The market declined for the third consecutive session on Thursday. Profit selling, weak Q2 results and negative global cues put pressure on bourses. Traders are concerned about the adverse impact of inflation and higher commodity prices on corporate revenues and margins. IT, metal and realty stocks witnessed steep selling. Banks stocks bucked the trend on value buying.
The barometer index, the S&P BSE Sensex, dropped 336.46 points or 0.55% to 60,923.50. The Nifty 50 index lost 88.50 points or 0.48% to 18,178.10.
After opening higher at 18,382.70 mark, the Nifty witnessed steep selling pressure, which dragged the index lower in morning trade. After hovering in a narrow range, the index hit the day's low of 18,048 in mid-afternoon trade.
In the broader market, the BSE Mid-Cap index slipped 0.38% and the BSE Small-Cap index skid 0.69%.
The market breadth was negative. On the BSE, 1,589 shares rose and 1,694 shares fell. A total of 143 shares were unchanged.
Numbers to Watch:
The yield on 10-year benchmark federal paper fell to 6.339% as compared with 6.373% at close in the previous trading session.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 74.8725, compared with its close of 74.88 during the previous trading session.
MCX Gold futures for 3 December 2021 settlement rose 0.15% to Rs 47,570.
The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, rose 0.11% to 93.66.
In the commodities market, Brent crude for December 2021 settlement fell 91 cents at $84.91 a barrel. The contract rose 74 cents, or 0.87% to settle at $85.82 a barrel in the previous trading session.
Foreign Markets:
US Dow Jones index futures fell 107 points, indicating a weak opening in the US stocks.
European stocks fell across the board while Asian stocks ended mixed on Thursday, 21 October 2021 as concerns about the Chinese property sector returned to the fore, while investors also monitored a slew of corporate earnings.
Evergrande said on Wednesday it had scrapped a deal to sell a 50.1% stake in Evergrande Property Services Group Ltd to Hopson Development Holdings Ltd as the smaller rival had not met the prerequisite to make a general offer.
In US, the Beige Book, a compilation of anecdotal evidence on economic conditions in each of the twelve Fed districts, attributed the slowdown to supply chain disruptions, labor shortages, and uncertainty around the Delta variant of COVID-19. The Fed also said employment increased at a modest to moderate rate in recent weeks, as demand for workers was high, but labor growth was dampened by a low supply of workers.
Buzzing Index:
The Nifty Bank index rose 1.30% to 40,030.20. The index declined 0.42% in the past two sessions.
Kotak Mahindra Bank (up 6.92%), RBL Bank (up 4.60%), Punjab National Bank (up 3.94%), Federal Bank (up 2.77%), IDFC FIRST Bank (up 2.57%), AU Small Finance Bank (up 2.48%), ICICI Bank (up 1.66%), Axis Bank (up 0.92%), SBI (up 0.91%), HDFC Bank (up 0.37%) and Bandhan Bank (up 0.06%) advanced.
Stocks in Spotlight:
Asian Paints tumbled 5.21% to Rs 3003.50. On a consolidated basis, Asian Paints' revenue from operations has increased by 32.6% to Rs 7,096.01 crore in Q2 September 2021 from Rs 5,350.23 crore in Q2 September 2020. Profit before depreciation, interest, tax and other income (PBDIT) for the group (before share in profit of associates) decreased by 28.5% to Rs 904.45 crore from Rs 1265.20 crore. Profit Before Tax (PBT) decreased by 27.9% to Rs 826.24 crore from Rs 1,145.52 crore. Net profit after non-controlling interest decreased 28.2% to Rs 595.96 crore as compared to Rs 830.37 crore in the previous corresponding period.
Among other paint makers, Berger Paints India (down 6.22%), Asahi Songwon Colors (down 1.46%), Indigo Paints (down 0.83%), Shalimar Paints (down 1.18%) and Akzo Nobel India (down 1.14%) declined.
Shoppers Stop hit an upper circuit of 20% at Rs 326.15. The company reported net loss of Rs 3.58 crore in Q2 September 2021, lower than net loss of Rs 97.70 crore in Q2 September 2020. Net sales surged 116.20% to Rs 642.07 crore in Q2 September 2021 over Q2 September 2020.
The company said it witnessed strong recovery in demand after the second wave across the formats, with sales moving swiftly close to pre-pandemic levels in August and September. All the stores are now fully operational, with overall store operation days at 87% for the quarter.
Syngene International fell 1.91%. The company's consolidated net profit (after exceptional items) dropped 20.68% to Rs 66.70 crore on a 17.43% surge in revenue from operations to Rs 610.20 crore in Q2 FY22 over Q1 FY21.
Tejas Networks slipped 4.47%. The company posted a 19.2% drop in consolidated net profit to Rs 3.66 crore in Q2 FY22 as compared to a net profit of Rs 4.53 crore posted in Q2 FY21. Revenue from operations increased by 57% to Rs 172.78 crore in Q2 FY22 over Q2 FY21. The profit before stood at Rs 3.33 crore in Q2 FY22, 26.5% lower than Rs 4.53 crore in Q2 FY22 over Q2 FY21. Profitability was impacted after total expenses spiked 52.7% to Rs 173.62 crore in Q2 FY22 over Q2 FY21.
Supreme Petrochem dropped 6.34%. The company's standalone net profit jumped 47.49% to Rs 127.07 crore on a 71.56% surge in total income from operations (net) to Rs 1,190.76 crore in Q2 FY22 over Q2 FY21.
Tata Steel Long Products skid 4.71%. The company's net profit declined by 59.36% to Rs 134.77 crore in Q2 FY22 from Rs 331.60 crore in Q1 FY22. Revenue from operations in the second quarter fell by 2.98% to Rs 1,637.37 from Rs 1,687.64 reported in the first quarter of the financial year 2021-22.
Just Dial slipped 1.96%. The company's consolidated net profit fell 30.48% to Rs 32.91 crore on 6.89% decline in net sales to Rs 155.98 crore in Q2 September 2021 over Q2 September 2020.
Deferred revenue stood at Rs 334.2 crore, up 8.7% QoQ and up 19.6% YoY. Total traffic (unique visitors) for the quarter stood at 149.5 million, up 14.5% YoY and 20.5% QoQ. Total active listings stood at 31 million as on 30 September 2021, an increase of 3.3% YoY and 1.3% QoQ.
Havells India slumped 8.52%. The company's standalone net profit declined 7.18% to Rs 301.56 crore on 31.38% rise in net sales to Rs 3221.03 crore in Q2 September 2021 over Q2 September 2020.
The company reported healthy growth across business verticals. It added that increase in commodity cost remained unabated with severe escalation in a rather short period. Price increase have been staggered creating a lag affect on margins. However, we maintain a positive outlook on demand growth which could support margin as well, the company said.
Jindal Stainless (Hisar) (JSHL) added 2.55%. JSHL has commissioned 26,000 tonnes per annum (TPA) capacity Precision Strip Mill as part of the first phase of its latest brownfield expansion plan at its state-of-the-art specialty products division (SPD).
PNB Housing Finance hit a lower circuit of 5% at Rs 520.60. The company said that its board will on 2 November 2021 consider plans to raise funds via issuance of non-convertible debentures on private placement basis aggregating up to Rs 2,000 crore in tranches.
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