical Gel. The combination is used to decrease the number and severity of acne pimples.

The drug which had a market size of $195 million in the 12-month period ended April 2022, will be manufactured at the company's Ahmedabad facility.

Source: Exchange Filing

• SBI Cards and Payments: The bank approved raising Rs 2,500 crore through non-convertible debentures.

• Bharti Airtel: Subsidiary company Nxtra Data has acquired 11.696% stake in Avaada MHAmravati, a special purpose vehicle formed for the purpose of owning and operating the captive power plant, for Rs 5.11 crore.

• PB Fintech: Chairman and Chief Executive Officer Yashish Dahiya will sell 37,69,471 equity shares via bulk deals on the stock exchanges. There is no further sale of shares planned beyond these shares, at least for 1 year.

• HLE Glascoat: The company approved split of existing share of Rs 10 each into five shares of Rs 2 each. It also approved raising Rs 350 crore through equity shares or any other instruments convertible into equity shares or any other eligible securities through qualified institutions placement, private placement/ public issue of equity, preferential issue or through any other mode.

• NMDC: The company fixed price of lump of iron ore at Rs 4,400 per ton. This price doesn’t include royalty, DMF , NMET, cess, forest permit fee and other taxes.

• IDBI Bank: IDBI may be allowed to merge with private bank after stake sale by government, LIC, reports Business Standard.