Sensex ends below 59,500, Nifty slip 100 pts; Metal, Pharma drag; FMCG gains

Indian benchmark indices joined their global peers to shed on Wednesday as traders await Fed's decision on interest rate hike. Putin's call for escalation of the war in Ukraine also did not help the sentiments.

Sensex slipped 262 points to close at 59,456 and Nifty closed at 17,718, a drop of 98 points.

Shree Cements shed 6%, while Adani Ports, Powergrid and IndusInd Bank also lost 3% in value. Britannia, ITC and Hindustan Lever gained in today's trading.

Most indices ended in the red with Metal, Pharma, Realty and Oil & Gas shedding more than a per cent. FMCG remained stable and closed in the green with a gain of more than a per cent.

Asian stocks dropped on Wednesday as investors braced for Fed's another interest rate hike. The market expects a hike of 75 basis points but there is an outside chance that the hike could be as high as 100 basis points.

Japanese stocks notched their lowest close in more than two months as investors braced for key policy meetings this week from the Fed and the Bank of Japan. The Nikkei share average settled 1.36% lower, its lowest closing level since July 19.

China's blue-chip stocks on Wednesday closed at their lowest in more than four months. Hong Kong's main stock benchmark plunged to its lowest level since mid-March.

The CSI 300 Index ended down 0.7% while the Shanghai Composite Index edged down 0.2%. The Hang Sang Index fell 1.8%.

European shares fell at the opening on Wednesday as Russia partially mobilising more troops added to investors' worries over the interest rate hike. The continent-wide STOXX 600 index dropped.

Leasing of warehousing space in India's eight major cities rose 62 per cent last fiscal to record 51.3 million square feet mainly on rising demand from third party logistic and e-commerce players, according to Knight Frank.

Property consultant Knight Frank India on Wednesday released its 'India Warehousing Market Report – 2022' in a virtual press conference.

Warehousing demand data includes spaces leased for light manufacturing/assembling.

Delhi-NCR and Mumbai markets were the top two cities in actual leasing number, but in terms of percentage growth Pune and Hyderabad were leading at 166 per cent and 128 per cent Year-on-Year (YoY), respectively. (PTI)

Volkswagen Passenger Cars India on Wednesday said it will increase prices of its entire product range by up to 2 per cent from October 1 in order to offset the impact of rising input costs.

The automaker sells models like Virtus, Taigun and Tiguan in the domestic market.

"Effective October 1, 2022, Volkswagen Passenger Cars India will be increasing prices by up to 2 per cent across its product portfolio owing to rising input costs," a Volkswagen Passenger Cars India spokesperson said in a statement. (PTI)

Economist Nouriel Roubini, who correctly predicted the 2008 financial crisis, sees a “long and ugly" recession in the US and globally occurring at the end of 2022 that could last all of 2023 and a sharp correction in the S&P 500.

“Even in a plain vanilla recession, the S&P 500 can fall by 30%,” said Roubini, chairman and chief executive officer of Roubini Macro Associates, in an interview Monday. In “a real hard landing,” which he expects, it could fall 40%. (Read More)

President Vladimir Putin declared a “partial mobilization,” calling up 300,000 reservists in a major escalation of his flagging invasion of Ukraine, which he portrayed as a fight to the death with the US and its allies.

“When the territorial integrity of our country is threatened, we will certainly use all the means at our disposal to protect Russia and our people,” Putin said in a televised national address Wednesday. “This is not a bluff.”

“Those who are trying to blackmail us with nuclear weapons should know that the wind patterns can also turn in their direction,” the president said, accusing the US and allies of seeking to “destroy” Russia.

Putin’s threats come after a Ukrainian counteroffensive in the last few weeks has dealt his troops their worst defeats since the early months of the conflict, retaking more than 10% of the territory that Russia held. The Kremlin had long resisted announcing any steps toward mobilization, seeking to limit the impact of its seven-month invasion on the Russian population, but the latest battlefield losses have underlined its shortage of manpower. (Bloomberg)

The US dollar’s rally is at risk of a reversal if the Federal Reserve sets its interest-rate outlook at a lower level than traders are betting on.

Market-implied expectations for the so-called dot plot jumped this month, with some betting the peak will be around 5%, if not higher. Markets are pricing a peak at 4.5% by March and an end-2023 rate of 4% to 4.25%. In contrast, the most recent forecasts by Fed officials in June are almost all below 4% for 2022-2024. (Full Story)

Revenues of multiplexes are set to cross pre-pandemic levels this financial year 2022-23 as more people are queuing up to watch movies after the pandemic-forced hiatus, said rating agency CRISIL Ratings.

