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End Session Commentary

Sensex drops 398 pts, Nifty ends below 17,000; VIX crosses 15 mark

(17:09, 24 Mar 2023)

The frontline equity barometers ended a volatile session with steep losses on Friday. Investors' sentiment took a hit after the Finance Bill 2023 was passed by the Lok Sabha with some amendments. The Nifty settled below the 16,950 mark after hitting day's high of 17,109.45 in early afternoon trade. All the sectoral indices on the NSE ended in the red, with media, realty and metal stocks declining the most.

The barometer index, the S&P BSE Sensex declined 398.18 points or 0.69% to 57,527.10. The Nifty 50 index shed 131.85 points or 0.77% to 16,945.05.

Reliance Industries, Bajaj Finance, Bajaj Finserv and Adani Enterprises were major drags, sliding between 1.96% to 3.81%.

The broader market underperformed the benchmark indices. The S&P BSE Mid-Cap index fell 1.25% while the S&P BSE Small-Cap index slipped 1.37%.

The market breadth was weak. On the BSE, 967 shares rose and 2,541 shares fell. A total of 122 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, surged 5.17% to 15.24.

In a proposed amendment to the Finance Bill, 2023, the government has proposed to tax gains arising from debt mutual funds at the investor's slab rate, irrespective of the investment period. With this change, there is no tax arbitrage left across debt instruments be it bank deposits, debt MFs or life insurance savings products.

Further, the amended bill also hiked the securities transaction tax (STT) on the sale of F&O contracts. STT has been hiked by 23.52% on the sale of options and 25% on the sale of futures contracts.

Numbers to Watch:

The yield on India's 10-year benchmark federal paper declined to 7.321 from 7.345 in previous trading session.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 82.4325, compared with its close of 82.2050 during the previous trading session.

MCX Gold futures for 5 April 2023 settlement advanced 0.32% to Rs 59,757.

The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.66% to 103.21.

The United States 10-year bond yield slipped 3.27% to 3.293

In the commodities market, Brent crude for May 2023 settlement declined $2.51 or 3.31% to $73.40 a barrel.

Global Markets:

The Dow Jones Futures index futures were down 274 points, indicating a weak opening in the US stocks today.

Shares in Europe and Asia declined on Friday, as investors weigh remarks from U.S. Treasury Secretary Janet Yellen, who said federal emergency actions to back up failed regional banks could be used again if necessary.

The Bank of England raised interest rates by a further quarter of a percentage point on Thursday and said it expects the surge in British inflation to cool faster than before. The BoE's nine rate-setters voted 7-2 in favour of a 25 basis-point increase in Bank Rate to 4.25%.

Japan's core inflation reading fell from its January peak of 4.2% to 3.1% year-on-year in February, government data showed Friday. Overall, nationwide inflation was at 3.3% for the month compared to a year ago, also lower than the January print of 4.3%.

Wall Street closed higher on Thursday as market participants were reassured by US Treasury Secretary Janet Yellen's reassurances that measures will be taken to keep Americans' deposits safe.

Stocks in Spotlight:

Shares of asset management company tumbled after the government proposed changes to tax gains arising from debt mutual funds at the investor's slab rate, irrespective of the investment period.

HDFC Asset Management Company, Aditya Birla Sun Life AMC, UTI Asset Management Company and Nippon Life India Asset Management fell by 1.56% to 4.77%.

The amendment has also proposed to remove long term capital gains taxation for gold ETFs and international funds, which have the same tax structure as debt schemes at present.

Reliance Industries (RIL) skid 1.96%. RIL's fuel and mobility joint venture, Jio-bp, and Piramal Group's real estate arm, Piramal Realty, announced their partnership to provide world-class EV charging solutions across all Piramal's residential projects in the MMR (Mumbai Metropolitan Region). Under this partnership, Jio-bp has installed the first set of EV charging points at Piramal Vaikunth in Thane.

Tata Steel fell 2.58%. The steel major on Thursday announced that it has acquired the balance 1.35 crore shares (24.06%) of indirect wholly owned subsidiary, Tata Steel Advanced Materials from wholly owned unit, Tata Steel Downstream Products for Rs 17.33 crore.

Emami declined 0.62%. The company announced that its board has approved a share buyback of upto Rs 186 crore at a price not exceeding Rs 450 per equity share via open market route through the stock exchange mechanism.

Lupin shed 1.35%. The drug maker on Thursday announced that it has received tentative approval from the United States Food and Drug Administration (USFDA) for its abbreviated new drug application (ANDA), Obeticholic Acid Tablets.

Rail Vikas Nigam (RVNL) rose 0.09% after the company said that Rachana -RVNL joint venture (JV) has received letter of acceptance (LOA) for a project aggregating to Rs 252.21 crore in Gujarat.

Indian Railway Catering and Tourism Corporation (IRCTC) skid 0.83%. IRCTC said that it has signed memorandum of understanding (MoU) with Uttarakhand Civil Aviation Development Authority (UCADA) for a period of 5 years.

Punjab National Bank (PNB) slipped 2.77%. The bank announced that its board will meet on 29 March 2023 to consider the proposal for raising capital through bonds.