Mid-Day Mood | Markets nurse losses amid weak global cues; banking, finance stocks top drags

Sector-wise, realty, banks, financial services, FMCG, IT and teck were trading in the red, while healthcare, commodities, energy, industrials, utilities and metal posted gains.

The BSE mid-cap index inched up 0.54 percent, while the small-cap gauge rose 0.26 percent.

Continuing their selling spree, foreign institutional investors (FIIs) offloaded shares worth a net Rs 549.37 crore on November 6, while DIIs bought to the tune of Rs 595.70 crore.

ICICI Bank was the top laggard in the Sensex pack, tumbling 1.34 percent, followed by Power Grid which lost 1.10 percent. Bajaj Finance was trading around 1 percent lower after the company on November 6 informed the stock exchanges that it has launched a Qualified Institutional Placement (QIP) to raise funds. The floor price has been set at Rs 7,533.81 per share.

The development comes a month after the NBFC had announced that it would be looking for a Rs 10,000-crore fundraise through QIP as well as the preferential issue of shares. In a regulatory filing on November 7, the company said that it may offer a discount of up to 5 percent on the floor price.

Sources told CNBC-TV18 that the company is likely to raise up to Rs 8,800 crore through the QIP. The indicative price for the fundraise is likely at 4 percent discount to current market price.

The gainers' list included Sun Pharma, NTPC, JSW Steel, IndusInd Bank and UltraTech Cement.

Despite oversubscription, Honasa Consumer saw an uninspiring start on the bourses on November 7. Shares of Mamaearth's parent company started trading at Rs 330 on the NSE and Rs 324 on the BSE, against an issue price of Rs 324.

Mamaearth’s IPO had sailed through, led by qualified institutional bidders (QIB) who bought 11.5 times, while retail investors remained cautious, subscribing 1.4 times the allotted quota.

The company reported a net loss of Rs 150.9 crore during the year ended March 2023, impacted by the impairment loss on goodwill and other intangible assets, against a profit of Rs 14.4 crore in the previous year.

The volume growth fell significantly to 68.23 percent in FY23 from 143.3 percent in FY22 and 298.42 percent in FY21. However, revenue from operations recorded a CAGR of 80.14 percent for FY21-23.

Divi’s Laboratories was trading flat after the pharmaceutical major on November 6 reported a weak set of earnings for the July-September quarter, marked by a sharp contraction in operating margins which have turned brokerages bearish on the stock.

The company missed the Street estimate by recording a 29.50 percent year-on-year decline in consolidated net profit to Rs 348 crore in Q2, when its revenue increased a mere 3 percent.

Operating margin also contracted sharply to 25.1 percent as against 33.5 percent in the base period, facing the heat of lower pricing in the generic API (active pharmaceutical ingredients) segment.

Shares of Adani Energy Solutions (AESL) dipped 0.15 percent after the power producer reported its Q2FY24 results on November 6. For the quarter ended September 2023, net profit grew by 47 percent to Rs 248 crore. The results were announced post market close.

Adani Energy Solutions, formerly known as Adani Transmission, reported a 13 percent rise in revenue to Rs 3,421 crore. Earnings before interest, taxes, depreciation and amortisation (EBITDA) grew by 6 percent to Rs 1,443 crore.

On the global front, Asian stocks snapped a three-day winning streak on Tuesday, weighed by mixed Chinese trade data, even as a rate hike in Australia was taken as likely to be the last in its cycle.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.2 percent following a three-day rally that lifted the benchmark by nearly 6 percent.

South Korean shares fell 3 percent as traders unwound some of Monday's surge on the re-imposition of a short-selling ban. Japan's Nikkei shed 1.1 percent.

China's imports unexpectedly grew in October, while exports contracted at faster, in a mixed set of indicators that showed the recovery in the world's second-largest economy remains uneven. The Shanghai Composite fell 0.4 percent.

Treasuries were broadly steady in Asia. The ten-year yields hovered at 4.92 percent.

Overnight, the Nasdaq logged a seventh straight session of gains - its longest streak since January. S&P 500 futures and European futures each fell 0.2 percent.

"The market construct is favourable for consolidation around current levels and gradual up move. The 6-day winning streak in S&P 500 provides global stability to markets. Stable crude, steady dollar, down trending US bond yields and declining gold are indicators of stability in markets,” said VK Vijayakumar, chief investment strategist at Geojit Financial Services.

Investors have to appreciate the fact that the rally in small and midcaps is primarily driven by retail buying on every dip, he noted. The explosive growth in demat accounts which have touched 132 million plays a major role in the rally in the broader market, while the largecaps are under pressure from FII selling.

“But largecaps, particularly ICICI Bank, HDFC Bank, RIL, Tata Motors, Bajaj Auto, L&T and Bajaj Finance, have fundamental strength reinforced by the Q2 results. FIIs turning buyers in India is only a question of time. When that happens, large caps will outperform the broader market," he said.

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