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S&P 500 ends near two-year low as bear market deepens; 10-yr treasury yield touches highest in over 12 yrs

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Wall Street sank deeper into a bear market on Tuesday, with the S&P 500 recording its lowest close in almost two-years as Federal Reserve policymakers showed an appetite for more interest rate hikes, even at the risk of throwing the economy into a downturn. The benchmark S&P 500 is down about 24% from its record high close on Jan. 3. Last week, the Fed signaled that high rates could last through 2023, and the index erased the last of its gains from a summer rally and recorded its lowest close since November 2020. The S&P 500 has declined for six straight sessions, its longest losing streak since February 2020.

Also Read: Will bears drag Nifty to 16800 amid high volatility, uncertainty? 5 things to know before market opening bell

Seven of 11 S&P 500 sector indexes fell, with utilities and consumer staples each down about 1.7% and leading declines. The energy sector index rallied 1.2% after Sweden launched a probe into possible sabotage after major leaks in two Russian pipelines that spewed gas into the Baltic Sea. Tesla gained 2.5% and Nvidia added 1.5%, with both companies helping keep Nasdaq in positive territory. Traders exchanged over $17 billion worth of Tesla shares, more than any other stock. The benchmark U.S. 10-year Treasury yield touched its highest level in more than 12 years amid the hawkish comments from Fed officials.

The Dow Jones Industrial Average fell 0.43% to end at 29,134.99 points, while the S&P 500 lost 0.21% to 3,647.29. The Nasdaq Composite climbed 0.25% to 10,829.50. Concerns about corporate profits taking a hit from soaring prices and a weaker economy have also roiled Wall Street in the past two weeks. Analysts have cut their S&P 500 earnings expectations for the third and fourth quarters, as well as for the full year. For the third quarter, analysts now see S&P 500 earnings per share rising 4.6% year-over-year, compared with 11.1% growth expected at the start of July.

Also Read: Reliance, HCL Tech, Dish TV, Torrent Pharma, Birla Corporation, IDBI Bank, Adani Group stocks in focus

Volume on U.S. exchanges was 11.7 billion shares, compared with an 11.3 billion average for the full session over the last 20 trading days. Declining issues outnumbered advancing ones on the NYSE by a 1.25-to-1 ratio; on Nasdaq, a 1.03-to-1 ratio favored advancers. The S&P 500 posted no new 52-week highs and 146 new lows; the Nasdaq Composite recorded 28 new highs and 502 new lows.

Gold Price Today, 6 Oct 2022: Gold gets costlier, near Rs 52000; analysts say ‘buy on dips’, check silver rate

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Gold Price Today, Gold Price Outlook, Gold Price Forecast: Gold rate and silver rate were trading higher in India on Thursday, on the back of positive global cues. On the Multi Commodity Exchange, gold December futures were ruling Rs 269 or 0.5 per cent up at Rs 51915 per 10 gram, as against the previous close of Rs 51646. Silver December futures were trading at Rs 61490 per kg, up Rs 723 or 1.2 per cent on MCX. Globally, yellow metal prices edged higher as Treasury yields retreated, although gains were limited after stronger U.S. economic data bolstered expectations the Federal Reserve will retain its hawkish narrative, according to Reuters. Spot gold was up 0.2% at $1,719.19 per ounce. U.S. gold futures rose 0.5% to $1,728.50.

Also read: Petrol and Diesel Price Today, 6 Oct 2022: Fuel cost steady; Check rates in Delhi, Mumbai, Noida, other cities

Gold prices rallied this week after US dollar and Treasury yields retraced last Friday on account of weaker than expected PMI numbers. Yesterday’s stronger than expected private payroll data did dampen some shine off precious metals but the trend still remains bullish. Arguably the most important U.S. data point of the week, if not the month, is Friday’s employment situation report for September from the Labor Department. OPEC’s decision to cut oil output to 2 million bpd also will give a boost to gold prices as higher oil will drive inflation higher. Corrective pullback is seen in COMEX gold but in MCX due to weak rupee, trend still is positive and we advocate buy on dips strategy today with stoploss of 51400 and expected target of 52000.

Rahul Kalantri, VP — Commodities, Mehta Equities

Gold and silver prices settled lower on Wednesday, after posting solid gains in the previous two sessions. A strong rebound in the U.S. dollar index, along with a significant rise in U.S. Treasury yields, are the bearish  market elements working against the bullion. Gold prices eased following the release of a slightly stronger-than-expected U.S. ADP jobs report that stood at  208,000 in September, as against the expectations of 200,000. The markets will also be closely watching Friday’s employment situation report for September from the Labor Department. However, strength in global oil prices and geo-political tensions between Russia & Ukraine are supporting safe-haven buying in precious metals. Gold has support at $1712-1698, while resistance is at $1740-1751. Silver has support at $20.48-20.20, while resistance is at $20.95-21.10. In INR terms gold has support at Rs 51,420-51,240, while resistance is at Rs 51,880, 52,050. Silver has support at Rs 60,150-59,440, while resistance is at Rs 61,480–62,110.

Also read: Bank Nifty support at 38000, Nifty to trade flat on today’s expiry; use short straddle for 13 Oct F&O expiry

Sriram Iyer – Senior Research Analyst at Reliance Securities

Gold and silver fell after the U.S. Dollar and the benchmark Treasury yields staged a comeback rally on Wednesday. Prices had rallied in the previous session amid hopes that the US Federal Reserve could adopt a less aggressive approach to rate hikes. Looking ahead, gold and silver have started stronger this Thursday’s trade despite a stronger dollar. U.S. non-farm payrolls data due on Friday could offer more clarity on the Fed’s policy tightening. So, MCX gold December range for the day is 51440 to 51770.

(The views in this story are expressed by the respective experts of the research and brokerage firm. Financial Express Online does not bear any responsibility for their advice. Please consult your investment advisor before investing.)

Kanpur-based Lohia Corp files IPO papers with Sebi 

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Lohia Corp, manufacturer of machinery used in the production of technical textiles, has filed draft papers with capital markets regulator Sebi to garner funds through an Initial Public Offering (IPO). The IPO is entirely an Offer-For-Sale (OFS) of 31,695,000 equity shares by promoters and other shareholders, according to the Draft Red Herring Prospectus (DRHP) filed on Thursday.

The company expects that the proposed listing of its equity shares will enhance its visibility and brand image, provide liquidity to shareholders as well as provide a public market for the equity shares in the country. Kanpur-based Lohia Corp is the manufacturer of machinery and equipment used in the production of technical textiles, in particular for manufacturing polypropylene and high-density polyethylene woven fabric and sacks.

As of March 31, 2022, the company had a customer base comprising over 2,000 customers in over 90 countries globally. The company’s revenue from operations increased to Rs 2,237.48 crore for the financial year 2022 from Rs 1,333.79 crore for the financial year 2021, while profit after tax rose to Rs 160.85 crore from Rs 119.30 crore during the same period.

ICICI Securities, IIFL Securities, HSBC Securities and Capital Markets (India) Private Limited, and Motilal Oswal Investment Advisory are the book-running lead managers to the issue. The equity shares of the company will be listed on the BSE and NSE.

Plan for extra excise duty on unblended petrol, diesel deferred

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The finance ministry has postponed by a month the imposition of a proposed extra excise duty of Rs 2 per litre on petrol that is not blended with ethanol. Such an impost on diesel that is not mixed with bio-diesel has also been deferred by six months. The additional levy, proposed in the Budget for FY23, was to be applicable from October 1.

The latest move comes at a time when inflation remains uncomfortably high in the wake of the Ukraine war. Retail inflation inched up to 7% in August from 6.71% in the previous month. The decision will also give more time to oil firms to better prepare for its adoption and remove any supply bottlenecks of either ethanol or bio-diesel, which, in any case, is going to be a tall order, according to analysts.

Also Read: ATF price cut 4.5 pc, commercial LPG rates down Rs 25.5 

The Budget decision to promote blending was meant to cut India’s oil imports proportionately and somewhat reduce pollution. The country imports about 85% of its annual oil requirements. The greater use of ethanol will also boost earnings of farmers who grow crops like sugarcane.

