Sensex, Nifty log heavy losses amid Russia-Ukraine crisis; Nifty falls below 16,900 level

14 Feb 2022 , 03:35 PM

The benchmark indices suffered substantial losses, closing near its intraday low on Monday. The market was dragged by all the sectoral indices.

The sentiment was impacted by negative global cues and geopolitical worries. Global stocks tumbled after the White House warned of a possible imminent Russian invasion of Ukraine. Crude oil prices spiked to 7-year highs due to the Ukraine crisis. In the commodities market, Brent crude for April 2022 settlement fell 20 cents at $94.24 a barrel.

The Nifty slipped from its mornings 17,099.50 mark to end tad above its days low of 16,809.65. The NSEs India VIX, a gauge of markets expectation of volatility over the near term, jumped 25.92% to 23.5225.

As per provisional closing data, the barometer index, the S&P BSE Sensex, fell 1814.55 points or 3.12% at 56,338.37. The Nifty 50 index slipped 556.05 points or 3.20% at 16,818.70.

In the broader market, the S&P BSE Mid-Cap index skid 3.78% while the S&P BSE Small-Cap index lost 4.31%.

The market breadth was weak. On the BSE, 577 shares rose and 2,973 shares fell. A total of 120 shares were unchanged.

Economy:

Indias inflation based on wholesale price index (WPI) stood at 12.96% in January 2022 compared with 2.51% in January 2021.

The high rate of inflation in January, 2022 is primarily due to rise in prices of mineral oils, crude petroleum & natural gas, basic metals, chemicals and chemical products, food articles etc as compared the corresponding month of the previous year, the Ministry of Commerce & Industry said in a statement today.

WPI grew 13.56% in December 2021, while the figure for November 2021 was 14.87%.

Meanwhile, Indias Industrial output slumped to a 10-month low of 0.4% in December 2021, dragged down by manufacturing, capital goods and consumer durables output along with an unfavourable base, according to data released on Friday by the National Statistical Office (NSO). The IIP had registered a growth of 1.3% a month ago and 2.2% in December 2020.

LIC IPO:

Life Insurance Corporation of India (LIC) has filed its draft share sale prospectus with the capital markets regulator SEBI, paving the way for Indias largest initial public offering (IPO). LIC plans to sell 31.62 crore shares, which is about 5% of its total equity base.

The IPO issue is expected to be the countrys largest public issue and will hit the capital market in March 2022. The IPO is 100% offer for sale by Government of India and there will be no fresh issue of shares by LIC.

LIC has 66% market share in New Business Premiums with 283 million policies and 1.35 million agents as of 31st March last year. As of September 2021, its assets under management (AUM) stood at Rs 39.6 lakh crore. The embedded value of LIC as of 30 September 2021, stood at Rs 5,39,686 crore.

Buzzing Index:

The Nifty Oil & Gas index skid 2.62% to 7,410.65. The index lost 2.62% in two trading sessions.

Mangalore Refinery & Petrochemicals (down 7.39%), Adani Total Gas (down 5%), Indian Oil Corporation (IOCL) (down 4.67%), Hindustan Petroleum Corporation (HPCL) (down 3.83%) and Gujarat State Petronet (down 3.66%) were the top losers in the Oil & Gas segment.

Reliance Industries (RIL) fell 1.63%. Jio Platforms (JPL), Indias leading digital service provider, and SES, a leading global satellite-based content connectivity solutions provider, today announced the formation of a joint venture – Jio Space Technology – to deliver the next generation scalable and affordable broadband services in India leveraging satellite technology. JPL, a subsidiary of RIL, and SES will own 51% and 49% equity stake in the joint venture. The joint venture will use multi-orbit space networks that is a combination of geostationary (GEO) and medium earth orbit (MEO) satellite constellations capable of delivering multi-gigabit links and capacity to enterprises, mobile backhaul and retail customers across the length and breadth of India and neighbouring regions.

Stocks in Spotlight:

Dr Reddys Laboratories declined 2.83%. The pharmaceutical major has entered into an exclusive sales and distribution agreement with Novartis India (NIL) for the Voveran range, the calcium range and Methergine in India. Under the arrangement, Dr. Reddys will have exclusive rights to promote and distribute the well-established Voveran range, the Calcium range and Methergine in India. The company will use its strengths in promotion and distribution to considerably expand its engagement with healthcare professionals with the aim of enabling access to patients in need.

Sequent Scientific spurted 5.89%. The companys consolidated net profit dropped 51.1% to Rs 18.56 crore on a 0.8% increase in net sales to Rs 358.05 crore in Q3 FY22 over Q3 FY21. Consolidated profit before tax (PBT) tanked 52.3% to Rs 23.61 crore in Q3 FY22 from Rs 49.54 crore in Q3 FY21. Active Pharmaceutical Ingredients (API) sales fell 18.8% to Rs 102.60 in Q3 December 2021 as against Rs 126.40 crore in Q3 December 2020. EBITDA (post-ESOP) skid 42.81% to Rs 36.20 crore in Q3 FY22 as against Rs 63.30 crore in Q3 FY21. EBITDA margin stood at 10.1% in Q3 December 2021 from 17.8% in Q3 December 2020. Profit margin stood at 4.8% in Q3 December 2021 from 10% in Q3 December 2020.

