Sensex drops 617 pts, Nifty ends below 17,000; NSE VIX crosses 21 mark

25 Apr 2022 , 05:12 PM

Benchmark indices declined for the second trading session on Monday amid weak global cues. The Nifty settled with deep losses below the 17,000 mark. Selling was wide spread. However, private banks stocks sailed through the tide after ICICI Bank reported good Q4 numbers. Fears of an aggressive rate hike by the US Fed, COVID-related lockdowns in China, and the ongoing Ukraine-Russia war dented investors sentiment.

The barometer index, S&P BSE Sensex slumped 617.26 points or 1.08% at 56,579.89. The Nifty 50 index lost 218 points or 1.27% to 16,953.95. The 50-unit index has corrected 2.52% in two straight sessions.

The broader market tumbled. The S&P BSE Mid-Cap index slipped 1.86% while the S&P BSE Small-Cap index fell 1.88%.

The market breadth was weak. On the BSE, 1,037 shares rose while 2,494 shares fell. A total of 143 shares were unchanged.

The NSEs India VIX, a gauge of markets expectation of volatility over the near term, soared 15.82% to 21.2575.

COVID-19 Update:

India reported 2,541 fresh COVID-19 cases on Monday, marginally lower than 2,593 infections recorded the previous day, the Union Health Ministrys data showed. The total number of active cases of the country now stands at 16,522. As many as 30 deaths were reported Monday, taking the death toll to 5,22,223.

The active cases comprise 0.04% of the total infections, while the national COVID-19 recovery rate was recorded as 98.75%. An increase of 649 cases has been recorded in the active COVID-19 caseload in a span of 24 hours. The daily positivity rate was recorded as 0.84% and the weekly positivity rate as 0.54%. The number of people who have recuperated from the disease surged to 4,25,21,341, while the case fatality rate was 1.21%.

Economy:

Indonesia announced its plans to ban export of palm oil from 28 April 2022. The country is the worlds top palm oil producer while India is the worlds largest importer of edible oils, and specifically the highest importer of palm oil and soyabean oil. The media reported that the ban on palm oil could trigger further inflation worries for India.

Numbers to Track:

The yield on the 10-year benchmark federal paper fell to 7.043% from its previous close of 7.167%.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 76.6800, compared with its close of 76.4200 during the previous trading session.

MCX Gold futures for 3 June 2022 settlement lost 0.73% to Rs 51,879.

The US Dollar index (DXY), which tracks the greenbacks value against a basket of currencies, was up 0.44% to 101.67.

In the commodities market, Brent crude for June 2022 settlement fell $4.27 or 4% at $102.38 a barrel.

Global Markets:

The US Dow Jones index futures were down 240 points, indicating a weak opening in the US stocks.

Shares in Europe and Asia tumbled on Monday as the sell-off in global markets continued into the new trading week. Investors in Europe digested the result of the French presidential election on Monday, and monitoring the latest developments in Ukraine.

Frances Emmanuel Macron has comfortably beaten his rival Marine Le Pen in Sundays election, securing a second term as president on his pro-business and pro-EU agenda.

Russias invasion of Ukraine has entered its third month on Sunday. The conflict that has killed thousands and led to the worst refugee crisis Europe has seen since World War II. The war will end only if Russian troops fully withdraw from the country, Ukrainian Prime Minister Denys Shmyhal further stated.

Buzzing Segment:

The Nifty Bank index rose 0.1% to 36,082.35. The index fell 2.10% in the previous session.

HDFC Bank (up 1.06%), Bandhan Bank (up 0.85%), Federal Bank (up 0.84%), AU Small Finance Bank (up 0.82%), Axis Bank (up 0.38%) and Kotak Mahindra Bank (up 0.11%) advanced.

ICICI Bank added 0.98%. The private lenders standalone net profit rose 59.42% to Rs 7,018.71 crore on 14.44% increase in total income to Rs 27,412.32 crore in Q4 March 2022 over Q4 March 2020. Net interest income (NII) increased by 21% year-on-year to Rs 12,605 crore in Q4 FY22. Net interest margin was 4% in Q4 FY22 compared to 3.84% in Q4 FY21 and 3.96% in Q3 FY22. The banks provisions and contingencies (excluding tax provisions) fell 62.93% to Rs 1,068.95 crore in Q4 FY22 over Q4 FY21. The ratio of gross NPAs to gross advances stood at 3.60% as on 31 March 2021 as against 4.13% as on 31 December 2021 and 4.96% as on 31 March 2020. The ratio of net NPAs to net advances stood at 0.76% as on 31 March 2021 as against 0.85% as on 31 December 2021 and 1.14% as on 31 March 2020.

Stocks in Spotlight:

Religare Enterprises (REL) surged 10.75% after the company said it has paid Rs 5.41 crore to market regulator Sebi to settle its past cases.

Intellect Design Arena rose 2.23% after the company said it has partnered Microsoft to establish corporate banking transformation on Cloud. Intellect Global Transaction Banking (iGTB) will integrate Microsoft Cloud for Financial Services to accelerate cloud adoption and digital transformation initiatives of corporate banks.

Cummins India fell 5.99% after the government amended rules mandating power distribution companies to supply 24×7 electricity in metros and large cities to dissuade diesel generation in five years. The Union Ministry of Power issued a gazette notification to amend the Electricity (Rights of Consumers) Rules, 2020. In view of the increasing pollution level particularly in the metros and the cities with a population 1,00,000 and above, the distribution licensee shall ensure 24×7 uninterrupted power supply to all the consumers, so that there is no requirement of running the diesel generator sets, the notification said.

Cyient fell 1.43%. The company has signed definitive agreements to acquire Finland-based Citec, an international plant and product engineering services company serving customers across the energy, process, oil and gas, and manufacturing industries. Cyient will acquire Citec at an enterprise value of 94 million euros (over Rs 770 crore) on a debt free, cash free basis. The acquisition will be EPS accretive, Cyient said in a statement. The all-cash transactions are expected to be completed on or before 10 May 2022.

Hikal skid 5.88% after Maharashtra Pollution Control Board (MPCB) on 22 April 2022 ordered the company to shut its manufacturing unit in MIDC Taloja, Raigad, within 15 days. The Taloja unit contributes approx. Rs 260 crore amounting to around 15% of the turnover of the company for the FY 2020-21. Hikal said it is taking appropriate legal measures as advised by counsels before the Pollution Board as well as Courts to remedy the situation and seek reliefs against the closure directions.

Century Textiles & Industries rose 0.82%. The company reported a consolidated net profit (from continuing operations) of Rs 84.43 crore in Q4 FY22 as against a net loss of Rs 4.89 crore in Q4 FY21. Net sales surged 44.62% to Rs 1,186.22 crore in Q4 FY22 over Rs 820.21 crore in Q4 FY21. Consolidated EBITDA grew 66.25% to Rs 133 crore in Q4 FY22 as against Rs 80 crore in Q4 FY21.

Bhansali Engineering Polymers (BEPL) lost 4.10% after the company reported a 55.2% fall in consolidated net profit to Rs 73.27 crore on a 5.9% decline in net sales to Rs 445.67 crore in Q4 Fy22 over Q4 FY21. Profit before tax fell 52.9% year on year to Rs 103.16 crore in Q4 FY22 over Q4 FY21. Profitability was dented after the company reported a 35.7% jump in total expenses to Rs 344.64 crore in Q4 FY22 over Q4 FY21.

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