Currently about 10% ethanol is blended with 90% petrol. However, there is only an experimental mixing of bio-diesel–extracted from non-edible oilseeds—with diesel.

According to the latest notification, “petrol which is intended for retail sale, not so blended with ethanol or methanol” will attract Rs 3.40 per litre basic excise duty effective November 1, 2022, instead of the current Rs 1.40. Similarly, branded petrol that is not blending with ethanol will attract an excise duty of Rs 4.60 a litre, against the current Rs 2.60.

As for diesel that is “intended for retail sale, not so blended with alkyl esters of long chain fatty acids obtained from vegetal oils, commonly known as bio-diesels” will attract a basic excise duty of Rs 3.80 per litre, against Rs 1.80. Branded diesel will attract Rs 6.20 a litre basic excise levy, instead of the current Rs 4.20.

In addition to the basic excise duty, cess and special additional excise duty are also imposed on petrol and diesel. The total incidence of excise on petrol stands at Rs 19.90 a litre and that on diesel at Rs 15.80.

Analysts have said the blending move will be difficult to implement in states where ethanol isn’t produced in large volumes. Moreover, building infrastructure in states to manufacture bio-diesel in adequate quantity, they have said.

The government last year advanced the target by five years to achieve 20% ethanol blending with petrol to 2025. The blending of 10% was realised earlier this year.

Sensex, Nifty snap 7-day losing streak after RBI hikes repo rate; Nifty eyes 17700 with support at 16850

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BSE Sensex and NSE Nifty 50 ended nearly 2 per cent higher, snapping a 7-day losing streak on Friday. Investors cheered the RBI MPC announcement of the repo rate hike. BSE Sensex ended at 57,427, up 1,017 points or 1.8 per cent. The NSE Nifty 50 ended at 17,094, up 276 points or 1.64 per cent. Stocks of index heavyweights such as Reliance Industries Ltd (RIL), HDFC Bank, ICICI Bank, Housing Development Finance Corporation (HDFC), and Bharti Airtel were among the top index contributors. Broader markets performed in line with equity frontliners. S&P BSE MidCap index gained 1.4 per cent or 341 points to settle at 24,853.94, while the S&P BSE SmallCap index added 1.45 per cent or 406 points to finish at 28,453.

Deepak Jasani, Head of Retail Research, HDFC Securities

Also read: Airox Technologies files Rs 750-cr IPO papers with Sebi

Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services

With most key events now behind, the market finally found some strength on Friday. After 7 consecutive falls, the Nifty witnessed a strong rally and closed with gains of almost 300 points. It also reclaimed the 17,000 zones, making the short-term technical view positive. Nifty can now move towards 17,500-17,700 zones with key support around 17,000 and 16850. Auto and consumption sectors would be in focus ahead of monthly sales data and high demand in the ongoing Navaratri festival. The Pharma sector is seeing some value buying as the market focused on defensive names in times of global uncertainty.

Amol Athawale, Deputy Vice President – Technical Research, Kotak Securities

What lifted the market sentiment was the RBI’s policy rate hike of 50 bps that came in as expected and its comment that India’s economy remains on strong footing despite global headwinds. The relief rally was backed by investors’ preference for growth-driving stocks from banking, automobile, realty & metal space. However, global macro factors will continue to dictate the domestic market sentiment going ahead as any fresh spell of negative news could once again trigger the downward spiral. Technically, after a sharp selloff, the Nifty took support near 16800 and bounced back sharply. On daily charts, the index has formed a long bullish candle, and also formed a promising Hammer candlestick formation on weekly charts which is broadly positive. For the trend following traders, the 200- day SMA (Simple Moving Average) and 16900 would act as a sacrosanct support zone. Above the same, the reversal wave is likely to continue till 17250. Further upside may also continue which could lift the index till 17400. On the flip side, below 16900, the uptrend would be vulnerable and on the further decline, the index could slip till 16800-16700.

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Vinod Nair, Head of Research, Geojit Financial Services

An in-line rate hike along with the RBI’s confidence in the economy’s growth momentum aided the domestic market to alter the seven-day losing streak. The decision to retain inflation at 6.70% with a marginal cut but a healthy GDP forecast of 7.0% indicates the resilience of the Indian economy. Although the commentary warned about prevailing risks to the domestic economy from the global economy, the MPC refrained from sounding very hawkish. Continuation of the policy stance as ‘withdrawal of accommodation’ indicates more rate hikes in the future, but is data-driven.

