Topsy-turvy

Nifty50: 16,858 ▼ 148 (-0.8%)
Sensex: 56,598 ▼ 509 (-0.8%)

Greetings, people!

Most of us fail to understand why the markets behave the way they do, just like we are not able to decode a doctor’s handwriting. But there are always exceptions. A Kerala doctor’s prescription has gone viral on social media for his neat handwriting. If only markets were this easy to understand.

• After a gap-down opening, the benchmark indices recovered, only to slip back into negative territory.
• In all, 35 of the Nifty590 stocks closed in the red.
• The rupee fell to yet another record low of 81.91 against the US dollar.

Among the Nifty sectoral indices, Pharma (+0.8%) and IT (+0.2%) were the top gainers, while PSU Bank (-2.0%) and Metal (-1.9%) were the top losers.

What’s trending

⭐ L&T Construction bags new orders 

LT (NSE): 1,831 ▼ 10 (-0.5%) 

L&T Construction, a wholly owned subsidiary of Larsen & Toubro, has secured multiple orders. These include an order to construct a medical college and hospital in Assam. The 430-bed hospital will be completed in the next 36 months. The company has also secured an order to construct a commercial office at Bengaluru, which will be completed in 12 months. The combined order size of both projects is in the range of ₹1,000 crore to ₹2,500 crore.

⭐ Axis Bank to buy stake in Go Digit Life

AXISBANK (NSE): 713 ▼ 24 (-3.2%)

Private lender Axis Bank has signed a non-binding agreement to invest ₹50-70 crore in Go Digit Life Insurance for a stake of up to 9.9%. Go Digit Life Insurance plans to enter the life insurance business in India, subject to regulatory approvals. Last month, HDFC Bank had also announced plans of acquiring a 9.9% stake in Go Digit Life.

⭐ Dabur enters premium tea segment

DABUR (NSE): 565 ▲ 4.5 (+0.8%)

FMCG major Dabur India has launched a new black tea product under the premium category. With this launch, the company has entered the ₹5,600 crore premium tea market. As per an industry report, the packaged tea market is growing at a CAGR of 8%. The company management said Dabur also plans to enter the loose tea market.

⭐ Godrej Properties buys land parcel

GODREJPROP (NSE): 1,147 ▼ 7.6 (-0.6%)

Real estate developer Godrej Properties has acquired a new land parcel in Bengaluru. As per the company, the project has an estimated booking value potential of ₹750 crore. The new project will be spread across 7 acres and has a potential for developing nearly 600,000 sq. ft. of saleable area.

In Focus

Indian companies face European troubles

In the past one month, shares of companies like Mastek, Tata Motors, Balkrishna Industries and Biocon have declined in the range of 8% to 15%, compared to 5% fall in the Nifty. At first look, there is nothing common between these stocks. However, there is a key factor which is leading to the fall in the stock prices. Read on to know what it is.

The above-mentioned companies derive a major part of their revenue from the European region. For instance, IT firm Mastek gets nearly 82% of its revenue from European countries.. Meanwhile, other firms derive 15% to 51% of their revenue from Europe. 

Export revenue is generally good for any firm. However, at present, the European economy is witnessing one of its worst energy crises. Soaring gas prices after the Russia-Ukraine conflict are pushing the Eurozone towards an economic slowdown. 

As a result, export-driven industries such as IT, pharma and auto ancillaries are witnessing subdued demand from Europe. In fact, some industries like the IT sector are witnessing a dual blow. On the one hand, the appreciation of the rupee against the pound and euro has led to lower value per order. At the same time, reduced IT spending by European clients is impacting new deal wins. 

As a result, investors are taking a cautious approach towards companies having a major exposure to European countries. 

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Good to know

What is a non-convertible debenture?

A debenture is a long-term financial instrument issued by a company to raise funds from the public. Debentures are of two types: convertible and non-convertible. Non-convertible debentures (NCDs) cannot be converted into stocks and are issued for a fixed time period. These offer several benefits to the owner like high liquidity through stock market listing, tax exemptions and safety. In India, NCDs are issued for a minimum maturity period of 90 days.

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