Meltdown 🌋

Nifty50: 15,808 ▼ 359  (-2.2%)
Sensex: 52,930 ▼ 1,158 (-2.1%)

Hello, folks!

No prizes for guessing, the markets are still down.🙄 And before you say, “Tell me something I don’t know,” let's get you up to speed on inflation, and how it’s causing the markets to melt down. More details ahead.

• Markets plummeted ahead of the India inflation numbers and concerns over the US inflation, which continues to hover over 8%. 
• In all, 45 of the Nifty50 stocks closed in the red, indicating broader weakness.

All of the Nifty sectoral indices closed in the red with PSU Bank (-4.2%) and Metal (-3.5%) witnessing the biggest loss.

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What’s trending

⭐Tata’s electric drive 🔋

As part of its transition to be “future-ready”, Tata Group is planning to launch a "battery company". While details are awaited, battery manufacturing could give a boost to the group's EV and renewables businesses. Tata Motors is already the country's leading player in the EV space. Recently, it also launched its first electric commercial vehicle in the form of Tata Ace EV.

⭐ PNB on the backfoot 🏦
PNB's shares hit the 10% lower circuit after weak Q4 results. Its net profit plunged 66% year on year to ₹202 crore despite a 5% growth in its net interest income to ₹7,304 crore. Profit was impacted after the bank set aside ₹325 crore on account of a fraud. Its asset quality, however, improved as its gross non-performing assets as a percentage of total loans came down to 11.7% from 12.8%.

⭐ Kalpataru powers on ⚡
Engineering, procurement, and construction company Kalpataru Power Transmission and its subsidiaries have secured new orders worth ₹4,474 crore. Its power transmission business received orders of ₹1,957 crore, while its civil engineering subsidiary JMC bagged water supply and B&F projects of ₹2,348 crore. It has also received orders worth ₹169 crore for oil and gas pipeline projects in India and Middle East. 

⭐ Its raining IPOs 💸

Despite the weak markets, the IPO deluge continues. Fertiliser company Paradeep Phosphates will launch its ₹1,502 crore IPO next week on Tuesday (17 May). Meanwhile, the ₹472 crore IPO of luxury watch retailer Ethos will launch next week on Wednesday (18 May).

⭐ Apple slips, Aramco rises 👍

Apple has lost its spot as the world’s most valuable company by market capitalisation amid a slump in tech stocks. It has been replaced by Saudi Aramco, whose shares have gained from a spike in oil prices. Aramco was valued at $2.4 trillion at the close of market as compared to Apple's $2.3 trillion at close on Wednesday.

⭐ Crypto falls off a cliff 😱
The crypto market is in a free fall with prices of several top tokens falling to new lows as the sell-off intensified. The price of Bitcoin crashed by 6% in one day to its lowest level in 16 months, amid inflation concerns in the US. Other major cryptocurrencies also continued to fall and were dragged down by the collapse of TerraUSD, the so-called stablecoin.

In Focus

Inflation swells, market melts

The Nifty50 has tumbled over 7% since the beginning of May. A major factor driving this fall is that foreign investors are pulling out money by the truckloads. They have sold shares worth over ₹11,000 crore in May and nearly ₹1.5 lakh crore in 2022. The reasons seem obvious. Initially, the Russia-Ukraine war and the rise in crude oil prices were inflicting pain, and now the rising interest rates are intensifying it. 

US inflation rose by 8.3% in April, near its 40-year peak. At 7.7%, India's retail inflation figure for April is at its highest level since May 2014. To combat inflation, central banks around the world are raising interest rates. The Fed recently hiked rates by 0.5%, while the RBI raised them by 0.4%. And this has spooked investors further.

The Nifty has corrected nearly 10% so far in 2022. After such major corrections, the markets go into an oversold zone, which means stocks are selling cheaper than they should be. This may tempt some investors to "buy the dip". However, experts say, “don't try to catch a falling knife”. 

Amid this market mayhem, stocks in defensive sectors like FMCG, pharma and utilities are expected to remain stable. They could provide the cushion your portfolio needs!

IPO corner

Weak market sentiments are dampening the IPO party mood. On Day 2, the IPO of logistics services company Delhivery was subscribed around 23%. On the other hand, Prudent Corporate’s IPO was fully subscribed on Day 3. 

Meanwhile, the ₹165 crore-IPO of Venus Pipes and Tubes was subscribed more than 4 times on . Click here to apply for these IPOs on Upstox.   

Good to know

What is an allotment date?

After the subscription for an IPO closes, investors await the allotment of shares. The allotment date is the day on which shares are alloted to investors. The allotment date is usually around five to six days after the subscription for an IPO closes. If the IPO is oversubscribed, the allotment is decided by a draw of lots. Investors can check their allotment status on Upstox website, the BSE website or the respective IPO registrar’s website.

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