Their revenue is expected to rise to an all-time high of over ₹6,000 crore, or 13-15 per cent above the 2019-20 level.

The sharp recovery in hall occupancy coupled with a troika of factors -- increased average ticket prices, higher spend per head on food and beverages (F&B) and the addition of screens -- are expected to script the growth story for the sector, the rating agency said in a report.

The average ticket price is expected to be ₹240-245, which is 20 per cent higher than the pre-pandemic level. (ANI)

The German government said Wednesday that it has agreed to nationalise the country's biggest gas importing company, Uniper, expanding state intervention in the industry to prevent an energy shortage resulting from Russia's war in Ukraine.

The deal with Uniper builds on a rescue package agreed in July and features a capital increase of 8 billion euros (dollars) that the government will finance. As part of the agreement, the government will gain a 99% stake in Uniper, which until now was controlled by Finland-based Fortum. The Finnish government has the largest stake in Fortum.

Germany's economy minister, Robert Habeck, said the deal was necessary because of the significance that Uniper plays in the German gas market. It still needs to be approved by the European Commission. (PTI)

The Ministry of Road Transport & Highways (MoRTH) has issued a draft amendment to the Automotive Safety Standards or AIS 156, the set of rules which contains safety regulations for the Indian automotive sector, to make safety belt reminders mandatory for rear passengers. (Full Story)

Best Agrolife shares are one of the multibagger stocks that Indian stock market has given in recent years. The agriculture stock has surged to the tune of 8,000 per cent in last six years, which has probably attracted attention of market investors. In a bulk deal executed on 20th September 2022, Quant Mutual Fund has bought 1.78 lakh shares of the company paying ₹1,222.60 apiece. This means, the mutual fund has invested ₹21,76,22,800 or ₹21.76 crore in this agro company. Best Agrolife is the latest entrant in Ashish Kacholia portfolio as the ace investor recently bought 3.18 lakh Best Agrolife shares paying ₹940.88 apiece. (Full Story)

The Asian Development Bank (ADB) has slashed India's economic growth projection for 2022-23 to 7 per cent from 7.2 per cent earlier, citing higher than expected inflation and monetary tightening.

India's economy grew 13.5 per cent year-on-year in the first quarter of 2022-23, reflecting strong growth in services, ADB said in a supplement to its flagship ADO report on Wednesday.

"However, GDP growth is revised down from ADO 2022's forecasts to 7 per cent for FY2022 (ending in March 2023) and 7.2 per cent for FY2023 (ending in March 2024) as price pressures are expected to adversely impact domestic consumption, and sluggish global demand and elevated oil prices will likely be a drag on net exports," it said. (PTI)

Ahead of the US Fed rate hike, the rupee value faltered by 8 paise to 79.82 against the US dollar in opening trade on Wednesday. The local currency also faced the heat of firm crude oil prices and a strong dollar in the overseas market.

Japanese stocks notched their lowest close in more than two months on Wednesday, tracking declines on Wall Street and amid broader Asian peers, as investors braced for key policy meetings this week from the U.S. Federal Reserve and the Bank of Japan.

The Nikkei share average settled 1.36% lower at 27,313.13, its lowest closing level since July 19.

The broader Topix fell 1.36%, marking its weakest close since Sept. 7.

"If the Fed implements a 75-basis-point rate hike, as most people expect, the market should avoid upheaval," said Yasushi Yokoyama of Aizawa Securities, adding that investors are already looking towards the next hike. (Reuters)

KEC International, a global infrastructure engineering, procurement and construction (EPC) major, on Wednesady said it has bagged new orders worth ₹1,123 crore across its various businesses in India.

KEC’s railways business has secured an order for construction of bridges and associated works for railway lines in the conventional segment in India. Its civil business bagged an order for infra works in the hydrocarbon segment. (Full Story)

Metal and Bank indices lag whereas FMCG and Consumer Durable remain stable.

Sebi chairperson Madhabi Puri Buch on Wednesday said any business model that relies on a black box and that cannot be audited or validated will not be permitted.

She also said since data is a public infrastructure, any attempt by any private party to own them cannot be tolerated.

"We are not for or against algo trading as long as there is sufficient transparency and disclosures. Business models cannot rely on a black box... therefore any claim that cannot be audited and validated cannot be permitted," Buch said addressing the Global Fintech Fest here this morning.

