Market Wrap Podcast, Oct 29: Here's all that happened in the markets today

The markets exhibited high amounts of volatility for the second day in row on the back of unabated selling pressure in select index heavyweights. The BSE Sensex tumbled to a low of 59,089, but eventually ended 678 points lower at 59,307. In the process, the BSE index has now shed 5 per cent (2,938 points) from its recent peak of 62,245.

The NSE Nifty, on the other hand, closed 185 down at 17,672. In intra-day trades on Friday, the 50-share index dipped to a low of 17,613. On a weekly basis, the Sensex and the Nifty have declined 2.4 per cent and 1.9 per cent, respectively.

The broader markets, however, outperformed the benchmark indices in trade today. The BSE Midcap index edged 0.2 per cent higher, while the Smallcap index slipped 0.4 per cent.

Sectorally, only private bank and IT stocks ended in the red today. The Nifty IT and Private Bank indices fell 1.5 per cent each, followed by the Nifty Bank index, down 1 per cent. On the contrary, the Nifty PSU Bank index which, at one point in time was over 3 per cent down on the NSE, bounced back to end 1.45 per cent higher. All other sectoral indices gained up to 1 per cent.

The last two weeks' heavy selling has been attributed to a persistent selling by FIIs, who have been net sellers to the tune of more than Rs 20,000 crores for the month of October. The valuation risks have been one the main concerns for foreign investors as they are specifically coming to the fore now as few sections of the markets expect growth momentum to slow in the wake of sticky inflation.

However, at a time when most marquee global research & brokerage houses such as UBS, HSBC, Nomura and Morgan Stanley have downgraded Indian equities citing their rich valuation, Christopher Wood, global head of equity strategy at Jefferies has reiterated his bullish view. He remains structurally overweight on India, and would look to buy Indian stocks on every decline.

Wood believes any sell-off in Indian equities triggered by tapering / tightening scare on Wall Street will provide opportunities to add to Indian equities, most particularly if this coincides with a further likely rise in the oil price on an accelerating re-opening of the global economy.

Now, coming back to individual stock action during today's session, shares of IRCTC clocked a sharp intra-day recovery after the Ministry of Railways withdrew the decision which said half the revenue that accrues to the company through the convenience fee on train tickets will go to the Ministry of Railways. The shares closed at Rs 845.6 per share, down 7.45 per cent on the BSE, having recovered 30 per cent from the day's low of Rs 650, which was 29 per cent lower than its previous close.

Besides, shares of CarTrade Tech dropped 7 per cent and registered a new low at Rs 1,153 on the BSE in Friday’s intra-day trade after the company reported a net loss for the second straight quarter of the current fiscal. For Q2FY22, CarTrade Tech reported consolidated net loss of Rs 35.35 crore against profit after tax of Rs 10.87 crore in Q2FY21. In the April-June quarter of the current financial year 2021-22, the company had posted a loss of Rs 46.12 crore.

On the upside, shares of breweries & distilleries companies were in demand in an otherwise subdued market with United Spirits at record high on Friday on improved growth outlook. Pioneer Distilleries and Tilaknagar Industries also registered their respective 52-week highs, surging up to 10 per cent on the BSE in intra-day trades. IFB Agro Industries, Khoday India, GM Breweries, Som Distilleries and United Breweries were trading 2 per cent to 4 per cent higher on the BSE.

On the earnings front, Dr Reddy's Labs reported 30 per cent year-on-year growth in profit after tax at Rs 992 crore in September quarter, aided by healthy revenue growth. The pharmaceutical company had reported a profit of Rs 762 crore in the year-ago quarter. Its revenue grew 18 per cent on year; Ebitda 23 per cent; and Ebitda margins expanded 110 bps YoY. The shares ended 2 per cent up on the BSE.

Adani Power, on the other hand, reported a consolidated net loss of Rs 231 crore compared with a profit of Rs 2,228 crore YoY. Its revenue dropped 33 per cent on year to Rs 5,184 crore and Ebitda 71 per cent to Rs 1,163 crore. The shares settled 3 per cent lower today.

In the primary market, the 3-day issue of online wellness seller Nykaa has been subscribed 3.6 times till 4 PM on day 2 of the issue while Fino Payments Bank's issue has been subscribed 45 per cent.

Next week, the markets will look forward to Manufacturing and Services PMI data for India and the monthly auto sales figures, the IPOs of Policybazaar.com, Nykaa, and Fino Payments bank, and the outcome of the US Federal Reserve meeting for cues on when the central bank plans to hike rates. On Thursday, the exchanges will hold a special Muhurat Trading session in the evening to usher in Samvat 2078. Bharti Airtel, SBI, HDFC, IRCTC, Tata Motors and HPCL are some of the prominent companies that are scheduled to announce their September quarter results this week.