Bears trounce again

Nifty50: 17,392 ▼ 73 (-0.4%)
Sensex: 59,288 ▼ 175 (-0.3%)

Hi there!

Remember that Twitter employee who was clicked sleeping on the office floor after Musk’s takeover?

She got fired. 

Esther Crawford was one of those who were in charge of launching Twitter Blue. And if her viral pic is anything to go by, she (literally) ended up losing sleep over the job. But now, after being laid off, Crawford feels all that hard work was a mistake. 

You decide what you want to learn from this. But maybe, not taking Monday blues to heart every week could be a good start?

Umm, wait. You should probably know about today’s markets first before using any such advice.

• The markets breached the budget day’s low today.
• Of the Nifty50 universe, 33 stocks declined.
• Weak Asian market cues and global macro concerns are weighing on sentiments.

Among the Nifty sectoral indices, Realty (+2.1%) and Bank (+1.0%) were the top gainers, while Media (-3.8%) and Metal (-2.3%) were the top losers.

What’s trending

⭐ ITC shares outperforms in 2023

Shares of the cigarette-to-FMCG company have risen by over 15% this year, compared to a 3.9% fall in the Nifty50 index. This makes it the best-performing stock from the Nifty50 index. 

ITC’s stable quarterly results and consistent dividend payout has put its shares in spotlight amid market volatility, according to experts.

⭐ Tech Mahindra banks on telecom segment  

The IT company (-0.3%) expects its estimated annual revenue to hit $7 billion in the current financial year, supported by growth in the telecom vertical. According to the management, the company’s 5G solutions business has already hit the $1 billion mark, while the entire telecom solutions business is expected to contribute $3 billion to overall revenue. The company’s revenue in first nine months of FY23 was at $ 6.6 billion. 

⭐ Bharti Airtel’s 5G user-base expands

The telecom player (-0.4%) has reached the 10 million unique 5G user-mark on its network. The company rolled-out its 5G services in October 2022. Its 5G services are available across all states in the country. The management said that, the company is well-placed to cover every town and key rural areas by March 2024.   

⭐ IRB Infra gains on order win 

Shares of the infrastructure company (+5.3%) gained after it was awarded a ₹2,132 crore highway project in Gujarat. The project, which is to be executed in two years, involves upgradation of the six-lane highway on BOT (Toll) model. Following this order win, the total order book of the company stands at ₹20,892 crore, which is eight times of its FY22 revenue.

⭐FII sell-off continues 

Foreign institutional investors (FIIs) have dumped Indian equities worth ₹3,666 crore in February on a net basis. Against this backdrop the benchmark Nifty50 index has fallen 1.5% this month. Meanwhile, the market extended its losing streak today, closing in the red for the seventh straight day.

In Focus

Why are metal stocks losing shine?

Shares of metal companies witnessed intense selling pressure last week. And the sell-off has continued on Monday as well, with metal stocks declining 2.3%. In fact, the metal index, which was down 6% last week, was the top loser today. 

So, what’s the reason behind this fall? Let’s unpack.

• China slowdown

The economy of China, one of the largest consumers of metals, is on the recovery path post the pandemic. But, China’s real estate slump is a major cause of concern for metal companies. 

In December last year, the new home prices declined for the 16th consecutive month. Also, last year, the top 100 real estate developers’ sales was at 60% of the 2021 levels. This severe downturn in China’s real estate sector doesn’t bode well for metal companies globally, including India. It can lead to weakening of demand for metal and thereby subdued prices.    

• Rising inflation 

Additionally, high inflation across the world could force central banks to continue increasing rates. This has sparked fears of a severe global economic slowdown, which could in turn impact the demand for metals. 

In fact, the demand for metals has been weakening. The Tata Steel management said that in Europe, its deliveries (orders) were lower in the first nine months of FY23 due to a slowdown in demand. It added that recession concerns have weighed on steel prices. 

• Elevated input prices

Along with subdued demand, rising raw material prices are hurting metal companies. Metal companies witnessed a sharp fall in their profitability due to high energy costs and lower realisation (prices). The prices of coking coal, which is an essential input for making iron and steel, were up 17% month-on-month in January 2023. 

With these strong headwinds blowing across the metal industry, all eyes will be on China’s economic recovery and global inflation.

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