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Informist, Thursday, Oct. 17, 2024

By Alina Geogy

MUMBAI – Corporate earnings took centrestage Thursday, with investors' eyes on the quarterly financial performance of four Nifty 50 majors slated for the day. Shares of Bajaj Auto plunged 13% to an over one-month low after the company reported slightly weaker-than-expected earnings for Jul-Sept and outlined a weak outlook for festival season demand. This weighed on sentiment and took down all automobile stocks. Along with these, losses in shares of heavyweight banking stocks took the benchmark Nifty 50 index close to its one-month low.

Broadly, the guidance for the Nifty 50 companies is "not comforting for the market", Narendra Solanki, head of fundamental research – investment services at Anand Rathi Share & Stock Brokers, said. Besides the largely gloomy earnings season, Solanki also pointed to recent data hinting at a slowdown in the economy and weak cues from global markets as reasons for the fall in share prices.

Of the Nifty 50 index constituents, 40 ended down Thursday and as many as three-fourth of all stocks traded on the NSE ended lower. The Nifty 50 ended at 24749.85 points, down 221.45 points or 0.9%, and the Sensex ended at 81006.61 points, down 494.75 points or 0.6%. Both indices fell for the third consecutive session. India VIX, the fear-gauge of the market, rose for the third day in a row Thursday and ended up nearly 3%.

Shares of Bajaj Auto fell a whopping 13% after the company said it expects sales for the festival season to grow 3-5% on year, lower than the 8-9% growth estimated earlier. The company also said two-wheeler industry sales till Dussehra were muted compared to the year-ago period. This lower outlook by Bajaj Auto rubbed on stocks of other automakers such as Hero MotoCorp and Mahindra & Mahindra, which ended over 3% lower each. As a consequence, the Nifty Auto index ended 3.5% lower and was the second worst-hit sectoral index.

Shares of Nestle India also fell sharply after the fast-moving consumer goods firm's revenue for Jul-Sept missed analysts' expectations, even though net profit was better than expectations. Cost of raw materials rose for the first time after four quarters of an on-year decline. Nestle India said while pressure from raw material costs affected its performance during the quarter, such costs were relatively stable for some raw materials. It also said it plans to address the pressure that some key brands faced due to softer consumer demand. However, investors did not seem reassured, and strong selling took the stock down over 3%.

Shares of major private-sector lenders HDFC Bank, Axis Bank, and ICICI Bank fell 1-2% and weighed on the indices. Apart from Bajaj Auto, these stocks were the top contributors to the fall of the Nifty 50 index. The Nifty Bank ended lower for the second straight day owing to losses in these stocks. Losses in shares of Axis Bank came ahead of its Jul-Sept earnings, which were released after market hours.

Shares of Infosys ended 2.5% higher and were the best performers in the Nifty 50. The stock rose ahead of its Jul-Sept earnings, with analysts expecting the company to post strong sequential earnings growth and raise revenue growth guidance in constant currency terms for 2024-25 (Apr-Mar). Shares of its peers such as Tech Mahindra and Tata Consultancy Services also rose. Gains in these stocks took the Nifty IT index up over 1%, making it the sole gainer among sectoral indices.

However, shares of IT firm Wipro, which posted earnings after market hours, ended nearly 1% lower after shedding initial gains. Anticipation that the information technology major would report muted financial performance for the quarter owing to weak discretionary spending and weakness in select verticals such as communications, manufacturing, and energy and utilities, weighed on investor sentiment, analysts said.

Among other companies in focus because of earnings were Havells India and Tata Communications. Shares of both companies extended losses after net profit for the September quarter failed to meet the Street's expectations. On the flip side, shares of Indian Overseas Bank gained over 2% after the bank reported strong on-year growth in both total income and net profit for the September quarter.

The broader market indices fell more than the benchmark indices. Of these, the Nifty small-cap snapped at least six days of gains. Among sectoral indices, Nifty Realty and Nifty Auto were the worst hit, while Nifty PSU Bank and Nifty Energy fell the least.

* Of the Nifty 50 stocks, 10 rose and 40 fell

* Of the Sensex stocks, 9 rose and 21 fell

* On the NSE, 721 stocks rose, 2,047 fell, and 74 were unchanged

* On the BSE, 1,272 stocks rose, 2,690 fell, and 102 were unchanged

* Nifty Realty: down 3.8%; Nifty Auto: down 3.5%; Nifty IT: up 1.2%

BSE                                               NSE

Sensex: 81006.61, down 494.75 points or 0.61%     Nifty 50: 24749.85, down 221.45 points or 0.89%

End

Edited by Vidhi Verma

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