We had mentioned in Monday’s closing report that Nifty, Sensex might head higher. The major indices of the Indian stock markets suffered a correction on Tuesday. On the NSE, there were 609 advances, 1,145 declines and 343 unchanged. All sectoral indices, except consumer durables, which was up 0.7%, , ended in red with auto, banking and metal being the top losers. We expect the market to move in a narrow range until the elections results are declared on May 23rd. Since the market has already gone up on the hopes of a large majority of the BJP-led coalition, the market will have to find a fresh trigger to head higher.
The trends of the major indices in the course of Tuesday’s trading are given in the table below:
Information technology company Tech Mahindra reported a dip in net profit for the quarter ended March 31, hurt by a decline in its margins. Its net profit fell 6% quarter on quarter to Rs1,132 crore. Revenues also declined quarter on quarter, falling to Rs8,892 crore as compared to Rs8,943 crore in the December quarter. For the fourth quarter, operating margin dipped to 15.4%, lower than 16.1% of the third quarter. It board recommended dividend of Rs14 per share. In US dollar terms, revenue rose 1.9% year on year to $1,267.5 million. Tech Mahindra shares closed at Rs770.35, down 1.15% on the NSE.
Tata Motors’ reported a a consolidated operating profit of Rs8017 crore (down 26% YoY). This belied our market estimates of 11% fall due to weakness across businesses. According to Edelwiess “demand pressure across key markets led to management extending free cash flow (FCF) generation target by a year to FY21.” The brokerage said that the “China demand recovery remains critical for margin and cash flow,” apart from the sharp dip in March quarter operating profit margin.
Tata Motors reported a 49% fall in consolidated profits. The stock was down by about 7%.
Jet Airways ended 14% higher on reports that Hinduja Group was finally set to bid for the grounded airline.
US stocks extended losses as the market was dragged down by a steep sell-off in tech-related shares. The Dow Jones Industrial Average on Monday dropped 84.10 points, or 0.33%, to 25,679.90. The S&P 500 dipped 19.30 points, or 0.67%, to 2,840.23, Xinhua news agency reported. The Nasdaq Composite Index was down 113.91 points, or 1.46%, to 7,702.38. Chipmaker stocks fell broadly. Both Nvidia and Advanced Micro Devices closed about 3% lower. Qualcomm and Lam Research slid 5.99% and 5.4%, respectively.
Other US tech giant stocks or the so-called FAANG group of Facebook, Apple, Amazon, Netflix and Google-parent Alphabet, closed lower. Eight of the 11 primary S&P 500 slipped, with technology down 1.75%, leading the laggards. The US financial market has been pressured these days as investors grew concerned about global trade tensions. The Cboe Volatility index, widely considered the best fear gauge in the stock market, increased 2.19% to 16.31 on Monday.
The top gainers and top losers of the major indices are given in the table below:
The closing values of the major Asian indices are given in the table below: