Slippery slope

Nifty50: 15,360 ▼ 331 (-2.1%)
Sensex: 51,495 ▼ 1,045 (-1.9%)

Hello, people!

What are the odds of making 5x on investments in a single day? For a man from Nagpur, those odds were skewed firmly in his favour. When he tried to withdraw ₹500, the ATM dispensed ₹2,500! 

Meanwhile, investors were left with no such hopes in the topsy-turvy markets today. They opened on a strong note, only to plummet deep into negative territory. More on that below.

• Despite a strong opening, markets fell steadily throughout the day, with the Nifty50 closing at a fresh 52-week low.
• In all, 48 of the Nifty50 closed in the red.
• The market mood was clearly bearish, after the Fed’s rate hike on Wednesday. The Bank of England also raised interest rates by 0.25% on Thursday.

All the Nifty sectoral indices closed in the red, with Metal (-5.2%) and Media (-3.2%) witnessing the highest losses.

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What’s trending

⭐ US Fed hikes rate, markets react 😓

On Wednesday, the US Federal Reserve announced a 0.75% hike in interest rate to 1.75%. The move is aimed at tackling inflation, which is at a 40-year high. This is the biggest rate hike by the Fed since 1994. It has also hinted that it could further hike rates by later in the year, taking the rate up to 3.4% by the year-end.

⭐ Shriram Group cos to merge 🤝

SRTRANSFIN (NSE): 1,140 ▼ 9.3 (-0.8%); SHRIRAMCIT (NSE): 1,630 ▼ 17.6 (-1%) 

The RBI has given its nod to the Shriram Group for the merger of its three companies Shriram City Union Finance and Shriram Capital with Shriram Transport Company. The merger will make it the largest non-banking financial company (NBFC) in India. The combined entity, Shriram Finance Ltd, will have their lending products under one roof.

⭐ Cooking oil prices dip 🍳

AWL (NSE): 601.3 ▼ 31.6 (-4.99%)

Amid rising prices of household staples, there is finally some relief. Edible oil makers have cut prices of palm, sunflower and soybean oil by up to ₹15 per litre, as global prices have declined. Cooking oil is a major contributor to food inflation, and the fall in its price could bring down inflation.

⭐ India’s fight against epidemics gets a boost 🦠

The US has announced a funding of $122 million to India's top three medical research institutions in their fight against avoidable epidemics. The funding will be spread over a period of 5 years, and will be given to the Indian Council of Medical Research (ICMR), National Institute of Virology (NIV) and National Institute of Epidemiology (NIE).

⭐ Netflix to bring Squid Game to reality 🦑

Have you ever wondered what a real-life Squid Game show would be like? Well, Netflix is already working on an answer. Apparently, the streaming giant has approved a reality TV show that will play out just like Squid Game, minus the bloodshed. The show will have 456  contestants, and the winner will walk away with a cash prize of $4.56 million.

In Focus

Soaring jet fuel price grounds airline stocks

If you have planned your next vacation, you might want to book those air tickets ASAP! With rising aviation turbine fuel (ATF) prices, airfares are going to the moon. Spicejet will hike prices by 10-15% across routes. This year alone, stocks of airline companies like Spicejet and Indigo have nosedived 18-40% as investors fret about the impact on demand. Let's analyse.

Aviation companies have been facing turbulence due to increasing ATF prices. On Thursday, state-owned fuel retailers increased ATF prices by 16.3%. As a result, jet fuel prices touched an all-time high of ₹1.41 lakh per kilo litre (kl) in the national capital. 

Jet fuel prices are up by nearly 95% since January 2022, moving up from ₹72,062 to ₹1.41 lakh per kl. The rising ATF prices lead to high operational cost and impact profit margins as fuel cost constitutes over 40% of the operating cost of airlines.

The ongoing Russia-Ukraine conflict is one of the root causes of the jet fuel price rise. The conflict has led to a removal of Russian oil from the market, leading to low supply and a steady rise in global crude oil prices since February 2022. And this has negatively impacted aircraft carriers. Meanwhile, the depreciation of the rupee against the US dollar has also hit the airlines, as substantial part of the expenses are either dollar-denominated or linked to the dollar.

So did this news make you want to fly to the hills? Well, you're stuck in a Catch-22 situation.

IPO Corner

According to reports, electric two-wheeler manufacturer Ather Energy is in talks with investment bankers to launch its IPO in the near future. The management is reportedly trying to understand what valuations Ather Energy could get if it launches the public issue in the coming quarters. In May, the company managed to raise $128 million (₹999 crore) from investors, at a valuation of around $1 billion.   

Good to know

What is an option chain?

An option chain is a list of available options contracts for a certain stock or index. It shows all the puts and calls, and their respective expiration, strike prices and other information. It is updated in real-time and shows the last price and trading volume. Most brokers use the options chain to display options quotes as it allows users to quickly scan activity, open interest and price changes.

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