The BSE Sensex ended almost flat, while the 50-unit Nifty ended with minor gains after a volatile session on Tuesday. Metal and realty shares advanced while banks shares extended recent losses.
The barometer index, the S&P BSE Sensex, rose 7.09 points or 0.01% to 49,751.41. The Nifty 50 index added 32.10 points or 0.22% to 14,707.80.
ONGC (up 5.55%), Larsen & Toubro (up 2.35%) and Ultratech Cement (up 1.68%) supported the indices.
Domestic shares witnessed value buying after recent steep losses. In the past five sessions, the Sensex fell 4.62% and the Nifty corrected 4.17%.
The broader market ended on a firm note on Tuesday. The BSE Mid-Cap index rose 0.98% and the BSE Small-Cap index gained 0.74%.
The market breadth was positive. On the BSE, 1690 shares rose and 1232 shares fell. A total of 159 shares were unchanged.
Total COVID-19 confirmed cases worldwide stood at 11,17,25,784 with 24,74,350 deaths. India reported 1,47,306 active cases of COVID-19 infection and 1,56,463 deaths while 1,07,12,665 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.
Numbers to Watch:
The yield on 10-year benchmark federal paper fell to 6.172% as compared with 6.202% at close in the previous trading session.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 72.46, compared with its close of 72.49 during the previous trading session.
In the commodities market, Brent crude for April 2021 settlement rose 55 cents at $65.79 a barrel. The contract rose $2.33, or 3.70% to settle at $65.24 a barrel in the previous trading session.
European stocks declined across the board while most Asian shares advanced on Tuesday. Markets in Japan are shut today for a holiday.
Policy makers are reportedly becoming concerned about the rapid rise in bond yields. European Central Bank President Christine Lagarde has reportedly said that her institution is "closely monitoring" the market for government bonds.
In US, the S&P 500 and Nasdaq closed lower on Monday as climbing Treasury yields and prospects of rising inflation triggered valuation concerns, hitting shares of high-flying growth companies.
The U.S. House of Representatives Budget Committee on Monday approved legislation with $1.9 trillion in new coronavirus relief, advancing a top priority of President Joe Biden toward a full House vote on passage expected later this week.
All eyes will be on Federal Reserve Chairman Jerome Powell, who delivers his semi-annual testimony on the economy before the Senate Banking Committee on Tuesday. His comments on rates and inflation could determine the market direction for the week.
On the pandemic front, the White House said that it expects to ship out millions of delayed coronavirus vaccine doses this week after a sweeping winter storm disrupted logistics.
Buzzing Indian Segments:
The Nifty Bank index declined 0.40% to 35,116.95 on Tuesday. It has fallen 5.87% in six consecutive sessions.
Kotak Mahindra Bank (down 3.89%), Bank of Baroda (down 3.69%), HDFC Bank (down 1.21%), Bandhan Bank (down 0.66%), Axis Bank (down 0.27%), RBL Bank (down 0.11%) and IDFC FIRST Bank (down 0.08%) declined.
PNB (up 0.24%), ICICI Bank (up 0.94%), SBI (up 1.54%), Federal Bank (up 2%) and Indusind Bank (up 2.45%) advanced.
The Nifty Metal index jumped 3.89% to 3,749.55. The index has risen 5.56% in two sessions.
Hindustan Copper (up 19.97%), Tata Steel (up 7.24%), SAIL (up 6.14%), NALCO (up 5.51%), JSPL (up 5.05%), MOIL (up 3.23%), APL Apollo Tubes (up 3.06%), NMDC (up 2.63%), MIDHANI (up 2.55%), JSW Steel (up 2.31%) and Coal India (up 0.55%) jumped.
Shares of metal and mining companies are soaring on expectations that post-crisis demand for base metals will outstrip near-term supply.
Hindalco Industries jumped 5.51% after the company announced a capital allocation framework for growth capex, debt reduction and for shareholders returns.
On a consolidated level, the company expects to generate over $1 billion to $1.2 billion cash flow per annum post its normal working capital and maintenance capex. Allocation towards growth capex is considered at approximately $2.5 billion to $3 billion over the next five years.
The company expects consolidated gross debt to be $9.20 billion (or 3x its EBITDA) as on 31 March 2021. It expects to achieve a net debt/EBITDA ratio of 2.5x in less than two years.
The company's board of directors have approved amending the company's Dividend Distribution Policy. The company has decided to pay an 8-10% dividend from the consolidated free cash flow. The dividend will be declared out of the profits of that financial year or previous financial years after providing for past depreciation.
Stocks in Spotlight:
Reliance Industries (RIL) added 0.84% after the conglomerate on Tuesday announced the demerger of its oil-to-chemicals (O2C) business into a wholly-owned subsidiary.
RIL said it has initiated the process of carving-out O2C business into an independent subsidiary. The company said the reorganization would enable a focused pursuit of opportunities across the O2C value chain, improved efficiencies through a self-sustaining capital structure. Reorganisation of O2C business facilitates participation by strategic investors and marquee sector focused investors, it added.
The company expects to complete the demerging process into an independent subsidiary by the second quarter of FY22. RIL said it has already received a nod from the Securities and Exchange Board of India (Sebi) and stock exchanges for the reorganisation. However, it is yet to get a clearance from equity shareholders and creditors, the income tax authority and National Company Law Tribunal (NCLT) benches in Mumbai and Ahmedabad.
RIL has acknowledged that there are ongoing talks with Aramco for a deal. RIL has also extended an interest-bearing loan of $25 billion to the O2C business. The O2C business will pay floating rate interest linked to one-year SBI MCLR rate. It is a long-dated loan with flexibility to structure repayments.
Bharat Forge advanced 3.36% after the company said it has received a Rs 177.95-crore order from the Indian Ministry of Defence for supplying Kalyani M4 vehicles under emergency procurement.
Separately, Bharat Forge and Paramount Group, a global aerospace and technology company, collaborated to manufacture armoured vehicles in India.
Zuari Agro Chemicals soared 19.26% after the company's board approved selling the company's fertilizer plant at Goa and associated businesses of the company to Paradeep Phosphates (PPL) as a going concern, on a slump sale basis for an agreed enterprise value of $280 million as defined in the business transfer agreement.
IndiaMART InterMESH gained 4.35%. The fund raise committee of the company's board approved allotment of 12,42,212 equity shares to eligible qualified institutional buyers at the issue price of Rs 8,615 per equity share, aggregating to Rs 1,070.16 crore.
Cochin Shipyard added 7.69% after the PSU company announced that it has been declared as L1 bidder in the tender floated by the Indian Navy. The scope of order involves construction of six Next Generation Missile Vessels (NGMV) and the estimated total order value is around Rs 10,000 crore.
Page Industries jumped 5.23% after the company's board approved the appointment of V S Ganesh as the executive director & chief executive officer of the company for a period of five years effective from 1 June 2021.