The warnings from the markets regulator come amid reports that it may clamp down on algo trading, which in the past has been misused by certain brokers with the connivance of top NSE officials.

Earlier this month, Sebi had issued new guidelines for stock brokers providing algorithmic trading services after it was found that certain stock brokers provide algorithmic trading facilities to investors through unregulated platforms. (PTI)

HDFC Bank, India's largest private lender, said on Wednesday it has signed a long-term data and technology agreement with Refinitiv, an LSEG business. (Reuters)

Shares of Swaraj Engines Ltd (SEL) surged over 13% to hit a 52-week high of ₹1,960 apiece on the BSE in Wednesday's trading session after Mahindra & Mahindra Ltd (M&M) on Tuesday said it will acquire an additional 17.41% stake in Swaraj Engines Ltd from Kirloskar Industries Ltd (KIL) for ₹296 crore. (Full Story)

Prathamesh Mallya, AVP- research, non-agri commodities, and currencies, Angel One Ltd's outlook on:

Gold: We expect gold to trade lower towards 48740 levels, a break of which could prompt the price to move lower to 48320 levels.

Crude: We expect crude to trade lower towards 6630 levels, a break of which could prompt the price to move lower to 6490 levels.

Base Metal: We expect copper to trade lower towards 638 levels, a break of which could prompt the price to move lower to 628 levels. 

China stocks tumbled to a more than four-month low on Wednesday, tracking global peers lower ahead of an expected aggressive interest rate hike from the U.S. Federal Reserve.

Hong Kong's main stock benchmark plunged to its lowest level since mid-March.

** The CSI 300 Index lost 1% by the end of the morning session, set to hit the lowest level since May 9, while the Shanghai Composite Index retreated 0.6%.

** The Hang Sang Index fell 1.5%, and the Hang Seng China Enterprises Index declined 1.9%. (Reuters)

GPT Infraprojects' board will meet next week on Tuesday, September 27, 2022 to consider the issue of bonus equity shares of the company. Shares of GPT Infra surged about 2% on the BSE to ₹131 apiece in Wednesday's early trading session.

Further, the company said that the date of the board meeting of the company for consideration and approval of Financial Results for the 2nd quarter and half year ended September 30, 2022 will be intimated in due course. (Full Story)

Tirthankar Das, technical & derivative analyst, retail, Ashika Stock Broking Ltd: On the technical front, Nifty formed a small positive candle on the daily chart with a long upper shadow, reflecting the presence of strong overhead resistance around 17,900-18,000 levels, it seems that Index is placed within the broader 17.500-18,000 range ahead of US FED decision on the key policy rates on Wednesday, however gradually it can be expected for the Index to head higher towards January 2022 high of 18300 while the lower end the strong support level of 17350-17400 is likely to hold. The undergoing healthy consolidation will help to cool off the overbought conditions ahead of U.S. Fed event as secondary corrections are a part of the bull market that paves the way for next leg of up move as Nifty registered a bullish golden crossover in August (50-DEMA crossing above 200-DEMA) implying major shift of momentum from a medium-term perspective. Though one need to avoid trading aggressively due to the presence of event risk in the market and the risk of a bare minimum correction of 23.6% of the entire rally from 15,183 to 18,096 comes around 17415 followed by 38.2% correction at 16990 remains. During the day index is likely to open on a negative note tracking weak global cues. However one can expect buying interest at lower levels of 17650-17675 for upside target 17900-18000.

India's banking system liquidity has slipped into deficit for the first time in nearly 40 months, according to the Reserve Bank of India. The RBI infused 218 billion Indian rupees ($2.73 billion)into banking system on Tuesday, the biggest since May 2019. Overnight rates continue to stay elevated, with one-day call money rate jumping to 5.85%, highest since July 2019.

Overnight rates continue to stay elevated, with one-day call money rate jumping to 5.85%, highest since July 2019. (Full Story)

Indian government bond yields are expected to open marginally higher on Wednesday, as U.S. yields continued their upward momentum, while markets brace for another round of aggressive monetary policy tightening from the U.S. Federal Reserve.

The benchmark Indian 10-year government bond yield is seen in a 7.24%-7.28% band, a trader with a private bank said. The yield ended at 7.2645% on Tuesday and has risen 18 basis points in the last five sessions.

"A move of 75 basis points by the Fed is factored in, but if the commentary is hawkish, we may see the break of 7.30% on the benchmark," the trader said. (Reuters)

Oil edged higher ahead of inflation-taming rate hikes from central banks that are likely to suppress demand.

