Sensex Today Tanks 695 Points, Nifty Below 18,100 | Federal Bank Slumps 8%, IndusInd Bank 5% | 3 Reasons Why Indian Share Market is Falling

Fri, 5 May Closing

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After opening the day marginally lower, Indian share markets fell sharply in the afternoon session, plunging nearly 1%.

Benchmark indices declined on Friday and erased weekly gains amid weakness in financials stocks due to declines in HDFC and HDFC Bank shares, and persistent fears over the US banking sector.

The bloodbath on Dalal Street today resulted in the market capitalisation of all listed companies on BSE declining by Rs 1.4 trillion (tn) to Rs 273.7 tn.

At the closing bell, the BSE Sensex stood lower by 695 points (down 1.1%).

Meanwhile, the NSE Nifty closed down by 187 points (down 1%).

Nestle and Titan were among the top gainers today.

HDFC and Hindalco on the other hand, were among the top losers today.

Check out the NSE Nifty heatmap to get the complete list of gainers and losers.

The SGX Nifty was trading at 18,135 down by 149 points, at the time of writing.

Broader markets ended on a negative note with the BSE Midcap index ending 0.5% lower and the BSE Smallcap index ending 0.4% lower.

Sectoral indices ended on a mixed note with stocks in the FMCG sector and capital goods sector witnessing most of the buying.

On the other hand, stocks from the financial sector and metal sector witnessed selling pressure.

Shares of MRF and TVS Motor hit their 52-week highs today.

Now track the biggest movers of the stock market using stocks to watch today section. This should help you keep updated with the latest developments...

Asian stock markets ended on a positive note. The Nikkei rose marginally, while the Hang Seng was up 0.5%. The Shanghai Composite ended 0.5% lower.

The rupee is trading at 81.73 against the US$.

Gold prices for the latest contract on MCX are trading 0.4% lower at Rs 61,259 per 10 grams.

Meanwhile, silver prices for the latest contract on MCX are trading lower by 0.2% at Rs 77,878 per kg.

3 Reasons Why Sensex and Nifty Fell Today

#1 HDFC merger

MSCI could add HDFC Bank to the Large Cap Segment of MSCI Global Standard indexes. The addition of India's largest private lender to the Large Cap Segment with adjustment factor of 0.5 versus market expectations of 1 will mean that no incremental inflow is likely to happen.

This would result in some outflows of US$ 150 to US$ 200 m, making HDFC and HDFC Bank the top laggards today, falling over 5% each.

#2 Weak global cues

Wall Street stocks dropped on Thursday following another brutal sell-off in regional banking shares, in the wake of four bank failures since early March.

The Dow Jones Industrial Average fell 0.9%. The broad-based S&P 500 shed 0.7%, while the tech-rich Nasdaq Composite Index lost 0.5%.

Asian stocks were mixed on Friday following a slide on Wall Street driven by renewed fears of banking sector turmoil.

#3 Index-heavyweight shares tank

Index heavyweights HDFC, HDFC Bank, Infosys and M&M contributed more than 70% to today's fall.

Speaking of stock markets, have valuations in rail stocks run ahead of the fundamentals?

The Sensex has returned a little under 5% over the last one year, not a bull market by any stretch of imagination.

However, what about returns like 220%, 253%, 106% and even 57% over the last one year? Can you call this a bull market? We do think so.

These are the returns earned by Titagarh Wagons, RVNL, IRCON and RITES respectively in the last one year. And if their magnitude is anything to go by, there is definitely a bull market underway here.

The below video is not about whether you should buy railway stocks, especially after their crazy run-up in the last one year or so.

In the below video, Rahul Shah, Co-head of Research at Equitymaster, talks about the right exit strategy for them.

Why TVS Motor share price gained 5% today

In news from the automobile sector, shares of TVS Motor jumped 5% today after the company reported better-than-expected earnings and a strong outlook.

The automobile giant reported a 19.4% YoY rise in revenue to Rs 66 billion (bn). Net profit for the quarter came in at Rs 4.1 bn, up 50% YoY, against 2.7 bn a year back.

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The boost in profits can be attributed to the success of premium products, a more readily available chip supply, and a decrease in commodity prices.

On the operating front, EBITDA (earnings before interest, taxes, depreciation and amortisation) jumped 22% YoY to Rs 6.8 bn against Rs 5.6 bn a year back.

The EBITDA margin rose 0.2% to 10.3% despite lower exports and higher EV volumes.

Overall sales of the two and three-wheelers, including exports, stood at 860,000 units.

Going forward, the company expects the margin to remain stable in the coming quarter, despite a moderate increase in raw material prices during the first quarter of fiscal year 2024.

Note that TVS Motor Company is in talks for investment in its electric vehicle (EV) arm.

The electric vehicle (EV) megatrend is a once in a century revolution happening right in front of us.

The revolution has taken the auto sector by storm. All segments of the sector are ripe for disruption, and India's top EV stocks are set to benefit from this shift.

Take a look at the chart below, which shows the massive opportunity in the two-wheeler EVs.

It remains to be seen how the above developments pan out.

Why CEAT share price is rising

Moving on news from the tyre sector, shares of CEAT rose more than 5.5% today after the tyre-maker reported an impressive growth in earnings in the fourth quarter of the financial year 2023-24.

The tyre company reported a 10.9% YoY growth in revenue to Rs 28.7 bn, driven by OEMs and speciality & passenger category tyres.

Net profit for the quarter came in at Rs 1.3 bn, up 420.7% YoY, against Rs 254 m in the year-ago period.

The EBITDA margin rose 5.5% YoY to 13.1% in the March 2023 quarter.

On the export front, the company continued to face pressure as a result of the global economic headwinds spurred by the ongoing war and the currency devaluation.

However, the company has begun to see some recovery in exports and the replacement market, especially in the commercial category.

Tyre stocks were on a roll in the calendar year 2022 and gained momentum in January 2023. To know why, check out our editorial - why tyre stocks are rising.

Symphony Q4 net profit drops 75%

Moving on to news from the consumer durables sector, Symphony reported a 19.8% YoY decline in revenue at Rs 3.1 bn, against Rs 3.8 bn.

Net profit for the March quarter declined 75% YoY to Rs 160 million (m) for the March 2023 quarter. It had posted a profit of Rs 640 in the corresponding quarter of the previous financial year.

This was as global headwinds severely impacted the performance of CT Australia (USA & Australia domestic both), which impact its consolidated profitability for the quarter.

Symphony's EBITDA (earnings before interest, taxes, depreciation, and amortisation) fell 68% YoY at Rs 270 m, against Rs 860 m a year back.

Its margin stood at 8.8% in the March 2023 quarter against the 22.4% posted a year back.

In addition, the board of directors has recommended a final dividend of Rs 1 for the financial year 2023.

The company in Q4 recorded the highest-ever Q4 domestic sales in the reported quarter despite unseasonal rains in March 2023. It has seen a 23% growth in sales.

Following the weak quarterly result, shares of Symphony witnessed a sharp decline of 4% today.

A similar decline was witnessed in March 2023. To know why, check out our editorial - why Symphony share price is falling.

And to know what's moving the Indian stock markets today, check out the most recent share market updates here.

For information on how to pick stocks that have the potential to deliver big returns, download our special report now!

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