Sensex Slumps 900 Points, Nifty Near 17,000; Tata Motors, Hindalco And Power Grid Plunge 5%

Asian share markets are trading deep in the red today after a long weekend that saw global selloffs, with investors expected to stay away from riskier assets for some time.

The Nikkei plunged 2.5% while the Shanghai Composite is down 0.3%. The Hang Seng is trading on a flat note.

Wall Street's main indexes slumped to close lower on Friday, as rattled investors continued repositioning themselves to reflect fears the US Federal Reserve's hawkish rate policy to curb inflation will push the economy into recession.

The Dow Jones tanked 1.6% while the Nasdaq tumbled 1.8%.

Back home, Indian share markets are trading deep in the red.

Benchmark indices opened on a negative note tracking the trend on SGX Nifty live chart and amid unsupportive global cues.

Markets extended losses as global risk sentiment remained subdued amid renewed worries over economic growth.

At present, the BSE Sensex is trading down by 886 points. Meanwhile, the NSE Nifty is trading lower by 282 points.

Infosys and Nestle are among the top gainers today. Power Grid and Tata Steel, on the other hand, are among the top losers today.

The BSE Mid Cap index is down 3.1%. The BSE Small Cap index is trading lower by 3.5%.

All sectoral indices are trading in red with stocks in the metal sector, power sector and realty sector witnessing most of the selling.

Investors were back to hunting defensive sectors like pharma and FMCG. The best pharma stocks in India and the best FMCG stocks should be the ones to look at.

Shares of Sampre Nutrition and EP Biocomposites hit their 52-week highs today.

Crude oil prices are up today after sliding to eight-month lows last week weighed down by a surging US dollar and fears sharp interest rate hikes globally would spark a recession and hit fuel demand.

The rupee is trading at 81.53 against the US$.

Last week, the rupee slumped 30 paise to close at a fresh lifetime low of 81.09 against the US dollar, weighed down by the strong American currency overseas and risk-off sentiment among investors.

In the commodity markets, gold prices are trading down by 0.1% at Rs 49,383 per 10 grams.

Note that gold prices have fallen and have taken quite a knock in recent weeks.

Speaking of stock markets, chartist Brijesh Bhatia does a complete analysis of today's market and what to expect today, in the video below.

In news from the automobile sector, Hero MotoCorp is among the top buzzing stocks today.

The country's largest two-wheeler maker will soon unleash its biggest-yet consumer push by rolling out at least eight new models tailored to suit customer requirements in specific regional markets.

This comes ahead of an anticipated record demand in the upcoming festival season.

The festive season will witness record retail sales of two-wheelers this year as "there is a tremendous pent-up demand in the market, particularly in rural areas", Hero MotoCorp chief growth officer Ranjivjit Singh said.

While sales of two-wheelers have been on a revival mode, growing by 33% year on year (YoY) to 6.7 m units in the first five months of the ongoing fiscal year, annual volumes are yet to reach the peak of 21 m units seen in 2018-19.

Sales of motorcycles, scooters and mopeds stood at only 13.5 m units in the last fiscal as demand in the past two years has been hit due to a sharp rise in acquisition costs post the transition to BSVI emission norms as well as the impact of the pandemic.

Market participants are of the view that the auto sector could turn fortunes amid strong consumer sentiments this festive period.

It remains to be seen how the above developments pan out.

Moving on, the Tata group is planning to halve the number of listed companies in the conglomerate to an estimated 15 from 29 in the coming months to focus on investing in fewer but bigger entities.

The Tata group is rapidly simplifying its strategy to focus on growth and scale and improve cashflows in the larger companies, said the group's executives.

This is part of Tata Sons chairman N Chandrasekaran's stated plan of transforming the country's oldest conglomerate to make it future ready.

Last week, the group initiated the process of consolidating its steel business by absorbing seven subsidiaries into Tata Steel.

In March this year, Tata Consumer had announced the merger of all businesses of Tata Coffee with itself.

Tata Consumer, the group's fast-moving consumer goods (FMCG) arm, is planning to reduce the number of legal entities it holds to around two dozen from the existing 45 after restructuring.

Tata Consumer has become the most globalised company in the group with 70% of its revenues coming from international operations.

More people around the world drink Tata Tea than using Tata vehicles, Tata steel, or even TCS software!

Here's a look at how the company has performed on the stock market over the years.

(Click on image to enlarge)

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Disclosure: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research ...

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