Stock Market Today: Nifty, Sensex Log Worst Session In Over Four Years

The June futures contract of the GIFT Nifty was trading 44 points, or 0.19% higher at 23,588.00 as of 06:53 a.m.

Most Asia-Pacific markets were trading lower in early trade on Tuesday with all eyes on India's general election results, scheduled to be out later in the day.

Only Hong Kong's Hang Seng and China's CSI 300 traded in the positive. Japan's Nikkei and Topix fell the most.

After seven phases of polling, the Election Commission is preparing to announce the results of the Lok Sabha 2024 election on Tuesday. With the counting process underway, public sector enterprises, financials, infrastructure, railway and defence will be in focus.

US treasuries climbed as a weak manufacturing reading fueled speculation the Federal Reserve will have room to cut interest rates this year, Bloomberg said.

The S&P 500 rose 0.11% and the Nasdaq Composite rose 0.56% as of Monday. The Dow Jones Industrial Average fell by 0.30%.

Brent crude was trading 0.22% lower at $78.14 a barrel. Gold rose 0.01% to $2,351.02 an ounce.

India's key equity indices logged their best session in over three years as investors cheered exit polls, which projected victory for the Bhartiya Janata Party-led National Democratic Alliance in the 2024 Lok Sabha elections, along with a better-than-expected GDP for the country. On Monday, both indices closed at record highs.

The NSE Nifty 50 closed 733.20 points, or 3.25% higher at 23,263.90, and the S&P BSE Sensex gained 2,507.47 points, or 3.39% to end at 76,468.70.

Overseas investors were net buyers of Indian equities on Monday. Foreign portfolio investors mopped up stocks worth Rs 6,850.8 crore—the highest in two months—while domestic institutional investors remained net buyers for the 10th day and bought equities worth Rs 1,914 crore, according to provisional data from the National Stock Exchange.

The Indian currency strengthened by 32 paise to close at 83.14 against the US dollar.

• Sectors: Public sector enterprises, financials, infrastructure, railway, and defence will be in focus with the Lok Sabha election results to be announced on Tuesday.

• ICICI Bank Ltd. and Adani Group: The bank and Adani One launched co-branded credit cards with airport-linked benefits. The credit cards are to be rolled out in collaboration with Visa.

• Adani Power Ltd.: The company plans to amalgamate its subsidiary, Mahan Energen, with Stratatech Mineral Resources to enhance fuel security and competitiveness in the power market.

• Mahindra and Mahindra Ltd.: The company reported overall disbursements at Rs 4,430 crore in the month of May, up 7% YoY. Its business assets also rose 23% YoY to Rs 1.05 lakh crore, and collection efficiency stood at 96%.

• Rail Vikas Nigam Ltd.: The company received an EPC order worth Rs 440 crore from South Central Railway.

• Moil India Ltd.: The company reported manganese ore sales up 41% YoY at 2.15 lakh tonnes.

• Zee Entertainment Enterprises Ltd.: The company board meeting is scheduled for June 6 to consider raising funds by way of the issuance of equity shares.

• Biocon Ltd.: The company received a USFDA nod for the antifungal medication Micafungin. Micafungin is used as an antifungal medication to treat fungal or yeast infections.

• Wipro Ltd.: The company appointed Bruno Schenk as country head and managing director for Switzerland.

• Dr. Reddy's Laboratories Ltd.: The company’s arm, Aurigene Pharmaceutical, opened a biologics facility in Hyderabad.

• Century Textiles and Industries Ltd.: The company arm incorporated a wholly owned subsidiary, Vibhavya Properties for real estate projects.

• Techno Electric & Engineering Co.: The company has acquired NERES XVI Power Transmission from REC Power Development and Consultancy for Rs 7.15 crore.

• Cupid Ltd.: The company announced the commencement of its Rapid In Vitro Diagnostic kits distribution network. The company is targeting a nationwide presence by the end of the fiscal year.

• Kalyan Jewellers India Ltd.: The company acquired a 15% stake in Enovate Lifestyles for Rs 42 crore.

