Market closes lower, RBI hikes repo rate by 40 bps

Trendlyne Analysis

Nifty 50 dropped over 400 points from the day’s high and closed 2.3% lower after the Reserve Bank of India (RBI) increased the Repo rate by 40 bps to 4.4%. RBI also increased the Cash Reserve Ratio by 50 bps to 4.5%. Most Asian indices closed lower amid mixed global cues. Investors brace for the biggest interest rate hike by the US Fed in two decades, to be announced later in the day. Analysts expect a 50 basis points hike and await the US Federal Reserve Chairman Jerome Powell’s commentary to gauge the hawkishness level of the US Fed. Crude oil rises on Wednesday after US industry data showed a fall in US crude oil inventories amid rising supply concerns. European indices follow the global trend and trade lower ahead of the US Fed’s rate decision later in the day.

Nifty Midcap 100 and Nifty Smallcap 100 closed in the red, following the benchmark index. Nifty Metal and Nifty Media closed lower than Monday’s levels. Nifty IT closed lower despite the tech-heavy NASDAQ 100 futures trading in the green.

BSE Sensex closed at 55,669.03 (-1307.0, -2.3%) while the broader Nifty 500 closed at 14,393.35 (-343.0, -2.3%)

Market breadth is overwhelmingly negative. Of the 1,872 stocks traded today, 278 were on the uptrend, and 1,571 went down.

Nuvoco Vistas Corporation, Tube Investments of India, Star Health and Allied Insurance Company, Escorts and are trading with higher volumes as compared to Monday.
Stocks like Nestle India, ACC, Crisil, and Tata coffee, among others, are outperforming the Nifty 50 index over the past week, post results
Kotak Mahindra’s net profit rises 50.3% YoY to Rs 3,891.8 crore and operating revenue rises 11.1% YoY to Rs 8,838.1 crore. Net interest income rises 18% YoY to Rs 4,521 crore and net NPA (non-performing assets) falls 30.8% YoY to Rs 2,148.7 crore.
Life Insurance Corporation of India’s Rs 21,008.4-crore IPO gets bids for 63% of the available 16.2 crore shares on offer on the first day of bidding. The retail investor quota gets bids for 56% of the available 6.9 crore shares on offer. The issue is entirely an offer for sale of Rs 21,008.4 crore.
Eris Lifesciences acquires a 100% stake in Oaknet Healthcare for Rs 650 crore. The acquisition will help the company to expand its market reach and enter the dermatology segment.
Coal India’s production rises 28% YoY to 53.5 million tonnes in April 2022. Its supply to the power sector increases 15.6% YoY to 49.7 million tonnes because of a rise in demand from electricity generating plants. Coal India’s subsidiary Northern Coalfields’ production increases 26.2% YoY to 10.8 million tonnes.
Sumitomo Chemical India is trading with more than 12 times its weekly average trading volume. Britannia Industries, Home First Finance Company India, Alembic Pharmaceuticals, and Solar Industries India are trading at more than three times their weekly average trading volumes.
Stocks like MphasiS, TV18 Broadcast, Zomato, ICICI Securities, and Tech Mahindra, among others, are in the oversold zone according to the technical indicator relative strength index or RSI.
Adani Enterprises’ Q4FY22 net profit rises 30% YoY to Rs 304.3 crore and revenue rises 83.7% YoY to Rs 25,141.6 crore led by growth in the airport and integrated resources management segments (IRM). The airport segment grows nearly 13X YoY to Rs 1,165.8 crore and the integrated resources business segment rises 112.4% YoY to Rs 17,857.1 crore. Operating margin falls by 160 bps YoY to 5.1% as purchases of stock-in-trade rise 123.1% YoY to Rs 20,051.4 crore.
Aurobindo Pharma’s wholly-owned subsidiary, Eugia Pharma Specialties receives US Food & Drug Administration (USFDA) for its Bortezomib injection, 3.5 mg. Bortezomib injection is therapeutically equivalent to Velcade Injection of Takeda Pharmaceuticals. This drug, which is used to treat certain types of cancer, has a total market size of $ 1.17 billion.
Pharma stocks like Alembic Pharmaceuticals, Dr. Reddy's Laboratories, Cipla, and Divi's Laboratories among others are falling in trade. The broader sectoral index Nifty Pharma is also trading in red.
Adani Ports & Special Economic Zone's cargo volumes in April 2022 rise 17% YoY to 28.64 million metric tonnes. Coal cargo volumes rise 23% YoY driven by higher coking coal volumes while agricultural cargo volumes jump 3.5X YoY on robust wheat exports from India.
Astec Lifesciences' Q4FY22 net profit rises nearly 80% YoY to Rs 43 crore and revenues rise 58% YoY to Rs 279 crore. Higher sales realizations in the exports segment and healthy sales volumes growth in the contract manufacturing segment drive the overall topline growth. The company also improves its gross margins by 4.5 percentage points to 42.8% on favorable product mix
Biocon slips in trade after Health Products Regulatory Authority, Ireland finds a major deficiency in the manufacturing processes of its new plant at Bengaluru. This plant, owned by its subsidiary Biocon Biologics, will cater to European markets w.r.t monoclonal antibody drug formulations.
Godrej Properties returns to black with a net profit of Rs 258.6 crore in Q4FY22 compared to a loss of Rs 191.6 crore a year ago and revenue rises 164.3% YoY to Rs 1,522.6 crore. Sales value rises 23.4% YoY to Rs 3,248 crore on the back of robust demand for residential real estate.
Britannia Industries rises as its Q4FY22 net profit increases 4.9% YoY to Rs 377.9 crore. Sales increase 15% YoY to Rs 3,508.4 crore. Cost of materials rises 21.3% YoY to Rs 1,858.6 crore and gross margin falls 240 bps to 38%.
Alembic Pharmaceuticals is falling as its Q4FY22 profit falls 86% YoY to Rs 35.6 crore despite a 9.3% increase in revenue to Rs 1,426 crore. Net profit is down mainly due to a non-recurring expense of Aleor Dermaceuticals’ accelerated amortization of existing intangible assets. Alembic Pharma’s net profit falls 53.4% YoY to Rs 522.3 crore and revenues decrease by 2.2% to Rs 5,356.3 crore.
Tata Steel’s Q4FY22 net profit rises 46.8% YoY to Rs 9,756.2 crore and revenue rises 38.5% YoY to Rs 69,615.7 crore. Maximum growth in revenue came in from the Europe segment, as Tata Steel Europe’s revenue rises 52.9% YoY to Rs 26,680.7 crore. However, the operating margin falls by 6.7 percentage points YoY to 21.7% on high input costs.
Titan is falling as its Q4FY22 profit falls 7.2% YoY to Rs 527 crore despite a 4.3% increase in revenue to Rs 7,872 crore. Net profit is down due to volatile gold prices and the Omicron wave that disrupted the company’s business in Q4FY22. Net profit jumps 2.3 times YoY in FY22 to Rs 2,198 crore and revenues increase by 33% to Rs 29,033 crore.
Life Insurance Corporation of India (LIC) raises Rs 5,627 crore from investors by selling 5.93 crore equity shares at Rs 949 per share. Foreign investors include Societe Generale, Government Pension Fund of Norway, Government of Singapore, Monetary Authority of Singapore, and BNP Investments. Domestic mutual funds pick 71% (4.2 crore equity shares) of the anchor portion, including, State Bank of India, ICICI Prudential, HDFC, Aditya Birla, among others.
Hero MotoCorp’s Q4FY22 net profit falls 29.9% YoY to Rs 620.5 crore due to weak rural demand. Revenue fell 13.7% to Rs 7,496.5 crore despite price hikes across its product range. The board of directors recommends a dividend of Rs 35 per share for FY22.

