Sensex Today Tanks 793 Points; 5 Reasons Why Indian Share Market Is Falling

After opening on a negative note, Indian share markets Slipped further as the session progressed and ended the day weak.

The Nifty-50 and Sensex saw sharp cuts of almost 1 % each after having scaled all-time highs on Wednesday.

At the closing bell, the BSE Sensex stood lower by 793 points (down 1.1%).

Meanwhile, the NSE Nifty closed lower by 238 points (down 1.1%).

Bajaj Auto, TCS, and Nestle were among the top gainers today.

Sun Pharma, Maruti Suzuki, and ONGC on the other hand, were among the top losers today.

A secondary market is a marketplace where securities, such as stocks and bonds, are bought and sold among investors after their initial issuance in the primary market.

The GIFT Nifty ended at 21,618 up by 63 points.

Broader markets ended the day lower. The BSE Mid Cap ended 0.5% lower and the BSE Small Cap index ended 0.6% lower.

Sectoral indices are trading negatively with stocks banking sector, the realty sector, and the oil & gas sector witnessing the most selling pressure.

Shares of ABB India, Cummins India, and SRF hit their respective 52-week highs today.

The rupee is trading at 83.42 against the US$.

Gold prices for the latest contract on MCX are trading 1.6% higher at Rs 72,780 per 10 grams.

Meanwhile, silver prices are trading 2.1% higher at Rs 84,575 per 1 kg.

Here are five reasons why Indian Markets are falling today

#1 Delayed Rate Cut Expectations

The equity markets have been rising throughout the world on expectations that the higher interest rate cycle will be behind and the US Federal Reserve will start cutting interest rates soon. The hotter-than-expected inflation numbers however have dampened hopes that the US Fed may start cutting interest rates soon.

#2 Impact on FPI Flows

Hotter than expected US inflation also meant that the US bond yields and dollar index, both inched higher. A stronger dollar and higher bond yields, both can impact Foreign inflows as investment in emerging markets becomes less attractive if US bond yeilds and the Dollar index are stronger.

#3 Commodity Price Rises

The prices of base metals as well as petroleum products have hardened over the recent paste. On the London Metal Exchange Aluminium prices that were close to US$ 2220 a tonne levels in mid-March have rise to past US$ 2400 a tonne levels.

Copper prices that were at close to US$ 8700 a tonne levels on the LME in March have now risen to around US$ 9200 a tonne levels. Notably Brent Crude price which was at around US$ 81-82 a barrel at the start of March is now close to US$ 90 a barrel level.

#4 Geopolitical Risk

The heightened tension in the Middle East amidst Israel Hamas Conflict and war once again leaves investors watchful and any further escalation in the conflict or being spread to other regions in the Middle East can have repercussions.

#5 Q4 Results

The focus of the market will shift to earnings by India Inc, and many analysts don't have huge expectations from Q4 earnings.
 

Vodafone Idea to launch India's Largest FPO

In news from the telecom sector, Indian telecom operator Vodafone Idea said on Friday it would raise up to Rs 180 bn (US$ 2.16 bn) later this month through a sale of new shares, in what will be the country's biggest follow-on public offering (FPO).

The debt-laden company said in February it would raise up to Rs 200 bn through equity, which included financial support of Rs 20 bn from a top shareholder entity it did not name.

The public offering, which will take place at a floor price of Rs 10 per share, will open for bids from 18 April to 22 April, said Vodafone Idea, the country's third-largest telecom carrier by number of subscribers.

The largest FPO before this was a Rs 150 bn crore rupee sale by Yes Bank in 2020.

Vodafone Idea also plans to raise an additional Rs 250 bn through debt for which it has been in talks with lenders, without specifying details.

The company said it would use the equity and debt funding to roll out its 5G network service within six to seven months of securing the funds and expand its 4G coverage.

Larger rivals Bharti Airtel and Reliance Jio have already launched their 5G services in most parts of the country.

Formed in August 2018 as a merger between the Indian arm of UK's Vodafone and Aditya Birla Group's Idea Cellular, the telecom operator has since posted a loss in every quarter since then as subscribers have increasingly switched to rivals.

Vodafone Idea is an Aditya Birla Group and Vodafone Group partnership. It's among India's leading telecom service providers.

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Pratham EPC's New order Win

Moving on to news from the engineering sector, shares of Pratham EPC Projects Limited zoomed 20% and were locked in the upper circuit after the company bagged a Rs 4.9 bn order, which is more than double its market capitalization of Rs 2.4 bn.

The newly listed company, which made its stock market debut in March, stated that the order pertains to an EPC contract of onshore or offshore crude oil pipelines in the Gulf of Khambhat and other fields of Gujarat. The project is expected to be completed in the next 36 months.

The stock made a bumper debut with a 51% premium over the issue price of Rs 75 and traded at Rs 113.3 on the NSE SME platform on 18 March.

The listing has exceeded the grey market premium of Rs 27, taking the potential listing price to Rs 102. The grey market is an unofficial platform for trading in the IPO shares till the listing.

Established in 2014, Pratham EPC Projects Limited provides services to oil and gas utilities in India. It primarily focuses on gas pipeline projects, handling tasks such as welding, testing, and commissioning.

It also specializes in various aspects of project management, including engineering, procurement, construction, and commissioning.


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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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