Gold prices to remain under pressure till US Fed; trend looks bearish, support seen at Rs 48800

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By Bhavik Patel

Gold hits 2020 pandemic lows as Fed rate hike expectations propels US Treasuries and Dollar higher. Gold and silver bulls remain frustrated that the risk aversion in the marketplace is not translating into more safe-haven demand for the two metals. Yesterday gold fell nearly $40 from daily highs to hit more than two-year lows. Previously for the past 2 years, buyers would emerge around the area of $1690-1685 but this week with higher US CPI and Fed’s commitment of taming inflation at the cost of the economy has scared bulls and gold made low of $1661. As we had stated earlier that $1690-84 was the region where buyers usually emerged and this time selling pressure was accelerated below $1684 as stoploss got triggered. Traders who had their long positions, held their longs with stop loss of $1684 and when that prices breached, it gave bears added ammunition.

US retail sales also came better than expected which again investors believe can give Fed safety to rate hikes aggressively. According to the CME FedWatch Tool, there is a 78% chance of a 75bps hike and a 22% chance of a 100bps increase at next week’s September meeting. On top of September expectations, it looks like the Fed will continue raising rates for the rest of the year, and that is weighing on gold. In this type of environment,  investors are more prone to liquidate their gold positions than their equities. For gold to see a substantial recovery, the market needs to see a slowdown in rate hikes. And that could happen within the next few months as economic data starts to deteriorate, allowing the Fed to take its foot off the monetary policy tightening pedal. 

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Gold in MCX has breached its swing low of 49700 and 49572. Trend is bearish as in COMEX it has breached its support of $1680. Next support comes at $1650 and $1622 while MCX support comes at 48800. Gold is looking vulnerable and more prone to fresh shorts. The only saving grace is that in MCX, momentum oscillator RSI_14 is at 29.75 i.e. in the oversold zone and in the past 3 years, gold has bounced from the oversold region. The most bearish condition happened around Mar 2021 when RSI_14 was at 26 but then price recovered. So investors who have a medium-term can wait for gold to come around the region of 48800-48500 where they can accumulate for medium term to long term basis. In the short term, till the FOMC, expect gold prices to remain under pressure.

(Bhavik Patel is a commodity and currency analyst at Tradebulls Securities. Views expressed are the author’s own. Please consult your financial advisor before investing.)

Rupee likely to depreciate on strong dollar, elevated crude prices; USDINR pair to trade in this range

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The Indian Rupee is likely to depreciate to 80 in coming sessions amid strength in dollar, volatility in equity markets, US Fed rate hike and inflation concerns. Rupee has fallen 6.51% against the US dollar so far in 2022. In comparison, Australian dollar has declined 7.5%, Pakistani rupee fell 23.77%, and Japanese Yen slipped 19.79% against the greenback YTD. On Tuesday, Chief Economic Advisor V Anantha Nageswaran had said that India is not defending rupee, and that the Reserve Bank of India is taking necessary steps to ensure that the movement of the rupee is gradual and in line with market trends. Rupee is being managed in a manner that reflects the fundamentals of the economy, he added.

Dilip Parmar, Research Analyst, HDFC Securities

Also Read: Share Market LIVE: Nifty, Sensex stare at positive start; Tamilnad Mercantile shares to debut on bourses today

“The pair is trading within the range of 79.90 to 79.10 with rising volatility indicating consolidation before a directional trend. The confidence in positioning coming back from foreign institutions as the accelerated buying in the domestic equities after the worst sell-off in the last couple of months. The 5-day moving average of net foreign inflows increased to $289.4 million, rising above the 20-day average of $269.2 million, according to data from the Central Depository Services (India) Ltd.”

Anuj Choudhary – Research Analyst, Sharekhan by BNP Paribas

“Indian rupee depreciated by 0.38% yesterday on strong US Dollar and deteriorating global risk sentiments. US Dollar surged as US CPI rose unexpectedly to 8.3% y-o-y in August compared to expectations of 8.1% while core CPI increased to 6.3% y-o-y in August compared to expectations of 6.1%. This raised expectations of yet another aggressive rate hike by FOMC in its September meeting. Apart from increased odds of a 75 bps rate hike, there are talks of even a 100 bps rate hike.”

“We expect Rupee to trade with a negative bias amid risk aversion in global market worries that the US Federal Reserve may be more hawkish than previously expected. Investors may also take cues from PPI data from US today. However, India’s WPI inflation eased to a 11-month low of 12.41% in August which may support Rupee at lower levels. USDINR spot price is expected to trade in a range of Rs 78.80 to Rs 80 in next couple of sessions.”

Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities

“USDINR spot closed 79.44, up 30 paise, due to strong rally in US Dollar Index and sell-off in equities. However, RBI intervention and FPI flows may have capped the advance beyond 79.60. The sharp drop in the forward premium could be a sign of RBI selling in forwards. Post US CPI, odds of a 100-bps hike next week has increased. These odds can keep USDINR supported till Fed meeting. We expect a range of 79.20 and 79.80 on spot.”

Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors

“USDINR to open flat at 79.50 as the dollar index is at 109.72 US 10-year yields at 3.42 oil is $ 94 per barrel. Asian currencies are still on the weaker side against $ which will not allow the rupee to gain much against the dollar. The range for the day is expected between 79.30 to 79.80 as the market braces in for a 75 bps rate hike by FED on 21st. India’s trade deficit was higher though export figures were also revised to slightly higher. Trade deficit still remains a matter of concern for the country. Exporters to sell above 79.80 while importers to buy below 79.30.”

Also Read: Bulls may attempt a comeback to push Nifty above 18100; 5 key things to know before market opening bell

(The recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)

Simpl announces Diwali sale featuring products from D2C merchants nationwide

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Simpl, checkout services provider, announces its ‘Crazy Desi Diwali sale’ from October 28th to November 2nd, 2023, to make available lakhs of products from D2C brands for millions of customers across the country.

This festive extravaganza aims to provide lakhs of products and services, ranging from fashion to footwear and electronics to home decor, from over 80 homegrown D2C merchants to millions of consumers across 100% of the serviceable pin codes across the country in an affordable manner. Customers looking to avail these benefits can visit Simpl’s mobile app to get access to the products and services on sale, where they will be redirected to the merchant’s platform with the discount already applied, enabling customers to save up to Rs 6,000 on their products and brands.

“The behaviour of Indian consumers has undergone a sea change over the last few years with a growing demand for niche products which fulfil their diverse requirements. This trend is panning out across categories – from fashion to footwear and electronics to Home decor where D2C merchants have become the preferred choice for customers. With the onset of the festive season, it becomes even more important to empower these merchants to cater to their customers’ evolving needs. As an organisation, Simpl is at the forefront of supporting merchants across the country through its technological platform and properties such as the Crazy Desi Diwali Sale, which enables them to showcase their wide selection of products to millions of consumers across the country, ”Khanaz K.A, CXO, Simpl, said.

Simpl, which has over 26,000 merchants and millions of customers across the country, has been actively working towards empowering the D2C landscape in India through its AI-led offerings such as the Checkout Network, Checkout Suite and D2C Simplified community. The community counts thousands of D2C merchants across the country including smaller cities such as Surat, Indore as its members.

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Deltatech Gaming, Pristine Logistics get Sebi’s go-ahead to float IPO

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Deltatech Gaming Ltd and Pristine Logistics & Infraprojects Ltd have received Sebi’s go-ahead to raise funds through an initial public offering (IPO).

The two companies, which filed their preliminary IPO papers with Sebi during May and June, obtained its observation letter on September 30, an update with the markets watchdog showed on Monday.

In Sebi’s parlance, its observation implies its nod to launch an IPO.

Going by the draft papers, Deltatech Gaming’s Rs 550-crore IPO comprises fresh issue of equity shares worth up to Rs 300 crore and an offer-for-sale (OFS) of Rs 250 crore by promoter Delta Corp Ltd.

