Street signs: TaMo may be added to Sensex, LIC GMP edges higher, and more

TaMo may be added to Sensex

Tata Motors is expected to get added to the Sensex during the index’s next rebalancing which will be effective from June 17. The automobile firm could dislodge pharma company Dr. Reddy's Laboratories from the index. The move could lead to passive inflows of Rs 1,179 crore in Tata Motors and an outflow of Rs 768 crore from Dr Reddy’s, according to analyst Brian Freitas of Periscope Analytics, who publishes on Smartkarma. Inclusion of Tata Motors will also lead to the inclusion of its DVR, which will see passive buying worth another Rs 157 crore. Freitas said due to sector bias, there is a close possibility of Hindalco Industries getting included to the Sensex instead of Tata Motors. 

LIC GMP edges higher

The grey market premium (GMP) for shares of Life Insurance Corporation of India (LIC) has firmed up in the past few days. According to market players, the GMP has increased from Rs 40 per share to almost Rs 80 per share. This translates into a gain of 8.5 per cent over the top-end of the price band of Rs 902-Rs 949 per share. For those applying in the policyholder and retail categories, the gains will be slightly higher at almost 9 per cent given the discount of Rs 60 per share and Rs 45 per share, respectively. Market players said the GMPs can move higher or lower depending on factors such as global volatility, domestic market performance and institutional investor demand in the IPO.

Fall in domestic IT mirrors Nasdaq

Technology stocks have been a darling of investors in the post-pandemic world. However, with central banks making a hawkish pivot to rein in soaring inflation, some of the shine around high price-to-earnings (P/E) tech stocks is coming off. In April, the Nifty IT index crashed 13 per cent, mirroring the tech-heavy Nasdaq index of the US. The Nasdaq dropped 12 per cent last month, in what was its worst-monthly showing since October 2008. Analysts say the tech stocks are losing their appeal globally as the imminent rate hikes have raised a question mark over the sustainability of high growth rates and valuation multiples.