Down, down, down

Nifty50: 16,887 ▼ 207 (-1.2%)
Sensex: 56,788 ▼ 638 (-1.1%)

Hey, there!

No one likes to be told to buy groceries on the way back from a long day at work. But for one American man, it turned out to be a lucky affair. He won $190,736 in the lottery after he stopped at a store to buy groceries his wife asked for. It pays to listen to your wife, guys!

• Markets started the week on a negative note, giving away most of the gains of the previous trading session.
• In all, 42 of the Nifty50 stocks closed in the red.
• Manufacturing activity in the Eurozone declined to a 27-month low of 48.4 in September.

Among the Nifty sectoral indices, Pharma (+1.1%) was the sole gainer, while Metal (-3.0%) and PSU Bank (-2.6%) were the top losers.

What’s trending

⭐ Car sales continue to rise

TATAMOTORS (NSE): 397 ▼ 7.1 (-1.7%), MARUTI (NSE): 8,569 ▼ 259 (-2.9%)

Car makers reported robust sales in September. Maruti Suzuki’s domestic passenger vehicle (PV) sales rose by 135% year-on-year (YoY) to 1.4 lakh units. Meanwhile, Tata Motors’ PV sales stood at 47,654, up 85% YoY. Similarly, SUV maker Mahindra & Mahindra reported a 163% jump in PV sales to 24,508 units.

⭐ Windfall tax slashed further

ONGC (NSE): 132 ▲ 5.8 (+4.5%), OIL (NSE): 180 ▲ 5.6 (+3.2%)

The government, in its sixth fortnightly review on Sunday, cut down the windfall taxes further. Taxes on domestically produced crude oil have been cut down to ₹8,000 per tonne from ₹10,500 per tonne. Meanwhile, the export tax on aviation fuel was scrapped completely and reduced to ₹5 per litre on diesel. The reduction in the tax rates was in line with the fall in crude oil prices in the international markets. 

⭐ Ipca Labs expands capacity 

IPCALAB (NSE): 934 ▲ 19 (+2.0%)

Shares of Ipca Laboratories rose today after the company commenced trial production at its new plant in Madhya Pradesh. The new facility has been set up at a cost of ₹250 crore and will be used to manufacture active pharmaceutical ingredients (APIs).

⭐ India’s PMI at 3-month low

The country’s factory growth fell to a three-month low in September due to a moderation in demand and output. The Manufacturing Purchasing Managers’ Index (PMI), an indicator of manufacturing activity based on a survey of purchasing managers, fell to 55.1 in September from 56.2 in August.

In Focus

Pharma stocks make a turnaround

Investors had turned cautious towards the pharma sector in the post-Covid era as the industry faced a slowdown after the pandemic. However, in the past few weeks, the pharma sector is seeing strong traction. In fact, the Nifty Pharma index has risen by over 6% in the last 11 trading sessions while the Nifty50 saw a decline of 3.7%. What’s driving this turnaround? Let’s find out.

In the recent past, rising interest rates and inflationary pressures have hurt market sentiments. As a result, investors are looking for safety and sectors like pharma that are defensive bets when markets turn volatile are witnessing fresh investments. As per market experts, demand in the pharma sector more or less remains stable during inflation or recession, which ensures a reliable business outlook. 

Besides this, the pharma sector is likely to benefit from the easing price erosion in the US, which was caused by aggressive stockpiling during the pandemic. In addition, the industry will likely benefit from high-growth business opportunities in the complex generics and branded formulations.

Most Indian pharma companies earn revenue in dollars from the US, which is the most important market, contributing about one-third of total revenues. The recent fall in the rupee against the US dollar will also provide a boost to the pharma industry.

Boosted by these positive factors, the sector is witnessing fresh fund inflows. In fact, as per latest available investment data, foreign portfolio investors (FPIs) pumped in nearly ₹1,737 crore in pharma stocks in the first 15 days of September 2022.

IPO Corner

Electronics Mart India, a leading consumer durables and electronics retailer, is set to launch its ₹500 crore IPO on 4 October 2022. The price band for the IPO is ₹56-59 per share, while the lot size is 254 shares.

Click here to pre-apply for the IPO on Upstox.

Good to know

What are defensive stocks?

Defensive stock refers to the stock of a company that has maintained a record of stable earnings and continuous dividend payments through periods of economic downturn. Typically, investors hold these stocks in order to ‘defend’ their portfolio at a time when the markets see corrections. In general, FMCG and pharma stocks are considered defensive stocks as they are not impacted much during a period of economic downturn.

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