Proceeds worth Rs 150 crore from the fresh issuance will be utilised for organic growth through marketing and business promotion activities, to attract new gamers and retain the existing ones, Rs 50 crore will be used for strengthening the technology infrastructure to develop new capabilities, maintain and manage its existing platform and general corporate purposes.

The Gurugram-based company is one of the earliest companies in the real money gaming segment in India. Over the years, the digital gaming company has developed its own platforms, which it continues to evolve.

Pristine Logistics & Infraprojects’ initial share-sale comprises fresh issuance of equity shares worth Rs 250 crore and an OFS of 20,066,269 equity shares by promoters and existing shareholders, according to the Draft Red Herring Prospectus (DRHP).

Proceeds from the fresh issuance will be used to repay debt and for general corporate purposes.

Also Read| Rupee likely to consolidate in near-term, may fall to 83 level, if 82 breached amid global uncertainty

Pristine provides logistics infrastructure and services, pivoted around rail transportation networks. It also offers synergetic logistics infrastructure and services across the spectrum, including non-container, container, rail transportation and road transportation services.

It also helps in areas such as integrated logistics solutions by offering warehousing, storage and cargo handling, rail transportation, road transportation, and third-party logistics (3PL) services and identifies these services as the company’s key revenue streams.

Equity shares of both companies will be listed on BSE and NSE.

Meanwhile, Mukka Protein, which filed its IPO papers with Sebi in March this year, withdrew its DRHP on September 27, an update with Sebi showed.

The company is engaged in manufacturing of fish meal, fish oil and fish soluble paste which is widely used as a raw material in aqua feed, poultry feed, soap manufacture, leather tanneries and paint industries globally.

Colgate-Palmolive Q2 Results: Profit rises 22.3% on-year to Rs 340.05 crore, revenue up 6%; Rs 22 dividend declared

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Colgate-Palmolive (India) Limited on Thursday posted profit for the quarter ended September 2023 at Rs 340.05 crore, up 22.3 per cent in comparison to Rs 278.02 crore during the same period last year, surpassing estimates. It posted revenue from operations at Rs 1471.09 crore, up 6 per cent as against Rs 1387.48 crore during the second quarter of FY23. The company EBITDA stood at Rs 482.2 crore. EBITDA margins continued to improve, up 120 bps vs. sequential quarter and up 340 bps vs. prior year quarter driven by pricing and efficiencies. According to a CNBC TV18 poll, Colgate-Palmolive was expected to post Q2 profit at Rs 332 crore and revenue at Rs 1502 crore.

Colgate-Palmolive reported a 6.1 per cent increase in net sales for the second quarter, reaching Rs 1462.4 crore as of September 30, 2023, compared to the same period in the previous year. Domestic growth was reported at 6.6 per cent for the quarter.

“We continue to be happy with our momentum and continue to be focussed on strengthening our brand portfolio and delivering superior products to consumers. In this quarter, we have doubled down on the Colgate Strong Teeth relaunch, expanding reach & availability. This has been further supported by the excellent performance of Colgate Max Fresh, which has been relaunched with the best, proprietary freshness technology. We have also restaged our largest toothbrush franchise, Colgate Zig Zag with a superior mix that focuses on its core equity of deep, interdental cleaning. Our domestic growth remains strong, registering a 6.6 per cent increase over the previous year quarter, with our toothpaste segment witnessing higher single-digit growth,” said Prabha Narasimhan, Managing Director & CEO, Colgate-Palmolive (India) Limited.

Furthermore, the company board also said that consequent to the appointment of Niraj Kumar, Business Lead – Bangladesh, Nepal and Sri Lanka, as the Managing Director of Colgate-Palmolive ACI Bangladesh Pvt Ltd, he ceases to be a member of the leadership team of the Company effective October 26, 2023.

Niraj Kumar is a seasoned professional with more than 2 decades of experience in the FMCG Industry. He is currently acting as a Business Lead – Bangladesh, Nepal and Sri Lanka for Colgate-Palmolive (India). He joined Colgate in 2007 as Customer development manager, where he worked on turnaround of business leading to market leader in struggling markets, the company said. He also led North and East India business as Customer development team leader successfully with strong business and share growth.