The key equity barometers extended losing run to second trading session and ended with small losses on Wednesday. A sharp rise in crude oil prices spooked investors. The jump in oil prices threatens to upend India's fiscal math and economic projections.
After hitting a high of 16,649.20 in early trade, the Nifty slipped as the session progressed and settled below 16,550 mark. PSU banks, financial services and consumer durables stocks rose while healthcare, IT and pharma stocks saw selling pressure.
As per provisional closing data, the barometer index, the S&P BSE Sensex, down 185.24 points or 0.33% to 55,381.17. The Nifty 50 index fell 61.80 points or 0.37% to 16,522.75.
The NSE's India VIX, a gauge of market's expectation of volatility over the near term, rose 1.79% to 20.85.
In the broader market, the S&P BSE Mid-Cap index fell 0.10% while the S&P BSE Small-Cap index added 0.62%.
The market breadth was positive. On the BSE 1,848 shares rose while 1,479 shares fell. A total of 135 shares were unchanged.
In the commodities market, Brent crude for August 2022 settlement was up $2 or 1.73% at $117.60 a barrel. The gains came after European Union leaders agreed to a partial and phased ban on Russian oil and China ended its COVID-19 lockdown in Shanghai.
Economy:
Goods and Services Tax (GST) collections slipped to Rs 1.41 lakh crore in May, down 16% from April's all-time high of Rs 1.68 lakh crore, data released on June 1 by the finance ministry showed. On a year-on-year basis, GST collections in May were up 44%. The collection in the month of May, which pertains to the returns for April, the first month of the financial year, has always been lesser than that in April, which pertains to the returns for March, the closing of the financial year. However, it is encouraging to see that even in the month of May 2022, the gross GST revenues have crossed the Rs 1.40 lakh crore mark.
The seasonally adjusted S&P Global India Manufacturing Purchasing Managers' Index (PMI) stood at 54.6 in May, little-changed from 54.7 in April, pointing to a sustained recovery across the sector. The above-50.0 reading was the eleventh in as many months and consistent with a solid improvement in operating conditions.
India's GDP growth in Q4 FY22 was at 4.1% year-on-year, compared to a revised growth of 5.4% for Q3 FY22. Gross Value Added (GVA), which excludes the impact of subsidies and indirect taxes, grew 3.9% year-on-year in the fourth quarter.
For the full fiscal year, GDP grew 8.7% year-on-year, compared to a contraction of 6.6% in FY21. GVA for FY22 grew 8.1% year-on-year, compared to a contraction of 4.8% in FY21.
The combined Index of Eight Core Industries stood at 143.2 in April 2022, which is an increase of 8.4% (provisional) as compared to the Index of April 2021. The production of Coal, Electricity, Refinery Products, Fertilizers, Cement and Natural Gas industries increased in April 2022 over the corresponding period of last year. The Eight Core Industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).
Final growth rate of Index of Eight Core Industries for January 2022 is revised to 4.0% from its provisional level 3.7%. The growth rate of ICI during April-March 2021-22 was 10.4% (P) as compared to the corresponding period of last FY.
New Listing:
Shares of eMudhra were trading at Rs 257.50 at 15:20 IST on the BSE, a premium of 1.50% as compared to the issue price of Rs 256.
The scrip was listed at Rs 271, representing a premium of 5.86% as compared to the issue price.
So far, the scrip has hit a high of Rs 279 and a low of Rs 256.4. Over 5.40 lakh shares of the company have changed hands in the counter till now.
The IPO of eMudhra subscribed 2.72 times. The issue opened for bidding on Friday (20 May 2022) and it closed on Tuesday (24 May 2022). The price band of the IPO was fixed at Rs 243-256 per share.
May Auto Sales Impact:
The Nifty Auto index fell 0.34% to 11,546.90. The index added 5.22% in the past four days.
