Saturday, May 18, 2024

Sensex- Nifty decline, what effect on the market?


In the last week, the Nifty and Sensex indices fell by a total of 420.65 points and 1213.68 points, respectively, both indices closed at 22055.2 points and 72664.47 points respectively. The Nifty was down 1.87 percent, while the Sensex was down 1.64 percent. Although both the indices showed declines for the entire week, the Nifty gained 0.44 per cent and the Sensex 0.36 per cent in the closing session on Friday. Among the top gainers during the week were Hero MotoCorp (7.1 percent), Britannia Industries (6.8 percent), HUL (6.6 percent), Kotak Mahindra Bank (5.3 percent), Tata Motors (3.3 percent) and Shreeram Finance among the top losers. (-9.4 percent), Titan (-6.9 percent), Dr. Reddy's Labs (-6.8 percent), Adani Enterprises (-6.6 percent), Larsen & Trubo (-6.5 percent) were among the top gainers. Most of the big state-owned banks such as SBI, PNB, Bank of Baroda have announced their Q4 results this week. This also affected the index.

The Index of Industrial Production (IIP), which measures the country's industrial output, fell to 4.9 percent in March. The IIP index was 5.6 percent in February. The top three components of the index were the power generation sector (8.7 percent), the manufacturing sector (5.2 percent), and the mining industry sector (1.2 percent).

State Bank of India, the country's largest state-owned bank, reported a 24 percent jump in net profit to Rs 20,698 crore in the fourth quarter of last financial year. The bank's net interest income (NII) increased by 3 percent to Rs 41,655 crore. Also, other income increased by 24 percent to 17,369 crores. Net interest margin (NIM) declined by 0.3 per cent to 3.30 per cent. The gross non-performing loan ratio (Gross NPA) decreased to 2.24 percent from 2.78 percent, while the net non-performing loan ratio (Net NPA) decreased to 0.57 percent from 0.67 percent. Provisions for non-performing loans as well as provisions for other purposes also declined, which came down from Rs 3,315 crore to Rs 1,609 crore.

The 18 percent GST levied on health insurance in the country is likely to be brought down to 12 percent. 12 percent GST is likely to be levied on health insurance with a premium of up to 30,000. It is understood that a decision regarding this is likely to be taken in the GST Committee meeting to be held after the Lok Sabha elections. MP Jayant Sinha, head of Parliament's Finance Committee, expressed the need to reduce GST on health and term insurance.

Bank of Baroda, the country's second largest state-owned bank, reported a 2.3 per cent year-on-year rise in net profit to Rs 4,886 crore from Rs 4,775 crore in the March quarter. Net interest income increased by 2 percent to Rs 11,793 crore, while net interest margin rose to 3.27 percent from 3.5 percent. Gross Non-Performing Loans (Gross NPA) declined to 2.92 percent from 3.79 percent.

In the month of April, investments made through SIP set a new record. 20372 crores were invested in the capital market through SIP in a single month. Equity inflows in mutual funds, however, declined by 16.4 percent to Rs 18,917 crore. Total assets under management of mutual funds increased by 7.2 percent to Rs 57.25 lakh crore. In the month of April, 63.6 lakh new SIPs were launched, and the capital market value invested through SIPs reached 11.26 lakh crores.

The country's oil producer and refiner BPCL's net profit fell 30.3 percent to Rs 4,789 crore from Rs 6,870 crore. The total income of the company decreased by 1 percent from 1 lakh 34 thousand crores to 1 lakh 33 thousand crores. The company's operating margin fell to 4.74 percent from 7.02 percent. HPCL, another state-owned company operating in the same sector, saw a 25 per cent decline in net profit from Rs 3,608 crore to Rs 2,709 crore. The revenue of the company increased by 6 percent from 1 lakh 35 thousand crores to 1 lakh 20 thousand crores. The company's operating margin fell to 2.79 percent from 4.08 percent.

State-run bank PNB's net profit for the fourth quarter of last financial year has almost tripled from Rs 1159 crore to Rs 3010 crore compared to the previous year. The bank's net interest income increased by 9.1 per cent from Rs 9,499 crore to Rs 10,363 crore. Provisions for non-performing loans (NPLs) declined from Rs 3,625 crore to Rs 1,958 crore. Similarly, gross non-performing loans (Gross NPA) declined from 8.74 percent to 5.73 percent. Also, the ratio of net non-performing loans to net NPAs came down to 0.73 percent from 0.96 percent.

The Bank of England, the central bank of England, decided to keep the interest rate in the country stable at 5.25 percent. The interest rate fixing committee has decided to keep interest rates unchanged for the sixth time in a row. 7 out of 9 members of the committee took this decision by majority vote. The next meeting in this regard will be held on June 20. Interest rates in England have reached a 16-year high. Economists have expressed the possibility of interest rate cut in the next meeting.

Asian Paints, the country's largest paint manufacturer, reported a 1.8 percent rise in net profit to Rs 1,256 crore for the March quarter. The revenue was 8731 crores.

Indian auto maker Tata Motors posted a net profit of Rs 17,529 crore for the quarter ended March 31. The profit increased almost three times i.e. by 219 percent. The revenue of the company also increased by 14 percent to 1 lakh 19 thousand crores. Mainly in this Tata Motors subsidiary Jaguar Land Rover performed spectacularly. The subsidiary made a profit of 1.4 billion pounds in the quarter.

Goddigit General Insurance Company's IPO will open from May 15 to May 17. The price band of this IPO has been fixed between Rs 258 and Rs 272. The total fund raising target of the company is 2615 crores. Prem Vatsa of Canada-based Fairfax Group is the promoter of the company. Virat Kohli and Anushka Sharma are also major investors in the GodiGit company.

HDFC Bank announces Parivartan initiative for rural start-ups. A fund of 19.6 crores has been earmarked for this, and partnerships have been made with government initiatives and organizations like Atal Innovation Mission, Niti Aayog. The initiative provides funding to startups working in the field of social upliftment and progress. Started in 2017, this initiative has helped more than 400 startups till date.

India's foreign exchange reserves rose by $3.7 billion to $641.59 billion in the week ended May 3. For the first time in the last four weeks, an increase in water reserves was recorded.

Pritam Mandke (Mandke Fincorp)

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