Sensex Today Falls 152 Points; Why Indian Market Is Down Today; Banking Stocks Outperform

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After opening the day on a positive note, Indian share markets witnessed selling pressure during closing hours and ended marginally lower.

Benchmark indices came under pressure during closing hours amid a subdued global mood.

At the closing bell, the BSE Sensex stood lower by 152 points (down 0.3%).

Meanwhile, the NSE Nifty closed down by 46 points (down 0.3%).

ITC, Kotak Bank, and IndusInd Bank were among the top gainers today.

Power Grid, Tech Mahindra, and Sun Pharma, on the other hand, were among the top losers today.

The SGX Nifty was trading at 18,194, down by 153 points, at the time of writing.

Broader markets ended on a negative note with the BSE Mid Cap index falling 0.5% while the BSE Small Cap index ended 0.3% lower.

Sectoral indices ended on a mixed note with stocks in the realty sector, metal sector, and healthcare sector witnessing selling pressure.

While stocks in the banking sector and FMCG sector witnessed buying.

Shares of Lakshmi Machine, VST Industries, and Britannia hit their 52-week high today.

Outside the home ground, Asian share markets ended on a weak note.

At the close in Tokyo, the Nikkei ended on a negative note, down by 0.6% while the Hang Seng dived by 1.2%. The Shanghai Composite ended lower by 0.5%.

US stock futures are trading on a negative note today with Dow futures trading down by 0.4%.

The rupee is trading at 81.51 against the US$.

Gold prices are currently trading down by 0.4% at Rs 51,440 per 10 grams.

Meanwhile, silver prices for the latest contract on MCX are trading lower by 0.6% at Rs 61,574 per kg.

Steel in Export Incentive Scheme?

In news from the steel sector, India's trade ministry has sought to extend an export promotion scheme to reimburse some local levies for domestic steel producers.

This comes as the steel industry reels from a steep fall in shipments.

Finished steel exports from the world's second-biggest crude steel producer more than halved during the first seven months of the fiscal year that began in April.

Last year, a production-linked incentive (PLI) scheme for specialized products such as coated steel, high-strength, and electrical steel was launched to boost domestic manufacturing.

Indian steel companies took a profit hit on profitability during the July-September quarter, as prices fell due to slowing global demand, while an export tax on some steel products further affected shipments.

Archean Chemical IPO

In the latest developments from the IPO space, the initial public offering (IPO) of Archean Chemical Industries kicked off today.

The company is selling shares in the range of Rs 387-407 to raise Rs 14.6 bn via the primary stake sale.

Archean Chemical Industries was India's largest exporter of bromine and industrial salt in the financial year 2020-21. The company is a leading specialty marine chemical manufacturer in India.

The company has already raised Rs 6.6 bn from anchor investors by allocating them 1,61,67,991 equity shares at Rs 407 apiece.

With the China plus one strategy in force, there are tailwinds for the chemical sector. It might help Archean Chemical Industries pick up the much-needed pace.

Indigo Paints Slumps

Moving on to news from the paint sector, shares of Indigo Paints hit a record low today, plunging 10% after nearly 4% of the total equity changed hands via a block deal.

Yesterday, it was announced that venture capital firm Sequoia Capital will sell a 3.3% equity stake in Indigo Paints through a block deal on 9 November.

The floor price for the deal is Rs 1,315 per share. A lockup period of 90 days will come into effect following the deal.

As of September 2022, Sequoia Capital held a total of 13.73% stake in IndiGo Paints, which has now come down.

Note that Indigo Paints' share price is falling throughout 2022, so today's block deal is not the only reason.

In 2022 so far, shares of the company are down 33%.

The company's management recently said it expects a much sharper increase in profitability parameters in future quarters with comfortable margins. This is due to stabilizing raw material prices and aggressive growth focus.

The company said it would continue to increase dealer count and tinting machine population in larger towns. The upcoming plant in Tamil Nadu was in the final stage of completion and could be commissioned in Q4FY23.

Note that at a time when biggies like Asian Paints and Kansai are reporting below estimate results, Indigo Paints has stood out.

It remains to be seen how the stock performs in the near term.

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

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