Nifty50: 15,774 ▼ 427 (-2.6%)
Sensex: 52,846 ▼ 1,456 (-2.6%)
Hello, people!
After the massive selloff, investors were sure to feel the Monday blues. However, in complete contrast, India's cricket governing body, BCCI, was having its best Monday yet!
While the IPL media rights e-auction is still underway, the TV and digital media rights have attracted bids worth over ₹44,000 crore for 410 matches over a period of five years. That's a broadcasting fee of over ₹107 crore (or $13 million) per game! This makes the IPL more valuable than the English Premier League.
- Inflation concerns bogged down the markets today, beating down all but a handful of stocks.
- In all, 48 of the Nifty50 stocks closed in the red.
- Investors were also cautious ahead of the domestic inflation data release for May.
All the Nifty sectoral indices closed in the red, with IT (-4.1%) and Media (-3.9%) witnessing the highest losses.
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| Top gainers | Today's change |
| Nestle India | ▲ 0.4% |
| Bajaj-Auto | ▲ 0.08% |
| NA | NA |
| Top losers | Today's change |
| Bajaj Finserv | ▼ 6.7% |
| Bajaj Finance | ▼ 5.2% |
| TATA Motors | ▼ 5.0% |
What’s trending
⭐ LIC investors feeling insecure 😓
LICI (NSE): 669 ▼ 40.2 (-5.6%)
Shares of the state-owned insurance company LIC fell over 5% on Monday as the lock-in period for anchor investors expired. The stock touched a new low and has slumped almost 30% as compared to the issue price of ₹949. Shares bought by anchor investors prior to the IPO, are locked for a predetermined period. Once the lock-in period expires, these investors can sell the shares.
⭐ FMCG stocks stay afloat as markets sink 🏊
Nestle (NSE): 16,856 ▲ 81 (+0.4%); MARICO (NSE): 499 ▲ 6.8 (+1.3%)
FMCG stocks were the silver lining to the dark cloud hanging over the markets on Wednesday. Investors sought refuge in stocks like Nestle and Marico, amid a broader market selloff. FMCG stocks are considered defensive bets, which are expected to weather the storm of inflation better than others. This is because demand for consumer goods is relatively stable even during inflationary periods.
⭐ M&M bets big on tractors 🚜
M&M (NSE): 1,011 ▼ 25.5 (-2.4%)
The world's biggest tractor maker Mahindra & Mahindra (M&M) is planning a new tractor manufacturing plant in Mohali, its first in a decade. It will invest ₹400 crore in this plant, which will have an annual manufacturing capacity of 30,000 tractors initially. The company said domestic demand for tractors has been rising in the last few months.
⭐ Adani Group to take massive debt 💰
The Adani Group is in talks with foreign banks to raise up to $4.5 billion via loans. The amount being raised will be used to fund its recent acquisition of Ambuja Cements and ACC. This will be the biggest foreign currency loan by an Indian corporation.
⭐ CNG car sales on the rise
At a time when petrol and diesel prices are soaring, sales of CNG cars have picked up. For Maruti Suzuki, CNG vehicles now account for a fifth of its overall sales. In FY23, Maruti’s CNG car sales would have surpassed that of diesel cars, had it not been for output disruptions. Tata Motors said almost half the sales of its small passenger cars Tigor and Tiago are coming from the CNG segment.
In Focus
High US inflation squeezes Indian markets
The market closed deep in the red today, starting the week on an ominous note. The benchmark index, Nifty 50 plunged by 2.6%, reacting to weak sentiments across the globe. This was triggered by a record high inflation rate in the US, which was announced late night on Friday.
Investor hopes of the US inflation having peaked out were dashed after the inflation rate accelerated to 8.6%, the highest level since December 1981. The record high inflation number has put the markets on alert as the US Federal Reserve might hike interest rates further in its two-day policy review meeting that starts on 14 June.
Besides this, investors were also cautious ahead of the domestic inflation data release for May. In April, retail inflation in India stood at 7.7%, an eight-year high.
Geopolitical tensions, rising inflation and faster policy tightening by central banks across the globe have collectively triggered relentless selling by foreign institutional investors (FIIs). In India, FIIs have been net sellers so far in 2022 and have offloaded investments worth ₹75,000 crore since the start of the new financial year, resulting in significant fall in stock market.
This massive selloff has caused a cascading impact on the Indian rupee, which dropped to an all-time low of ₹78.2 against dollar on Monday. Further, there is strong demand for the US dollar, which is generally considered a safe haven during the time of uncertainty.
If that wasn’t bad enough, rising Covid cases have soured investor sentiments further. Indeed, the situation doesn’t look very promising.
IPO Corner
Rustomjee Group company Keystone Realtors has filed its draft papers with the market regulator SEBI for a ₹850 crore IPO. The money raised through the fresh issue will be used for repaying debt and funding future real estate projects. This is one of the prominent real estate developers with a presence in Mumbai.
Good to know
What are defensive stocks?
The term 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 from market corrections. In general, FMCG and pharma stocks are considered defensive stocks
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