Escorts fell 2.20% after the company's total tractor sales jumped 31.1% YoY to 8,421 units in May 2022 from 6,423 units sold in May 2021. On a sequential basis, tractor sales rose 1.15% in May 2022 from 8,325 units sold in April 2022. Domestic tractor sales in May 2022 stood at 7,667 tractors as against 6,158 tractors sold in May 2021, registering a growth of 24.5% year on year. Export tractor sales in May 2022 were at 754 units in May 2022 against 265 units sold in May 2021, posting a jump of 184.5% year on year.
Bajaj Auto slipped 3.65% after the company's total sales rose 1% to 2,75,868 units in May 2022 as against 2,71,862 units sold in May 2021. Sequentially, the company's total sales declined 11.23% last month from 3,10,774 units in April 2022. Domestic sales jumped 85% to 1,12,308 units while exports skid 22% to 1,63,560 units in May 2022 over May 2021. Total two-wheelers sales rose 4% to 2,49,499 units in May 2022 as against 2,40,554 units dispatched in May 2021. Commercial vehicles sales decreased 16% to 26,369 units in May 2022 from 31,308 units sold in May 2021.
Ashok Leyland rose 2%. The company's total commercial vehicle (CV) sales soared 315% to 13,273 units in May 2022 from 3,199 units sold in May 2021. Sequentially, the company's total CV sales declined 10.74% last month from 11,847 units sold in April 2022. While the total sales of medium & heavy commercial vehicles (M&HCV) jumped 307% to 7,945 units, sales of light commercial vehicles (LCVs) climbed 328% to 5,328 units in May 2022 over May 2021. In the domestic market, the company sold 12,458 units of total vehicles in May 2022, up 355% compared with 2,738 units sold in the same period last year.
Tata Motors rose 0.28% after the company's sales in the domestic & international market for May 2022 stood at 76,210 units, which is higher by 186% as compared to 26,661 units sold during May 2021. Total domestic sales jumped to 74,755 in May 2022 as against 24,552 units in May 2021. The company sold 31,414 units of commercial vehicles (CV) in the domestic market in May 2022. Domestic CV sales in the same period last year was 9,371 units. CV exports declined by 31% to 1,404 units in May 2022 over May 2021. Tata Motors' total domestic sales of passenger vehicles in May 2022 was 43,341 units as against 15,181 units in May 2021.
Eicher Motors fell 0.52% after the company's unlisted subsidiary, VE Commercial Vehicles (VECV) sold 5,637 units of commercial vehicles in May 2022, up 360.9% YoY. VECV had sold 1,223 units of commercial vehicles (CV) in May 2021. Total CV sales in the domestic market during month was 5033 units as against 656 units sold in the same period last year. The company exported 471 units of commercial vehicles (down 9.2% YoY) during the period under review. The company sold 133 units of Volvo Trucks & Buses in May 2022, which is higher by 177.1% as compared with 48 units sold in May 2021.
Maruti Suzuki India shed 0.51% after the comapny sold a total of 161,413 units in May 2022, which is significantly higher as compared with 46,555 units sold in May 2021. The company sold 134,222 vehicles in the domestic market in May 2022. Domestic sales in the same period last year was 35,293 units. Total export sales in May 2022 was 27,191 units as against 11,262 units in May 2021. Maruti Suzuki said that the shortage of electronic components had a minor impact on the production of vehicles, mainly on domestic models. The company took all possible measures to minimise the impact.
Mahindra & Mahindra (M&M) rose 1.29% after the company's passenger vehicles sales zoomed 236% to 26,904 units in May 2022 over May 2021. M&M announced that its overall auto sales for the month of May 2022 stood at 53,726 vehicles. In the utility vehicles segment, M&M sold 26,632 vehicles in May 2022, jumped by 244% year on year (YoY). Total exports for the month rose 5% to 2,028 vehicles in May 2022 over May 2021. In the commercial vehicles segment, the company sold 21,149 vehicles in May 2022. All the light commercial vehicle segments of <2T, Pickups (2T to 3.5T), >3.5T and the heavy commercial vehicles continued their growth trajectory in May 2022.