West Texas Intermediate traded above $84 a barrel after closing almost 2% lower near an eight-month low on Tuesday. The Federal Reserve is expected to raise interest rates by 75 basis points on Wednesday, and put numbers on the “pain” it’s been warning of when it publishes new economic projections.

Crude is on track for its first quarterly loss in more than two years as concerns over a global economic slowdown weigh on the outlook for energy demand. The Fed decision will be followed by other central banks from Europe to Asia, which are also expected to increase borrowing costs. (Bloomberg)

Rajesh Palviya of Axis Securities recommended three stocks to buy on Wednesday session — Balrampur Chini, Biocon and IndusInd Bank. Here we list out full details:

1] Balrampur Chini: Buy at ₹379, target ₹398, stop loss ₹370;

2] Biocon: Buy at ₹299, target ₹315, stop loss ₹294; and

3] IndusInd Bank: Buy at ₹1259, target ₹1300, stop loss ₹1235.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. (Full Report)

Japanese stocks fell on Wednesday, in line with Wall Street and broader Asian peers, as investors adjusted positions ahead of key policy meetings this week from the U.S. Federal Reserve and the Bank of Japan.

The Nikkei share average was down 1.37% at 27,308.66, as of midday break. The index hit a two-week low of 27,297.5 earlier in the day.

The broader Topix fell 1.28% to trade at its lowest level since Sept. 7.

Markets have priced in a rate hike of at least 75 basis points, with an 18% possibility seen of a full percentage point, as the U.S. central bank is expected to reinforce its hawkish approach to tackle inflation. (Reuters)

Bitcoin price today remained above the $19,000 mark even as the world's largest and most popular cryptocurrency was trading more than 2% lower at $19,042. The global crypto market cap today remained below the $1 trillion mark, as it was down over a per cent in the last 24 hours at $968 billion, as per CoinGecko. (Read More)

As investors brace for a hefty rate hike from the US Federal Reserve and clues on further hikes, the Fed is set to announce its decision at the end of a two-day policy meeting later today. It is expected that it will raise the rates by another 75 basis points to a range of 3 per cent to 3.25 per cent -- which would be the third consecutive increase of that magnitude. Fed policymakers have been reiterating their commitment to bring inflation down which holds close to levels not seen in 40 years.

Strategists are looking beyond the key issue of inflation for other potential market metrics that may cause the Federal Reserve to slow its aggressive cycle of interest-rate hikes. (Read More)

Tech industry veteran Nandan Nilekani on Tuesday pitched for more credit products like Buy Now Pay Later (BNPL) on the Unified Payments Interface (UPI) after the launch of a credit card on the platform.

The National Payments Corporation of India (NPCI) on Thursday launched the Rupay credit card on UPI platform, following a RBI policy move authorising it.

"I think on the credit side, I personally see the launch of UPI and Rupay credit card as the first step of credit on UPI," Nilekani, non-executive chairman of Infosys and also one of the architects of the UPI platform, said at an event here.

Nilekani said "we are testing the waters of credit" through the launch of Rupay credit card on UPI, and called it as a "sensible first step". (PTI)

Dr V K Vijayakumar, chief investment strategist at Geojit Financial Services: "The overarching trend in the market now is India’s outperformance vis-a-vis other markets, particularly the mother market US. The big question is whether this outperformance can sustain. This is possible since the Indian economy and corporate earnings are outperforming. However, the risk is the high valuation in India- Nifty at 18000 is trading at 22 times FY23 earnings. If there is a sharp cut in the US market on recession fears triggered by sharp rate hikes or if the Ukraine war escalates, as some fear now, the Indian market too will be impacted. Otherwise, the outperformance can sustain. Domestic economy-facing segments like financials, autos, capital goods, telecom, cement and FMCG are on strong wicket."

Credit Suisse Global Wealth Report released on Tuesday showed that the Gini coefficient for India hit a peak of 82.3 in 2020 and remained the same at the end of 2021. The Gini coefficient is a measure of inequality with a higher figure denoting higher levels of inequality.

The Gini remained unchanged in 2021 from 2020 even as the household wealth in India saw a sharp jump for the same period. Total wealth in India was $14.2 trillion in 2021, up by 1.5 trillion or 12% from 2020, as per the report. (Full Story)

Delta Corp, RBL Bank, PVR, India Cements, and Escorts Kubota will remain under the F&O ban list for Wednesday. These stocks will be under the ban for the F&O segment as they have crossed 95% of the market-wide position limit (MWPL), as per the NSE. (Full Story)

Reserve Bank of India governor Shaktikanta Das on Tuesday flagged concerns on the mushrooming of digital lending apps, pointing to the need for regulated entities to increase oversight.

