Market Close: Sensex, Nifty Ended Lower Fourth Straight Day

India’s benchmark indices extended losses from the previous week and ended lower for the fourth straight day on Monday, largely led by losses in index heavyweight Reliance Industries which fell over 4%. Banks, metals and oil and gas stocks fell the most.

Declines in stocks in Asia and Europe, due to concerns about global growth following lockdowns in China and aggressive policy tightening from central banks, also kept Indian markets under pressure.

Rising oil prices and a strengthening US dollar have weighed heavy on the rupee with a surprise rate hike by the Reserve Bank of India (RBI) last week doing little to stem capital outflows.

The rupee fell past its previous record low of 76.98 against the US dollar in March to 77.56 on Monday. It slumped 57 paise to close at all-time low of 77.47.

The benchmark Sensex was down 364.91 points at 54470.67, and the Nifty fell 109.40 points to 16301.90. About 1,036 shares advanced, 2,353 declined, and 140 were unchanged.

Midcap and smallcap indices fell 2% each.

India’s liquefied natural gas importers are purchasing extra volumes from Russia at a discount as most other spot buyers shun the fuel.

Companies including Gujarat State Petroleum Corp. and GAIL India Ltd. recently bought several LNG spot shipments from Russia at prices below prevailing market rates, according to traders with knowledge of the matter. They may purchase more as long as the Russian fuel remains cheaper than rival suppliers.

Domestic steel prices are showing signs of fatigue after a relentless rally over the past two years following supply disruptions, decarbonization measures globally, especially in China and geopolitical risks stemming from the Russia- Ukraine war, which has driven up raw material costs, ratings agency Crisil said on Monday.

Federal Bank has been taking a cautious approach in building the loan mix toward high-rated corporates and retail loans. The bank’s liability franchise remains strong with CASA plus Retail TD of ~92% and the bank looking to improve its CASA deposits gradually over the medium term. FB has managed asset quality well despite the pandemic and the restructured pool behaving well with collections remaining healthy is reassuring. Key positives are a) Improving business mix, b) Adequate CRAR, c) Strong Liability franchise and d) Incremental lending to better-rated borrowers. Focus on high-margin businesses such as the MFI, CV portfolio, and Credit Cards will gradually aid in margin improvement.

We maintain a BUY recommendation with a Target Price of ₹115 (1.1x FY24E ABV), implying an upside of 27% from CMP.

The dollar climbed to its highest levels in two decades on Monday as a combination of rising U.S. Treasury yields and a tightening lockdown in China boosted the safe haven appeal of the greenback.

Against a basket of major currencies, the dollar topped 104.19 for the first time since July 2002, extending its almost 9% rise this year.

The country’s retail sector saw a pickup in hiring, reporting double-digit growth in April for the first since the outbreak of the pandemic, according to the monthly Monster Employment Index (MEI) released Monday.

Europe’s stock markets wavered in opening deals on Monday, as investors paused from recent heavy losses but remained anxious over surging inflation and rising interest rates.

London’s benchmark FTSE 100 index was almost unchanged at 7,388.93 points, compared with Friday’s closing level.

In the eurozone, Frankfurt’s DAX rose 0.1% to 13,692.51 points, while the Paris CAC 40 fell 0.1% to 6,251.47.