5 Factors Why Stock Markets Plunged, Clean Science Listing, and Buzzing Stocks Today

Tue, 20 Jul Pre-Open

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Indian share markets ended on a negative note yesterday.

Benchmark indices joined the global sell-off and plunged over 1% amid uncontrolled pandemic-led situations in parts of Asia and fear of faltering economic growth.

At the closing bell yesterday, the BSE Sensex stood lower by 587 points (down 1.1%).

Meanwhile, the NSE Nifty closed lower by 171 points (down 1.1%).

NTPC and BPCL were among the top gainers.

HDFC Bank and IndusInd Bank, on the other hand, were among the top losers.

The BSE Mid Cap index and the BSE Small Cap index ended down by 0.6% and 0.3%, respectively.

Sectoral indices ended on a negative note with stocks in the banking sector, finance sector and metal sector witnessing most of the selling pressure.

Gold prices for the latest contract on MCX were trading down by 0.3% at Rs 47,921 per 10 grams at the time of closing stock market hours yesterday.

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Here are 5 Factors That Dragged the Market Lower Yesterday

Weak Asian Cues: Indian market fell in sync with major Asian peers who were under pressure as investors avoided riskier equities and bought safe-haven assets such as gold amid concerns of rising inflation and a continuous surge in coronavirus cases.

Yesterday, Japan's Nikkei and Hong Kong's Hang Seng fell over 2% each while Korea's KOSPI and China's Shanghai Composite Index fell about 1% each.

Banking, Financial Stocks Drag: Poor show of banking and financial heavyweights, such as HDFC twins, ICICI Bank, Kotak Mahindra Bank, Axis Bank and SBI, pushed the equity benchmarks lower.

Banking and financial stocks came under fresh pressure after the June-quarter numbers of HDFC Bank failed to meet market expectations.

Economic Recovery Falters: Global economic growth is beginning to show signs of fatigue.

Economists at Bank of America downgraded their forecast for US economic growth to 6.5% this year, from 7% previously, but maintained their 5.5% forecast for next year.

Virus Scare: Many countries, particularly in Asia, are struggling to curb the highly contagious Delta variant of the coronavirus and have been forced into taking lockdown measures.

Relentless Selling of FPIs: Foreign portfolio investors (FPIs) have been selling equities in July.

As per data available with National Securities Depository Limited (NSDL), FPIs have sold Indian equities worth Rs 45.2 bn in July so far.

They have invested some money in the debt segment so net-net, they have pulled out Rs 15.2 bn from the Indian financial market in July so far.

We will keep you updated on how these factors develop in the coming days and what effect they have on Indian stock markets. Stay tuned!

Top Stocks in Focus Today

Among the buzzing stocks today will be auto stocks.

Automobile exports from India recovered in the first quarter with all vehicle segments, including passenger vehicles and two-wheelers, witnessing growth following an improvement in the pandemic situation across various international markets.

As per the latest SIAM data, total vehicle exports during the April-June quarter this fiscal stood at 14,19,430 units as compared with 4,36,500 units in the same period of 2020-21.

SIAM Director General Rajesh Menon said while two-wheeler shipments were better than previous three years, passenger vehicles, three-wheelers and commercial vehicles export numbers were yet to catch up with numbers in the first quarter of 2018-19 fiscal.

In the April-June quarter, passenger vehicle exports from the country stood at 1,27,115 units as against 43,619 units in the same period of 2020-21.

Passenger car exports stood at 79,376 units, utility vehicle shipments at 47,151 units while van exports were at 588 units.

Maruti Suzuki led the passenger vehicle segment with exports of 45,056 units followed by Hyundai Motor India which shipped 29,881 units during the period.

Two-wheeler exports rose to 11,37,102 units in the April-June period as against 3,37,983 units in the same period of FY20.

Similarly, commercial exports during the first quarter stood at 16,006 units as compared with 3,870 units in the April-June period of 2020-21.