• Seamec Ltd.: The company has informed that the deployment of the vessel “SEAMEC SWORDFISH” with Zamil Offshore Services, Saudi Arabia, is extended for a further period of 30 days from May 25.

• Sapphire Foods India Ltd.: The board meeting is scheduled for June 19 to consider and approve the stock split of equity shares of the company.

• Kronox Lab Sciences: The public issue was subscribed to 11.07 times on day one. The bids were led by institutional investors (1.11 times), non-institutional investors (19.94 times), and retail investors (12.95 times).

• Tinna Rubber and Infrastructure Ltd.: PGA Securities bought 0.9 lakh shares (0.52%), while Bhupinder Sekhri & Sons HUF sold 0.9 lakh shares (0.52%) at Rs 1,270 apiece.

• Bajaj Electricals Ltd.: HDFC Mutual Fund bought 7.3 lakh shares (0.63%) at Rs 930 apiece, while Norges Bank on Account of The Government Pension Fund Global sold 7.35 lakh shares (0.63%) at Rs 929.97 apiece.

• Fiem Industries Ltd.: Aanchal Jain sold 5 lakh shares (3.79%) at Rs 1,170.3 apiece, Rahul Jain sold 5 lakh shares (3.79%) at Rs 1,170.61 apiece, and Setu Securities Pvt. bought 2.25 lakh shares (1.71%) at Rs 1,174.58 apiece.

• Som Distilleries & Breweries Ltd.: Promoter Jagdish Kumar Arora bought 20,000 shares on June 3.

• Ajanta Pharma Ltd.: Promoter Aayush M Agrawal, Trustee Aayush Agrawal Trust created a pledge of 37.87 lakh shares between May 29 and 31.

• Price Band Change from 20% to 10%: Cochin Shipyard Ltd., Techno Electric and Engineering Co.

• Ex/record dividend: ITC Ltd.

• Nifty June futures up by 3.3% to 23,407.9 at a premium of 144 points.

• Nifty June futures open interest down by 3.37%.

• Nifty Bank June futures up by 4.3% to 51,283.05 at a premium of 303.1 points.

• Nifty Bank June futures open interest up by 0.36%.

• Nifty Options June 6 Expiry: Maximum Call open interest at 24,700 and Maximum Put open interest at 20,200.

• Bank Nifty Options June 5 Expiry: Maximum Call Open Interest at 57,000 and Maximum Put open interest at 40,000.

• Securities in ban period: Zee Entertainment Enterprises Ltd.

• US Dollar Index at 104.06.

• US 10-year bond yield at 4.41%.

• Brent crude down 0.34% at $78.09 per barrel.

• Nymex crude down 0.40% at $73.92 per barrel.

• Bitcoin was flat at $69,067.5.

• The GIFT Nifty was 44 points, or 0.19% higher at 23,588.00 as of 06:53 a.m.

• Nifty consolidated in May 2024

• DII inflows remained strong in May

• May was second consecutive month of FII outflows

• On Q4FY24 results: 5 cos HDFC Bank, SBI, ONGC, Tata Motors, and Coal India – contributed 72% of the incremental YoY accretion in earnings

  View:

• India in a goldilocks period - solid macros, strong earnings, peak rates, moderate inflation, steady policy

• Nifty valuation at 19.2x EPS, 5% below long period avg

• OW on Financials, Consumption, Industrials, and Real Estate

• Maintain Buy with TP 3010, Upside 13%

• Tweak up estimate given strong monthly volume trends, expanded capacity

• Strong initial volumes of the XUV 3XO

• Earnings estimates change by 6-9% over FY25-27E

• Due to the changes in volumes and margin estimates

• Target multiple for core business to 27x from 26x given:

  1) More positive stance on UV volume growth;

  2) Expectations of normal monsoon in CY2024

• Could result in upside risks to our tractor volume estimates

• Listed subsidiaries at Rs. 360/share

• Bajaj Housing Finance's board to meet on June 6 to approve IPO via fresh issue and OFS

• BHFL board to meet on June 7 to consider participation in proposed IPO via OFS

Source: Exchange filing

For all the latest updates on election results

As of 8.34 a.m., the GIFT Nifty was trading at 23,430.00, down 84 points or 0.36%.

