Sensex Ends 137 Points Lower, Nifty Falls Below 15,800; Banking & Metal Stocks Witness Selling

Fri, 13 May Closing

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After opening on a firm note, Indian share markets erased gains during the last hour of trade to end on a weak note for the sixth consecutive session.

Benchmark indices rebounded in the last hour of trade as metal and banking stocks came under pressure.

Also, the US Fed has cautioned against an aggressive policy stance in order to bring inflation under its comfort zone of 2%, which dampened sentiment.

At the closing bell, the BSE Sensex dipped 137 points, ending 0.3% lower.

Meanwhile, the NSE Nifty fell 26 points, ending at 15,782.

Sun Pharma, M&M, and HUL were among the top gainers today.

SBI, Bharti Airtel, and ICICI Bank were among the top losers today.

The broader markets ended in the green as the BSE Mid Cap index climbed 0.8% while the BSE Small Cap index jumped 1.3%.

Among sectoral indices, buying was seen in auto sector, FMCG sector, and pharma sector while stocks in the banking sector, metal sector, and energy sector witnessed most of the selling.

Outside the home ground, Asian share markets ended on a positive note today despite prevailing concerns about growth given rising inflation and interest rates.

At the close in Tokyo, the Nikkei 225 rose by 2.6%, while the Hang Seng was up 2.7%. The shanghai composite added 1%.

The SGX Nifty was trading 0.3% lower at the time of writing.

The rupee is trading at 77.46 against the US$.

Gold prices are currently trading down 0.2% at Rs 50,070 per 10 grams while silver is up 0.2% at Rs 58,870 per kg.

Speaking of gold, have a look at the chart below to see how gold has inched up ever since the Russia invaded Ukraine.

Gold Prices Inching up since Russia Invaded Ukraine

Watch this video to know whether gold really makes your portfolio crash-proof: Does Gold Make Your Portfolio Crash-Proof?

In news from the auto sector, the BSE auto index jumped 2.5% led by Tata Motors as the company posted its March quarter results.

Tata Motors reported a narrowing of consolidated net loss at Rs 10.3 bn for the quarter ended March 2022, down from a net loss of Rs 76.1 bn in the previous year's quarter.

Despite reporting 11.5% year-on-year decline in revenue from operations for the quarter under review, there was a strong free cash flow recovery.

While posting numbers, the company said:

• We expect performance to improve through the year as semiconductor supplies improve, and aim to deliver strong EBIT improvement and free cash flows in fiscal year 2023 to get to near net auto debt free by fiscal 2024.

Tata Motors domestic business was strong, while Jaguar Land Rover challenges continued and disappointed due to negative surprise on average selling prices.

The auto major should witness a gradual recovery as supply side issue eases and commodity headwinds could stabilize for the Indian business in the short run.

It will benefit from a macro recovery, company-specific volume and margin drivers, and a sharp improvement in cash flow and leverage in both Jaguar Land Rover as well as the Indian business.

The recovery in the auto sector was aided by the rise in April auto sales. The decline in metal prices observed recently could further aid operating margins.

Tata Motors share price ended 8.7% higher on the BSE today.

The other top performers in the auto index were MRF and Tube Investment, which gained 6% each, followed by TVS Motor and Ashok Leyland.

The auto sector is an interest-rate sensitive sector as financing cost plays a critical role in purchasing decisions. But overall, the demand is more a function of growth and less of interest rates.

Moving on to another stock specific news, shares of matrimony.com surged 16% on BSE as company's board approved share buyback via tender offer.

Matrimony.com is a signature consumer internet conglomerate, managing marquee brands such as BharatMatrimony, CommunityMatrimony and EliteMatrimony.

The board has recommended a buyback of equity shares not exceeding Rs 750 m at an indicative maximum buyback price not exceeding Rs 1,150 per equity share. The buyback is subject to approval by the shareholders of the company.

The primary objective of the buyback programme is to arrest the fall in stock value by reducing the supply, which will eventually push up the share price through a better price to earnings multiple.

The board also recommended a final dividend of 100%, that is Rs 5 per equity share of par value of Rs 5 each, subject to the approval of the shareholders.

Meanwhile, the company posted 15.6% year-on-year (YoY) jump in consolidated profit after tax at Rs 117 m. Revenue grew 9.4% Y-o-Y at Rs 1.1 bn.

In the past one week, the stock has outperformed the market by gaining 4.8% against a 3.7% decline in the BSE Sensex.

Speaking of smallcap stocks, lead smallcap analyst at Equitymaster Richa Agarwal discusses what to expect from smallcap stocks in 2022, in her latest video.

Is it time to be cautious when it comes to smallcaps? Will smallcap stocks outperform in fiscal 2023?

Richa answers all these questions in the video below. Tune in to find out more:

Moving on to news from the IPO space, Delhivery IPO sails through on the last day and is was subscribed 1.31x at the time of writing.

The Rs 52 bn initial public offering (IPO) of logistics and supply chain solution startup Delhivery finally managed to sail through, thanks to decent institutional interest.

However, quota for retail, employees and HNIs remained undersubscribed.

According to data from BSE, the portion for retail bidders was subscribed 0.48 times, whereas institutional investors attracted 2.24 times bids.

The employee quota saw only 20% bids. The portion reserved for HNI investors barely saw any bids.

A day before its IPO, Delivery allocated a total of 48 m equity shares to 64 anchor investors at Rs 487 apiece aggregating the transaction size to Rs 23.4 bn.

How the company performs on the bourses on listing day remains to be seen.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

FAQs

1. Why did the market go down today?

During the last hour of trade, banking and metal stocks witnessed heavy selling, which dragged the benchmark indices lower.

SBI and ICICI Bank stood as the top losers, down 3.8% and 2.7%, respectively.

Note that Indian share markets opened on a firm note today, tracking upbeat global cues and positive US futures.

Of late, equity markets have turned quite volatile. Especially after the Reserve Bank of India (RBI) decided to join the rate hike bandwagon last week.

2. Why did Tata Motors shares surge today?

Shares of Tata Motors surged today after the company's consolidated loss narrowed to Rs 10.3 bn for the March 2022 quarter compared to Rs 15.2 bn in the December 2021 quarter.

The gains could also be due to rising demand, as the auto major said it sees strong demand despite geopolitical and inflation concerns.

3. Why did SBI shares fall today?

Shares of SBI fell over 4% today after the bank reported mixed performance in its March quarter earnings.

The bank's operating performance fell below street's estimate, asset quality improved.

SBI's board also approved Rs 7.10 per share dividend. The record date for the same is 26 May 2022.

4. How does the subscription figures of Delhivery IPO look like?

The Rs 52.4 bn initial public offering (IPO) of Delhivery managed to garner full subscription today.

To know about the subscription figures, IPO price and more, you can visit the current IPO page on our website.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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