“I would also like to flag certain material concerns regarding the unbridled mushrooming of digital lending apps. The need of the hour is to ensure assurance of safety after following a process of green-lighting (whitelisting) and due-diligence by the regulated entities. The RBI, in association with other relevant agencies, is taking steps to address this issue and take further steps as may be necessary,” he said. (Full Story)

STOCK IN FOCUS

SAIL (CMP Rs.81)

We have a BUY rating on the company with a Target Price of Rs90.

Intraday Picks

APOLLOTYRE (PREVIOUS CLOSE: 289) SELL

For today’s trade, short position can be initiated in the range of ₹292-295 for the target of Rs.280 with a strict stop loss of ₹298.

BPCL (PREVIOUS CLOSE: 323) BUY

For today’s trade, long position can be initiated in the range of ₹317- 320 for the target of Rs.328 with a strict stop loss of ₹315.

INDIACEM (PREVIOUS CLOSE: 283) SELL

For today’s trade, short position can be initiated in the range of ₹286- 289 for the target of Rs.276 with a strict stop loss of ₹292.

Mahindra & Mahindra(M&M) Ltd on Tuesday said it will acquire an additional 17.41 per cent stake in Swaraj Engines Ltd from Kirloskar Industries Ltd (KIL) for ₹296 crore.

The acquisition will result in increasing the company's stake in Swaraj Engines Ltd (SEL) to 52.13 per cent from 34.72 per cent, M&M said in a regulatory filing.

The company proposes to acquire 21,14,349 equity shares constituting 17.41 per cent of the paid up equity share capital of SEL from KIL at a price of ₹1,400 per share, it said.

Consequently, SEL, which is currently an associate of the company, would become a subsidiary of M&M, the filing said. (PTI)

Yes Bank on Tuesday said its board has approved the sale of stressed assets worth around ₹48,000 crore to JC Flowers ARC, which has turned out to be the sole bidder for the portfolio.

The US-based asset reconstruction company (ARC) had in July this year emerged as the base bidder for the proposed sale of the identified stressed loan book of Yes Bank aggregating up to ₹48,000 crore.

As per Reserve Bank of India (RBI) guidelines on transparent bidding process, the private sector lender had conducted a Swiss challenge for inviting challenger bids.

The Swiss challenge process has now concluded and the bank has not received any challenger bids to the base bid, Yes Bank said in a regulatory filing. (PTI)

Rupak De, senior technical analyst at LKP Securities: "Nifty had started to gap up and remained range bound during the day. On the higher end, 17900 has acted as resistance leading to a close near the day's low. The trend is likely to remain positive as long as it sustains above 17700. On the higher end, a move above 17900 may induce a rally towards 18100 and higher."

In a move that could ease tension at the ports, the union government on Tuesday allowed the export of broken rice that was in transit till September 30. India banned exports of broken rice and imposed a 20% duty on exports of various other types on September 8 over food security concerns. The central government extends the period for exports of broken rice from 15 Sept till 30 September. (Full Story)

Chief Economic Advisor V Anantha Nageswaran on Tuesday said India is among the fastest growing fintech markets in the world with a market size of USD 31 billion in 2021 that is expected to reach USD 1 trillion by 2030.

Speaking at the Global Fintech Fest 2022 (GFF 2022) here, Nageswaran said, "A major shift towards a more equitable distribution of investment across sectors including InsurTechs, WealthTechs, etc, has started taking place. We are talking about bridging the digital divide and the economic divide. Therefore the focus now is on how the combination of technology and finance is enabling access to finance and access to opportunities." (ANI)

India purchased some of the nation’s most expensive liquefied natural gas shipments ever after vital Russian deliveries were canceled.

GAIL India Ltd. bought several LNG cargoes for delivery between October and November at more than double the price it paid around this time last year. The New Delhi-based company is struggling to replace supply from the former trading arm of Gazprom PJSC, which was nationalized by Germany earlier this year and is paying contractual fines rather than delivering fuel.

The global surge in natural gas prices after Russia’s invasion of Ukraine has hit price-sensitive emerging countries hard, forcing them to pay the high spot market rates or face blackouts and industrial shutdowns. India’s retail inflation surged in August due in part to higher fuel costs. (Bloomberg)