The yield on the 10-year bond opened flat at 6.95%.

It closed at 6.94% on Monday.

Source: Cogencis

• The local currency weakened 10 paise to open at 83.24 against the U.S dollar.

• It closed at 83.14 on Monday.

Source: Bloomber poui

At pre-open, the Nifty was at 23,179.50, down 84.40 points or 0.36% and the Sensex was down 183.00 points or 0.24% at 76,285.78.

Units complete registration of sub-lease deeds for 3,750 acres for 43 years

Lease worth Rs 13,400 crore for Navi Mumbai land and associated development rights

Source: Exchange filing

Benchmark equity indices came off their record highs and fell with shares of Reliance Industries and Larsen & Toubro weighing the most.

At pre-open, the Nifty was at 23,179.50, down 84.40 points or 0.36% and the Sensex was down 183.00 points or 0.24% at 76,285.78.

"Nifty 50 has formed a hanging man candlestick pattern which indicates a trend reversal but in the near term, it is the general election's outcome likely to influence the market trend which will lead to immense volatility on both sides," said Aditya Gaggar, director of Progressive Shares.

Shares of Reliance Industries Ltd., HDFC Bank Ltd., Larsen & Toubro Ltd., State Bank Of India, and ITC Ltd. weighed on the index.

While those of Sun Pharmaceutical Industries Ltd., Hindustan Unilever Ltd., Nestle India Ltd., Cipla Ltd., and Britannia Industries Ltd., cushioned the fall.

Most sectoral indices fell at open. Nifty Pharma was the only index that rose. Nifty PSU Bank fell the most.

In pact for quantum computing solutions for BFSI, supply chain & logistics, Lifesciences & healthcare verticals

Source: Exhchange filing

Nifty PSU bank fell as much as 7.76% to an intra-day low of 7384.6. The index rose as much as 9.03% during the rally on Monday.

Rail Vikas Nigam fell as much as 13.10% to Rs 351.55 apiece, the lowest level since May 23. It pared losses to trade 2.62% lower at Rs 393.95 apiece, as of 10:10 a.m. This compares to a 2.03% decline in the NSE Nifty 50 Index.

It has risen 237.63% in 12 months, and 117.46% on year to date basis. Total traded volume so far in the day stood at 2.2 times its 30-day average. The relative strength index was at 77.22, which implied the stock is overbought.

Three analysts tracking the company,  recommend a 'hold,' according to Bloomberg data. The average 12-month consensus price target implies a downside of 21.7%.

Shares of Bharat Electronics Ltd, Coal India and SJVN were the top losers with a fall of over 6%. NTPC, ONGC, NBCC and Power Grid saw a fall of over 5%.

Techno Electric & Engineering Co. Ltd. slumped 10.01% to Rs 1,353.00, the lowest level since May 31. The slump in the stock came despite the company acquiring NERES XVI Power Transmission from REC Power Development and Consultancy for Rs 7.15 crore.

The scrip was trading 7.22% lower at Rs 1,394.95 as of 10:23 a.m. It has gained 282.24% in 12 months, and 75.41% on year to date basis. Total traded volume so far in the day stood at 1.8 times its 30-day average. The relative strength index was at 69.17.

Out of four analysts tracking the company, three maintain a 'buy' rating, one recommend a 'hold,' according to Bloomberg data. The average 12-month consensus price target implies an upside of 5.8%.

Board considers and recommends dividend of Rs 6.2/share

Source: Exchange Filing

Hindustan Aeronautics Ltd. declined 9.82% to Rs 4,756.00, the lowest level since May 30. The scrip was trading 6.87% lower at Rs 4,911.60 as of 10:32 a.m., as compared to 2.34% decline in the NSE Nifty 50 index.

