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Nifty holds 16,200; Sensex slumps 1,016 pts
(15:47, 10 Jun 2022)
The domestic equity benchmarks slumped on Friday, resuming its losing run after a day's gap. The Nifty settled above the 16,200 mark after hitting the day's low of 16,172.60 in mid-afternoon trade. All the sectoral indices on the NSE ended in the red. Financial services, IT and oil & gas shares witnessed major selling pressure. Investors remained cautious ahead of the US inflation data expected later today.

As per provisional closing basis, the S&P BSE Sensex, was tumbled 1,016.84 points or 1.84% to 54,303.44. The Nifty 50 index fell 276.30 points or 1.68% to 16,210.80.

In the broader market, the S&P BSE Mid-Cap index lost 0.64% while the S&P BSE Small-Cap index was down by 0.70%.

Sellers outnumbered buyers. On the BSE, 1,311 shares rose and 1,995 shares fell. A total of 123 shares were unchanged.

Economy:

Fitch Ratings has revised the Outlook on India's long-term foreign-currency issuer default rating (IDR) to 'stable', from 'negative', and has affirmed the IDR at 'BBB-'.

The outlook revision reflects Fitch Ratings' view that downside risks to medium-term growth have diminished due to India's rapid economic recovery and easing financial sector weaknesses, despite near-term headwinds from the global commodity price shock. It expects robust growth relative to peers to support credit metrics in line with the current rating.

High nominal GDP growth has facilitated a near-term reduction in the debt-to-GDP ratio, but public finances remain a credit weakness with the debt ratio broadly stabilising, based on our expectation of persistent large deficits. The rating also balances India's external resilience from solid foreign-exchange reserve buffers against some lagging structural indicators.

The credit rating agency said that India's economy continues to see a solid recovery from the COVID-19 pandemic shock. GDP recovered by 8.7% in the fiscal year ended March 2022 (FY22), and Fitch Ratings forecasts GDP growth to remain robust at 7.8% in FY23 compared with the 3.4% 'BBB' median.

However, this is a downward revision from its 8.5% forecast in March as the inflationary impacts of the global commodity price shock are dampening some of the positive growth momentum.

Buzzing Index:

The Nifty Oil & Gas index fell 2.08% to 8,017.65. The index has gained 1.96% in the past trading session.

Among the components of the Nifty Oil & Gas index, Adani Total Gas (down 3.92%), Gujarat Gas (down 3.32%), Reliance Industries (down 3.22%), Indraprastha Gas (down 2.09%) and GAIL (India) (down 1.88%) were the top losers.

Stocks in Spotlight:

Transformers and Rectifiers (India) jumped 8.40% to Rs 31.60 after the company said that it has been awarded orders of transformers for total contract value of Rs 186 crore from one of the State Utility. With this order, the company's order book as on date stands at Rs 1,482 crore.

Life Insurance Corporation of India (LIC) fell 1.68% to Rs 709.80 as the lock-in period for anchor investors is expected to end on 13 June 2022. Anchor investors are marquee institutional investors who are allotted shares in a company ahead of its initial public offer (IPO). The end of lock-in period will allow anchor investors to sell their existing shares in the market. Ahead of the IPO, LIC on 2 May 2022 raised Rs 5,627.27 crore from anchor investors by allotting about 5.93 crore shares to 123 investors at Rs 949 per share.

Oriental Aromatics jumped 10.83% to Rs 583.15 after the company said that its proposed Greenfield project in Mahad (Maharashtra) received environmental clearance. The company's wholly owned subsidiary, Oriental Aromatics & Sons, secured the environmental clearance for the proposed Greenfield project for manufacturing speciality chemicals & chemical intermediates at Mahad, Raigad, Maharashtra. The State Environment Impact Assessment Authority (“SEIAA”), Ministry of Environment, Forest and Climate Change, Government of India, granted the environmental clearance vide its letter dated 9 June 2022.

Welspun Enterprises rallied 6.34% to Rs 106.50 after the company announced that it has executed definitive agreements to exit its portfolio of operating road concessions (Highway Portfolio) to Actis Highway Infra (Actis). The company sold the portfolio for an aggregate enterprise value (EV) of approximately Rs 6,000 crore. The entire transaction is expected to be completed by 31 March 2023, subject to completion of customary and regulatory compliances and approvals from NHAI, PWD, and lenders.

HFCL fell 0.31% to Rs 63.55 after the company said that it has received the purchase orders aggregating to Rs 73.39 crore or supply of unlicensed band radios along with accessories and optical fibre cables. The company has bagged a contract worth Rs 51.09 crore from one of the private telecom operators of the country for supply of UBRs (unlicensed band radio) along with accessories. The order has to be executed by September 2022

IIFL Finance jumped 6.38% to Rs 350 after a wholly owned arm of Abu Dhabi Investment Authority (ADIA) invested Rs 2,200 crore for a 20% stake in IIFL Home Finance. IIFL Home Finance, a wholly owned subsidiary of IIFL Finance, is engaged in the business of providing home loans, loans against property and construction finance. The company has assets under management of Rs 23,617 crore as of 31 March 2022. It is headquartered in Gurugram with presence across 16 states and 2 union territories with over 200 branches.

Asian Granito India rose 0.62% to Rs 48.40 after the company said that Amarendra Kumar Gupta has tendered his resignation from the statutory position of chief financial officer (key managerial personnel) of the company with effect from 9 June 2022. Further, the board of directors of the company, at the meeting held yesterday (9 June 2022), considered and approved the appointment of mehul shah as new chief financial officer (CFO) and key managerial personnel of the company with effect from 10 June 2022.

Power Finance Corporation was down 0.69% to Rs 107.80. The state-owned Maharatna said its wholly owned subsidiary, PFC Consulting, incorporated a special purpose vehicle (SPV), Fatehgarh IV Transmission, as its wholly owned subsidiary on 8 June 2022. The SPV was set up to develop transmission system for evacuation of power from REZ in Rajasthan (20 gigawatt) under Phase-III-Part-A1.

Global Markets:

The Dow Jones futures were down 62 points, indicating a negative opening in the US stock market today.

Shares in Europe and Asia tumbled on Friday as investors looked ahead to the release of U.S. inflation data expected later stateside. Investors are looking to see if inflation has peaked or if the Federal Reserve will need to be even more aggressive to tamp down price increases.

The European Central Bank (ECB) on Thursday confirmed its intention to hike interest rates by 25 basis points at its July meeting, with a further hike expected in September, the scale of which will be determined by the medium-term inflation outlook. The ECB also raised its inflation expectations for the euro zone significantly and downgraded its growth forecasts.

The ECB raised its inflation projections but cut its growth outlook as the conflict in Ukraine continues to weigh on confidence, consumption and investment. The ECB now sees inflation over its 2% target throughout its projection horizon, accepting that rapid price growth is not nearly as temporary as it had forecast for the past year.

In Asia, the Chinese producer price index for May jumped 6.4% as compared with a year earlier, according to figures by the country's Bureau of Statistics. The consumer price index for May climbed 2.1% from a year ago.

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