TVS Motor Company gained 0.35% after the company recorded total sales of 302,982 units in May 2022 compared with 166,889 units sold in May 2021. "The year-on-year growth is not comparable due to the low base of sales in May 2021 because of the localised lockdown imposed by the Government of India during that period," the company said in a statement. Total two-wheelers sales grew from 154,416 units in May 2021 to 287,058 units in May 2022. Three-wheeler of the company grew by 28% to 15,924 units in May 2022 from 12,473 units in May 2021. The company's total exports registered sales of 110,245 units in May 2022 as against 114,674 units in May 2021.
Stocks in Spotlight:
Coal India added 1.89% after the state-run coal major's offtake stood at 61.2 million tonnes (MT) in May 2022, growing 11.3% compared with 55 MT recorded in the same month last year. The company's coal production jumped 30% to 54.7 million tonnes (MT) in May 2022 from 42.1 MT in May 2021. On a sequential basis, the coal production rose 2.24% while offtake increased 6.43% in May 2022 as compared to April 2022. CIL's production increased sharply to 108.2 MTs, till May'22 of the ongoing fiscal year, against 84 MTs for comparable period in FY'21.
Steel Strips Wheels (SSWL) advanced 2.95% after the company's net turnover jumped 96.31% to Rs 325.26 crore in May 2022 from Rs 165.68 crore in May 2021. The company achieved gross turnover of Rs 401.07 crore in May 2022 as against Rs 190.69 crore in May 2021, a growth of 110.32% year on year (YoY). The company's 2 & 3 wheelers segment reported a growth of 1307% YoY in May, followed by Truck segment, which rose 454% YoY. Passenger Car segment grew 293% YoY, Alloy Wheels segment rose 135% YoY and Tractor segment jumped 63% YoY. Meanwhile, total exports fell 56% YoY in May 2022.
Separately, SSWL announced that the promoter group released some of the pledged shares on 31 May 2022. The promoters along with the persons acting in concert hold 1,95,94,804 equity shares, or 62.77% equity, in SSWL. Out of this, 37,29,044 equity shares, or 11.94% of total paid up capital of the company and 19.03% of total promoter shareholding were pledged. On 30 May 2022, 3,50,000 shares were pledged and on 31 May 2022, 4,50,000 shares were released from pledge. Accordingly, the total number of shares pledged has reduced to 36,29,044, or 11.62% of total paid up capital of the company and 18.52% of total promoter shareholding.
NMDC rose 0.40% after the PSU miner's iron ore production marginally rose 14.69% to 3.20 MT in May 2022 as against 2.79 MT in May 2021. Iron ore sales aggregated in the month of May 2022 stood at 2.65 MT, falling 19.7% from 3.30 MT sold in May 2021. On a sequential basis, the company's iron ore production rose 1.59% while iron ore sales declined 15.33% in May 2022 over April 2022.
VST Tillers Tractors declined 1.47% after the company's total sales jumped 36.33% to 3,628 units in May 2022 from 2,661 units sold in May 2021. Sequentially, the company's total sales rose 27.65% in May 2022 from 2,842 units sold in April 2022. The company's power tillers sales grew 47.35% to 3,037 units in May 2022 from 2,061 units in May 2021. Total tractor sales stood at 591 units in May 2022, 1.5% lower than 600 units sold in May 2021.
Global Markets:
The Dow Jones futures were up 125 points, indicating a positive opening in the US stock market today.
Shares in Europe and Asia were mixed on Wednesday as investors continue to assess new data on inflation and economic activity.
Euro zone inflation hit an annual 8.1% in May, marking a seventh consecutive record high.
China's Caixin/Markit manufacturing Purchasing Managers' Index for May came in at 48.1 on Wednesday, an improvement over April's reading of 46 but still remaining below the 50-level mark that separates expansion from contraction.
Meanwhile, Bank of Japan Deputy Gov. Masazumi Wakatabe said Wednesday that both monetary easing and fiscal expansion would be needed to tackle higher commodity prices and Japan's low inflation at the same time.
The deputy governor also said medium- to long-term inflation is still expected to rise only moderately in Japan, where he believes there are "scarring effects of prolonged deflation."
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