Riding High:

Largecap and midcap gainers today include Oil And Natural Gas Corporation Ltd. (162.25, 3.77%), Britannia Industries Ltd. (3,385.45, 3.49%) and Petronet LNG Ltd. (213.65, 2.69%).

Downers:

Largecap and midcap losers today include Ruchi Soya Industries Ltd. (1,004.50, -8.93%), General Insurance Corporation of India (124.40, -7.03%) and Voltas Ltd. (1,144.65, -7.01%).

Volume Rockets

16 stocks in BSE 500 are trading on high volumes today.

Top high volume gainers on BSE included KIOCL Ltd. (237.05, 8.37%), Rain Industries Ltd. (175.70, 4.96%) and Britannia Industries Ltd. (3,385.45, 3.49%).

Top high volume losers on BSE were IFB Industries Ltd. (865.85, -9.12%), Apollo Hospitals Enterprise Ltd. (4,013.30, -6.77%) and Alembic Pharmaceuticals Ltd. (733.85, -6.71%).

Sumitomo Chemical India Ltd. (450.60, 3.01%) was trading at 21.5 times of weekly average. Hawkins Cookers Ltd. (5,110.05, -1.42%) and Solar Industries India Ltd. (2,997.45, 2.69%) were trading with volumes 5.6 and 5.1 times weekly average respectively on BSE at the time of posting this article.

BSE 500: highs, lows and moving averages

7 stocks hit their 52-week highs, while 12 stocks were underachievers and hit their 52-week lows.

Stocks touching their year highs included - GHCL Ltd. (644.30, -2.00%), Indian Hotels Company Ltd. (257.45, -1.62%) and Mahindra Lifespace Developers Ltd. (385.75, -1.61%).

Stocks making new 52 weeks lows included - 3M India Ltd. (19,150.30, -3.43%) and Info Edge (India) Ltd. (4,225.40, -6.73%).

11 stocks climbed above their 200 day SMA including JSW Energy Ltd. (309.10, 1.36%) and Motilal Oswal Financial Services Ltd. (901.05, 0.05%). 46 stocks slipped below their 200 SMA including Vardhman Textiles Ltd. (375.65, -10.59%) and TV18 Broadcast Ltd. (47.95, -9.36%).