Tale of the Tape 

Hola Amigos.

Nifty and Sensex snapped their record breaking rally, tracking the weakness in global markets. Midcaps (-0.1%) and Smallcaps didn’t move much either. The advance-decline ratio was evenly split.

Most sectors ended in the red. Pharma (+0.7%) and Real Estate (+0.7%) were the outliers. Meanwhile, PSU Banks (-1.7%) saw the most selling. IT (-0.9%) and Metals (-0.8%) were also under pressure.

Crude oil prices have turned negative for 2024. Read our top story below on the winners and losers.

General Insurance Corporation of India cracked -6% after the GOI started its stake sale. Shree Tirupati Balajee’s IPO kicks off tomorrow. More details below.

Defence stocks got a boost after the GOI signed off on Rs 1.4 lakh cr worth of acquisition proposals. Check out their charts below.

Jubilant Ingrevia jumped +10% after Equirius raised its target price to Rs 900 p/sh (+21% upside), citing reduced competition in the US and favourable pricing dynamics.

Exicom Tele-Systems was locked in a -5% lower circuit after RARE Enterprises sold a 1.3% stake in the firm.

ECOS (India) Mobility had a solid market debut. The stock closed at Rs 443 p/sh; +32% from its IPO price.

Sona BLW (+2%) was in focus after reports said it could acquire Escort Kubota’s rail engineering biz for Rs 2,000-cr. 

AU Small Finance Bank (+2%) has submitted an application to the RBI to transition to a universal bank.

Mastek (-1%) was in focus after 23.5 lakh shares (7.6% equity) changed hands in a block deal; the buyers and sellers were not immediately known. 

Rama Steel Tubes soared +12% after it formed a partnership with Onix Renewable to supply components for solar energy projects.

Here are the closing prints:

Market
Oil Down Stocks Up?

Global oil prices fell -5% yesterday giving up all of its 2024 gains in the process. PS - remember back in April when prices hit multi-year highs and we were worried about $100 per barrel? Lol. Anyway, here’s a quick list on which sectors & stocks stand to benefit the most:

1) First level: OMCs are the biggest direct beneficiary, with IOC, BPCL and HPCL gaining up +2% to +8% over the last week since the fall started. This is because lower oil costs allow them to increase their refining margins. FYI - on the flipside, this sucks for oil drilling firms like ONGC (-3%) and Oil India (-3%) as it hurts profitability!

2) Second level: Sectors where oil derivatives or petrochemicals are major raw materials will see some relief. The biggest one is the paint industry; Asian Paints, Berger Paints, Indigo Paints and Kansai Nerolac were up +3% to +5% today. The aviation biz will also benefit, with jet fuel being a major driver of profitability.

3) Third level: Broadly speaking, rate-sensitive sectors should benefit. This is because for every $10 bump in oil prices, India’s inflation goes up 0.3 percentage points. Lower Brent crude and slightly softening GDP growth should help convince the RBI to cut rates quicker, helping multiple industries including banking & auto!

Big Picture: While there’s reason to cheer, let’s not forget that a big trigger for lower oil prices is the slowing global economy. China is still in a rut, the US is flirting with recession and parts of Europe are just hanging on there. A strong global economy is important for India’s long-term growth as well. It hurts our exports, our FDI and ultimately our markets. Here’s hoping for the best.

Stocktwits Specials

Raymond shares have jumped +12% in the past month ahead of the highly anticipated demerger of its Lifestyle business. Fun Fact: it is the largest branded player in the men’s branded apparel market. Going forward, the company aims to double their Exclusive Brand Outlets (EBOs). Here’s a quick look at what’s in store