The scrip gained 201.38% in 12 months, and on year to date basis it has risen 76.36%. Total traded volume so far in the day stood at 3.6 times its 30-day average. The relative strength index was at 61.91.

Out of 16 analysts tracking the company, 14 maintain a 'buy' rating, one recommend a 'hold,' and one suggest 'sell', according to Bloomberg data. The average 12-month consensus price target implies an upside of 2.1%.

Only 55 stocks out of the 500 on the Nifty 500 index rose with Dabur India, Avenue Supermarts, and Five-Star Business Finance leading.

All its constituents traded lower.

At 11:03 a.m., the Nifty Smallcap 250 was down 5% at 15,155.70 and the Nifty Midcap 100 fell 5.13% to 50,533.60.

• In pact to expand healthcare access in Japan

• Develops application NiCOMS, to help patients access remote consultations & online payments

Source: Exchange Filing

Bharat Electronics Ltd. hit a 15% lower circuit and fell to Rs 270.85, the lowest level since May 18. It remained locked in the 15% lower circuit as of 11:07 a.m., as compared to 4.51% decline in the NSE Nifty 50 index.

The scrip has risen 134.85% in 12 months, and on year to date basis, it has risen 47.04%. Total traded volume so far in the day stood at 4.5 times its 30-day average. The relative strength index was at 52.58.

Out of 28 analysts tracking the company, 22 maintain a 'buy' rating, three recommend a 'hold,' and three suggest 'sell', according to Bloomberg data. The average 12-month consensus price target implies an upside of 4.6%.

• The yield on the 10-year bond rose 11 bps to 7.05%.

• It closed at 6.94% on Monday.

Source: Cogencis

Shares of State Bank of India snapped their three-day rally and fell to hit its one-month low a day after hitting a record.

Indian equity indices plummeted over 8% on Tuesday, as poll trends indicate a closer than anticipated fight for the incumbent Narendra Modi government.

The BJP-led National Democratic Alliance is leading in nearly 300 seats while the INDIA alliance is leading in over 200 seats, as per data from the Election Commission of India.

After opening at Rs 83.24, the Indian rupee depreciated 28 paise to Rs 83.42 against the US dollar. The stock volatility gauge, India VIX, — which fell over 22% after exit polls — rose over 42.3% to 29.7 during the session. This is the biggest intraday jump since Nov. 13, 2020.

The steep fall is due to the results so far falling short of the exit polls which the market had discounted yesterday, according to V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services. "If BJP doesn’t get a majority on its own there will be disappointment and this is getting reflected in the market."

Also it is possible that Modi 3.0 may not be as reform-oriented as the market expected and may turn more welfare- oriented, Vijayakumar said. "This is getting reflected in the strength in FMCG stocks," he said.

All its constituents fell with Zee Entertainment leading the fall.

Market invariably discounts emotions and builds on rationality, says Nilesh Shah, managing director of Kotak Mutual Fund as markets saw a significant fall during the day while Lok Sabha vote counting was underway. There will be opportunity once the new government takes power and rethink policy matter, he said.

There will be moves up and down, but this is the time to lock in duration with a medium-term view, Shah said.

"While economic fundamentals are in place and even there is a positive news on oil which has gone below $80, right now the driver for the market is political formation," he added

He said that unless and until we know what kind of government is getting formed, and what will be their priorities as they analyze the verdict the markets will remain uncertain.

The markets have fallen dramatically today because they rose dramatically yesterday, says Helios Capital's Samir Arora. The markets saw a substantial rally on Monday in the wake of exit polls for the Lok Sabha elections.

Overall, it will settle down, Arora says. "Today you have assumed everything will change;' everything will not change."

The index fell to Rs 7,877.10, its lowest level since March 13. Container Corp. of India, Adani Ports & Special Economic Zone Ltd., and GAIL (India) were the top losers.

Market looks for excuses to correct, and this event (elections and results) are one such event, says veteran investor Vijay Kedia. The correction we saw today will grant investors who missed out an entry point to participate in the markets, he says.

