Markets take a breather

Blog | Market Recap

Nifty50: 18,534 ▼ 99 (-0.5%)
Sensex: 62,622 ▼346 (-0.5%)

Howdy, folks!

A groundbreaking mission to the International Space Station recently reached its historic conclusion as the crew safely touched down off the coast of Florida, USA. The world’s second fully private mission utilised a SpaceX capsule to carry three paying customers to space. The mission marked a significant milestone as one of the passengers, Rayyanah Barnawi, a stem cell researcher, became the first woman from Saudi Arabia to journey into space.

Now, let's shift our focus to another thing that went down today – the markets. Bearish sentiments have seemingly taken hold of investors. Let's dive in.

  • After four-day upward rally, markets slip below 18,600
  • In all, 29 of the Nifty50 stocks closed in the red
  • India’s GDP grew 6.1% YoY in the last quarter of FY23

Among the Nifty sectoral indices, Realty (+0.7%) and Pharma (+0.5%) were the top gainers, while Oil & Gas (-1.2%) and Metal (-0.7%) were the top losers.

Top gainers Today's change
Tech Mahindra 1,123 ▲ 25 (+2.3%)
Bharti Airtel 834 ▲ 15 (+1.9%)
Kotak Bank 2,011 ▲ 36 (+1.8%


Top losers Today's change
ONGC 153 ▼ 5 (-3.2%)
NTPC 172 ▼ 4 (-2.3%)
Axis Bank 917 ▼ 19 (-2.1%)

What’s trending

⭐ Mankind Pharma posts profit growth

Recently listed pharmaceutical player, Mankind Pharma (+0.3%) reported a profit of ₹285.4 crore for Q4FY2023, up 50% YoY, from ₹190 crore last year. Its revenue from operations stood at ₹2,052.6 crore, up 19% YoY from ₹1725.7 crore. The company reported a growth of 63% YoY in exports for Q4FY23.


⭐ CIL expects increased revenue on price hike

India’s largest coal mining company, Coal India (-1.1%), has raised the prices of its high-grade non-coking coal by 8%. The price hike will be applicable to all its subsidiaries (including NEC) across both the regulated and non-regulated sectors. With this price revision, CIL expects to earn approximately ₹2,703 crore of incremental revenue in the rest of the financial year.


⭐ Tega Industries’ shares zoom

Shares of Tega Industries hit the 10% upper circuit today based on strong Q4 results posted by the company. It reported a consolidated net profit of ₹77.2 crore, up 58% YoY from ₹48.8 crore. Its revenue from operations grew 36.6% YoY to ₹396.4 crore. The company’s board has recommended a final dividend of ₹2 per share. 


⭐Crude oil slides 

International crude oil prices were down over 3% following weak macroeconomic data from China. Manufacturing activity in the county contracted faster than expected in May due to lower demand. The manufacturing purchasing managers' index (PMI) dropped to 48.8 from 49.2 in April and below the market forecast of 51.4. A lower PMI number worries investors as it indicates, among other things, lower demand for oil.

In Focus

AMC stocks make gains

Shares of leading asset management companies (AMCs) have been seeing significant gains, with HDFC AMC, UTI AMC, and Nippon Life, rising in the range of 5 to 11% this month. This comes after there was clarity from SEBI on regulatory changes in the total expense ratio (TER). Wondering what TER is and how it led to stock gains? Let's find out 

What is total expense ratio (TER)?

The total expense ratio is the total fee that is associated with managing mutual funds and is charged to investors annually. The TER is calculated as a percentage of the scheme’s average Net Asset Value (NAV). Mutual funds are permitted to charge these fees to cover operating expenses like sales and marketing costs. 

How will it impact AMCs?

Last month, market regulator SEBI proposed bringing all taxes such as GST on fund management, securities transaction tax (STT) and brokerage under TER. Currently, these charges are paid by investors over and above the TER. Secondly, SEBI aims to cap the maximum permissible TER. Experts believe these changes could create an expense burden and lower the profitability of AMCs. 

However, SEBI has clarified that AMCs have the option to pass on these additional costs to subsidiaries like MF distributors, which could help cushion the impact of these changes. Additionally, AMCs can obtain a limited-purpose membership with the stock exchange to execute their trades, which could lower their trading costs. 

Clarity on regulatory changes in TER along with expectations that it won’t hurt long-term profitability have fuelled the recent rally in AMC stocks.   

Overall, the recent surge in AMC stocks has captured investors’ attention. Nevertheless, they should remain cautious about the potential impact on AMCs’ profitability, particularly due to the recent removal of tax benefits on debt mutual funds, which was announced during the Union Budget.

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