Tata Motors led the segment with shipment of 6,653 units followed by Mahindra & Mahindra with 3,931 units.

Tata power share price will also be in focus today.

Tata Power has signed an agreement with Hindustan Petroleum Corporation (HPCL) to provide end-to-end electric vehicle (EV) charging stations at HPCL's retail outlets (petrol pumps) in multiple cities and major highways across the country.

Tata Power is a pioneer in the EV Charging space and owns an expansive network of over 500 public chargers in 100+ cities covering petrol pumps, metro stations, shopping malls, theatres and highways.

The company is present across all segments of the EV eco-system - public charging, captive charging, home, workplace charging and ultra-rapid chargers for buses.

Under the agreement, Tata Power will provide state-of-the-art EV charging infrastructure at HPCL pumps for EV users who can travel within cities & intercity without any range anxiety.

The charging is enabled with the Tata Power EZ charge mobile platform (an award-winning app) which makes it a seamless experience to vehicle owners.

The partnership will play a strong role in encouraging EV owners to charge their electric vehicles across various petrol pumps.

It is also in line with the government of India's National Electric Mobility Mission Plan (NEMMP) which aims to develop electric vehicle charging infrastructure using the latest technological platform along with easy access to electric vehicle for charging points.

Clean Science IPO Shares List at 98% Premium Over Issue Price

Clean Science and Technology made a solid debut on the exchanges yesterday as the stock got listed at Rs 1,784.4 on BSE, a 98.3% premium to its issue price of Rs 900. On NSE, the scrip got listed at Rs 1,755, up 95%.

The initial public offering (IPO) was subscribed 93.4 times. It received bids for 1.2 bn shares against 12.3 m shares on offer.

The quota reserved for qualified institutional buyers (QIBs) was subscribed 156.4 times whereas the quota for non-institutional investors was subscribed 206.4 times. The retail individual investors (RIIs) quota was subscribed 9 times.

Clean Science and Technology manufactures functionally critical specialty chemicals such as performance chemicals, pharmaceutical intermediates, and FMCG chemicals.

The Pune-based company's customers include manufacturers and distributors in India as well as other international markets, including China, Europe, the US, Taiwan, Korea, and Japan.

At the issue price, the stock commanded a P/E ratio of 48.2 times while peers namely Vinati Organics and Fine Organics were trading at 73 times and 40 times, respectively.

Note that Clean Science is the only company globally to deploy a vapour-phase technology that manufactures Anisole from phenol with a better atom economy.

L&T Hits New High on Winning Significant Contracts for Various Businesses

Shares of Larsen & Toubro (L&T) hit a new high of Rs 1,638.7, up 1% on the BSE yesterday, in an otherwise weak market, after the construction & engineering major said, L&T Construction, the construction arm of the company, has won a slew of orders in India and abroad for its various businesses.

According to L&T, the order value ranges between Rs 10 bn and Rs 25 bn.

The power transmission and distribution business has won an order to construct a 220kV transmission line associated with system strengthening in the Ladakh region.

The design and execution of this system involves traversing avalanche prone, hilly terrains and ice loading of conductors.

Another turnkey order has been received for urban power distribution in Ayodhya city under the Integrated power development scheme.

Meanwhile globally, the company has won an order to design, supply, construct, install, test, and commission a 132/11kV substation with associated cable works in Dubai City.

Additionally, two transmission line packages have been secured in Africa, L&T said in a press release.

'The factories business has secured a prestigious order from a leading cement manufacturer in India to construct a 1.8 MTPA grinding unit in Dolvi, Maharashtra. The scope involves civil, mechanical and equipment installation works,' the company said.

L&T's board is scheduled to meet on 26 July 2021 to consider and approve the unaudited financial results of the company for the quarter ended 30 June 2021.

How this pans out remains to be seen. Meanwhile, we will keep you updated on the latest news from this space.

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

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