Weekly Contracts

Monthly Contracts

Scenario 1:

- Modi to return as PM, but carrying alliance partners

- Govt may not function as smoothly as last 10 years

- This scenario seems most likely

Scenario 2:

- NDA forms govt, but with new prime minister

Scenario 3:

- Key alliance partners of BJP could switch sides

- This could lead to meaningful changes in govt policy trajectory

Impact on Investment Outlook

- Scenario 1 to be most positive for Indian markets

- National policy thought process could change via state elections

- Stress in mass market consumption may come into govt focus

- Country could see delays in fiscal consolidation path

- Reforms that could be placed on cold storage: Agri/food subsidy reform, land and direct tax reforms

India story should gain momentum once the uncertainty over formation of government is over, says Motilal Oswal Founder Raamdeo Agrawal. "I hope... there is mandate for NDA. Of course, it will be a weaker BJP, so the management style that was centered in Delhi will have to become much more participative," says Raamdeo Agrawal.

"As more certainty returns to the political management, I think markets will start slowly recovering," he said adding that markets have realised that they overdone yesterday. He also said that its too early to look at portfolio changes and advises to wait till budget.

• Negative surprise on election results to trigger derating

• Current trends indicate that the NDA could end up with ~290-300 seats

• See Narendra Modi returning as PM but in changed circumstances

• Greater demand to stimulate consumption in the economy from both, the BJP and allies

• Broad direction of economy unlikely to change

• Factor market reforms related to land, agriculture, and labor are now off the table

• Privatization and asset monetization are also at risk

• Switch from PSUs and Capital Goods to FMCG

• Buy Indian equities if the Nifty falls below 20,000 (~18x FY25 PER)

Indian equity market tumbled to log its worst session in over four years as poll trends indicated a closer than anticipated fight for the incumbent Narendra Modi government.

The NSE Nifty 50 closed 5.93% or 1,379.4 points higher at 21,884.5, while the S&P BSE Sensex ended 5.74% or 4,389.7 points up at 72,079.

Intraday, Nifty fell as much as 8.52% to 21,281.4, the highest intraday fall since March 23, 2020, while Sensex declined 8.15% to 70,234.4.

During the session, the Nifty 50 companies' market capitalisation loss widened to Rs 10 lakh crore, while the Nifty recorded its biggest intraday decline in over four years.

After opening at Rs 83.24, the Indian rupee depreciated 38 paise to Rs 83.53 against the US dollar.

The stock volatility gauge, India VIX, — which fell over 22% after exit polls — rose over 51% to 31.7 during the session. This is the biggest intraday jump since August 24, 2015.

This rising VIX isn't solely due to election dynamics but also due to global factors such as escalating tensions in the Middle East and rising US Treasury yields also exacerbate market concerns, according to Trivesh D, chief operating officer, Tradejini.

Shares of Reliance Industries Ltd., HDFC Bank Ltd., ICICI Bank Ltd., Larsen & Toubro Ltd., State Bank Of India weighed on the index.

While those of Hindustan Unilever Ltd., Nestle India Ltd., Hero MotoCorp Ltd., Britannia Industries Ltd., Tata Consultancy Services Ltd., cushioned the fall.

All Nifty sectors except Nifty FMCG fell with Nifty PSU Bank taking the most by 15.1% during the session.

Broader markets underperformed benchmarks. The S&P BSE Midcap settled 8.07% lower, and the S&P BSE Smallcap closed 6.79% lower.

On BSE, 19 sectors closed sharply lower out of 20, and one settled higher. The S&P BSE Utilities was the worst-performing sector, and the S&P BSE FMCG was the top sector.

Market breadth was skewed in favour of sellers. Around 3,337 stocks declined, 500 advanced, and 97 remained unchanged on the BSE.

• The local currency closed 38 paise lower against the U.S. Dollar at 83.53.

• It closed at 83.15 on Monday.

Source: Bloomberg