Investors, May the Force be With You ⚔️

Nifty50: 16,677 ▼ 391 (-2.2%)
Sensex: 55,669 ▼ 1,306 (-2.2%)

Hola, folks!

You know that uneasy feeling in the pit of your stomach when the rollercoaster is poised right at the very tippity-top? Something like that happened in the markets today.

The RBI Governor made an unscheduled announcement hiking repo rate and cash reserve ratio. In simple English, loans just got more expensive. 

What it also indicates is that the low-interest-rate-party is over. Which is why markets reacted by going into free fall (deets below). 

Buckle up, this ride could get bumpy! 

• RBI’s move to make capital expensive sent a shockwave through the market that knocked down index heavyweights.
• In all, 45 of the Nifty50 stocks closed in the red, indicating broad-based selling.
• It doesn’t end there. Markets could see further volatility if the US Fed hikes rates as well. The street expects a 50 basis point hike.

All of the Nifty sectoral indices ended in the negative, with Media (-4.2%) and Real Estate (-3.2%) witnessing the sharpest drops.

Did you know?

You can now place Good-Till-Triggered (GTT) orders on the new Upstox app. To know more about GTT orders, click here.

For more updates on F&O, click here.

What’s trending

⭐Tata Steel(s) the show…🔩

Tata Steel (-2.2%) reported a net profit of ₹9,835 crore, up 37% due to rising steel prices and higher demand. After the steely performance, the company has beat Tata Group's cash cow TCS to become the most profitable company for the conglomerate. What’s more, the steel maker has also proposed to split its shares in a 10-to-1 ratio.

⭐…but, Titan loses sheen 💍

The watch and jewellery company’s shares had a ‘Titan’ic fall of 4.4% as its Q4 results disappointed the street. The jewellery segment saw a 4% year-on-year drop in sales at ₹6,132 crore, due to partial lockdowns and volatility in gold prices. The jewellery segment contributes about 88% to the company's revenues. Its net profit also fell by 7% to ₹491 crore. The profit was impacted by an exceptional payout of ₹51 crore for a voluntary retirement scheme. 

⭐JSW Energy powers ahead ⚡

Shares of JSW Energy surged 4.9% intraday after it reported an eight-fold jump in its consolidated net profit to ₹864 crore in Q4. The company recorded a 64% increase in its revenue, which stood at ₹2,655 crore.

⭐Eris gets its ‘skin’ in the game 💄
Eris Lifesciences (-2.0%) has entered the dermatology segment with the acquisition of Oaknet Healthcare for ₹650 crore. The drug maker hopes to cash in on Oaknet’s coverage among nearly 11,000 dermatologists across India. Oaknet is expected to clock revenues of ₹195 crore for FY22.

⭐Citi’s ‘Oops’ moment 🏦

Like we said earlier, markets are on the edge. And so are traders, it would seem. 

Citi acknowledged one of its stock traders committed an error that sent Swedish stocks plummeting 8% on Monday. The fall lasted five minutes. It wiped out $315 billion from European markets. 

This is what is called a flash crash, or a very rapid and deep fall in markets in a short period of time. Luckily, Sweden's OMX Stockholm 30 Index quickly regained most losses.

In Focus

RBI’s bouncer stuns the markets

RBI came out all guns blazing to combat the ‘mehengaai daayan’ today. In a move that took markets by surprise, the RBI hiked repo rates by 0.4%, making capital expensive for banks, companies and people like us. Matlab, get ready to pay higher EMIs.

The RBI didn’t stop here. It also hiked CRR or cash reserve ratio. This is the money banks have to set aside as reserves. 

All combined, the RBI has made capital expensive and reduced easy availability of cash. The hope: less access to easy money equals reducing demand and will help bring prices down. 

But why did the market’s mood turn so sour? That's because markets weren't expecting such an unceremoniously large hike in rates. A 25 basis point jump was generally being anticipated. However, a 40 basis jump spooked investors, leading to a free fall in the last hour of trade. 

The good news? You will earn more on your deposits.

IPO corner

The much-awaited LIC IPO got off to a strong start. On Day 1, India’s largest IPO was subscribed by more than 50%. The portion reserved for policyholders was fully subscribed, while the retail portion was subscribed around 52%.

Click here to apply for the LIC IPO on Upstox. 

Good to know

What is ASBA?

No, we aren’t referring to the 70s band ABBA. The term ASBA, or application supported by blocked amount, is as good as music to the ears of IPO applicants. 

Earlier, an IPO applicant had to pay the application money upfront to subscribe to an IPO. However, through ASBA, the money for the shares is blocked in, but not debited from, the investor’s account until shares are allocated. The amount is debited only if shares are allocated. If not, the blocked funds are released.

Since the amount remains in their bank account, investors don’t lose out on interest. More importantly, they don’t have to wait for refunds in case shares are not allotted.

Click here to join us on Telegram for trading and investment-related videos, daily market updates, details on upcoming IPOs and more.

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