Glenmark Pharmaceuticals slipped 2.54%. The pharmaceutical majors consolidated net profit fell 3.4% to Rs 239.75 crore on a 13.9% rise in net sales to Rs 3,141.47 crore in Q3 December 2021 over Q3 December 2020. Consolidated profit before tax (PBT) slipped 1.4% to Rs 343.04 crore in Q3 FY22 from Rs 347.97 crore in Q3 FY21. EBITDA was at Rs 693.20 crore for the quarter ended as on 31 December 2021 as against Rs 530.10 crore in the previous corresponding quarter, registering an increase of 30.8% Y-o-Y (year-on-year). On a consolidated basis, Active Pharmaceutical Ingredients (API) sales fell 5.27% to Rs 303.20 in Q3 December 2021 as against Rs 320.10 crore in Q3 December 2020.

Ipca Laboratories shed 3%. The companys consolidated net profit fell 25.81% to Rs 196.96 crore on 1.48% increase in net sales to Rs 1430.47 crore in Q3 December 2021 over Q3 December 2020. On a consolidated basis, profit before tax (PBT) fell 20.17% to Rs 260.66 crore in Q3 December 2021 over Q3 December 2020. Total expenses rose 7.65% year-on-year to Rs 1182.74 crore in Q3 December 2021. Cost of raw material consumed rose 5.98% to Rs 417.04 crore. EBITDA before forex gains declined 18% to Rs 310.83 crore. EBITDA margin stood at 21.53% in Q3 FY22 as against 6.47% in Q3 FY21. The company reported forex gain of Rs 9.91 crore in Q3 December 2021 as against forex gain of Rs 4.99 crore in Q3 December 2020. Revenue from formulations business rose 4% YoY to Rs 992.77 crore. Indian formulations income rose 23% at Rs 645.27 crore. Revenue from APIs business declined 12% to Rs 309.38 crore.

Grasim Industries declined 4.11%. Grasim Industries reported 26% rise in consolidated net profit to Rs 1,746 crore on a 16% increase in revenue to Rs 24,402 crore in Q3 FY22 over Q3 FY21. EBITDA declined by 8% to Rs 4,107 crore in Q3 FY22 from Rs 4,476 crore in Q3 FY21. With regard to Viscose business, Grasim said that the growth in the global demand for textile products in the US and Europe led to a positive demand environment for VSF. The VSF prices averaged higher in Q3FY22 compared to the previous quarter. Though towards the end of December-21, the realization started to trend downwards due to COVID concerns. The strong operational performance of VSF has been induced by strong demand for textile products in India during Q3FY22, despite the curbs imposed by various state governments. The domestic textile value chain has been operating close to its peak capacity, which is led by the demand uptick.

Bharat Dynamics rallied 3.86%. The companys net profit surged 333.54% to Rs 213.26 crore on 75.13% increase in total revenue from operations sales to Rs 803.90 crore in Q3 December 2021 over Q3 December 2020. Profit before tax (PBT) rose 335.57% to Rs 298.54 crore in Q3 December 2021 over Q3 December 2020. Total expenses rose 26.96% year-on-year to Rs 540.02 crore in Q3 December 2021. Cost of raw material consumed increased 27.46% to Rs 316.59 crore. The supply chain disruptions due to COVID pandemic had adversely impacted the production and sales during the last two quarters of this financial year and the preceding financial year. The easing of restrictions in movement of men and material have resulted in improved production and sales in third quarter of current financial year, the company said.

Mrs. Bector Food Specialities skid 3.42%. The companys consolidated net profit dropped 25% to Rs 16 crore on a 17% rise in revenues to Rs 263 crore in Q3 FY22 over Q3 FY21. On a consolidated basis, EBITDA skid 16% to Rs 33 crore in Q3 FY22 as against Rs 40 crore in Q3 FY21. EBITDA margin stood at 12.6% in Q3 December 2021 from 17.6% in Q3 December 2020. Profit margin stood at 5.9% in Q3 December 2021 from 9.2% in Q3 December 2020.

Global Markets:

Shares in Europe and Asia tumbled on Monday as investors continued to track tensions in Ukraine and remarks from U.S. Federal Reserve officials about the interest rate outlook.

Multiple countries have urged their citizens to leave Ukraine amid fears of an imminent Russian invasion, with U.S. President Joe Bidens national security advisor Jake Sullivan warning on Sunday that the Kremlin has accelerated its extraordinary military buildup along the countrys border over the past 10 days.

Western leaders have threatened severe sanctions against Russia in the event of any incursion into Ukraine, as leaders continue to pursue diplomatic solutions. The Kremlin has denied any intention to invade its neighbor, accusing Washington of stoking hysteria.

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