IEX shares tank, Mazagon Dock inks new deal & more

Nifty50: 18,634 ▼ 91  (-0.4%)
Sensex: 62,848 ▼ 294 (-0.4%)

Howdy, folks!

Sometimes being in rush hour traffic can feel like you’re glued to one spot for a long time. Recently, drivers in Auckland, New Zealand, were literally “stuck” after a truck carrying 22 tonnes of carpet glue toppled and spilled it on the highway. Now, that’s one sticky situation! But let’s not get stuck on this story for too long but move onto the markets for the day.

• Benchmark indices fell after rising for four days amid volatility
• In all, 38 of the Nifty50 stocks closed in the red
• Eurozone GDP shrunk 0.1% in the first quarter of 2023

Among the Nifty sectoral indices, Realty (-1.5%) and Media (-1.5%) were the top losers, while Metal (+0.1%) was the sole gainer today.

What’s trending

⭐ IEX shares tank after regulatory changes

Indian Energy Exchange (IEX) shares tumbled more than 8% today. This comes after the Central Electricity Regulatory Commission (CERC) plans to introduce the market coupling mechanism for power trading. Market coupling is the process wherein orders from all the power exchanges are aggregated and then matched to discover a uniform market clearing price. Experts believe this move will allow more exchanges to enter the market and increase competition for IEX, thereby impacting its market share.

⭐ Mazagon Dock inks new deal

Mazagon Dock Shipbuilders and Germany-based Thyssenkrupp have signed a joint agreement to develop submarines for the Indian Navy. As part of the deal, Thyssenkrupp will be responsible for the engineering and design aspects, while Mazagon Dock will oversee the construction and deliveries of submarines. Shares of Mazagon Dock have gained over 24% so far this month ahead of this deal announcement.  

⭐ IKIO Lighting IPO gets strong response

The IPO of IKIO Lighting received an overwhelming response from investors. The public issue of the LED light maker was subscribed 66 times on its last day, with the retail portion getting 13.8 times subscription. 

⭐ Crude oil rises higher 

International crude oil prices were trading higher for the second consecutive day, up 0.5%. Saudi Arabia's decision to cut oil production and a potential pause in the US Fed interest rate hikes supported the positive sentiments around oil prices.

In Focus

RBI keeps rate unchanged again

The Reserve Bank of India (RBI) kept its key policy rate unchanged at 6.5% for the second consecutive time. This comes after it raised interest rates by a cumulative 250 basis points (2.5%) between May 2022 and February 2023 to curb inflation. Let’s take a closer look. 

Reason for rate pause

The RBI said the repo rate was kept unchanged keeping in mind the easing inflation and the improving macroeconomic scenario in the domestic and global markets. Retail inflation slowed to an 18-month low of 4.7% in April 2023 from 5.7% in March 2023, well within the RBI's target range of 2-6%.

RBI’s take on inflation 

The central bank marginally reduced its FY24 retail inflation forecast to 5.1% compared to 5.2% in the previous policy. This estimate is based on the assumption of a normal monsoon in the country. 

Outlook on growth 

On the growth front, RBI expects the Indian economy to grow at 6.5% in FY24, supported by growth in service sector, moderation in commodity prices, robust credit growth and government’s thrust on capital expenditure.

How did the markets react?

The RBI’s rate decision was in line with the market expectations. Despite this, markets closed in the red mainly due to volatility caused by the weekly expiry. Barring the Metal index, all other sectoral indices ended lower. 

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