Market Update: Gift Nifty Declines, Godfrey Phillips Eyes Bonus Issue, SpiceJet's Expansion Plans, and Top Buzzing Stocks"

As the trading week concluded, Indian stock indices showed signs of weakness, with benchmark indices such as the BSE Sensex and NSE Nifty 50 dipping notably. Analysts pointed to profit-booking at record-high levels, with market participants eagerly awaiting the release of critical US payroll and jobs data, which could further influence global markets.

Key Market Movements on Friday

• BSE Sensex ended the session down by 1,017 points, reflecting a 1.2% loss.

• Meanwhile, NSE Nifty 50 dropped by 292.9 points, representing a 1.2% decline.

• Asian Paints, JSW Steel, and Bajaj Finance emerged as top gainers, while SBI, BPCL, and NTPC were among the major losers for the day.

Sector-wise, indices in the telecom and oil & gas sectors saw significant selling pressure, contributing to the overall downward momentum.

Broader Market Performance

Mid-cap and small-cap stocks mirrored the weakness in the broader indices:

• BSE MidCap index fell by 1.4%.

• BSE SmallCap index registered a 0.9% drop.

Global Cues: Gift Nifty Suggests a Weak Opening

At 7:45 AM today, Gift Nifty was trading 84 points lower, signaling a negative start for Indian markets. Investors are likely positioning cautiously ahead of key global data releases, which could further influence market sentiment.

Top Buzzing Stocks in Focus

Several stocks were in the spotlight during Friday’s session due to significant developments or strong trading volumes. Here’s a roundup of some of the most buzzing stocks:

1. Marico

Shares of Marico surged by over 4.5% amid a generally subdued market. The FMCG giant saw over 5.7 million shares traded, more than double the average daily volume, driven by strong investor interest. While consumer staples have traditionally been seen as stable, Marico and peers like Hindustan Unilever could face challenges as their distribution advantages come under pressure from evolving market dynamics.

2. Wockhardt

Pharma company Wockhardt was another buzzing stock, but for different reasons. The stock tumbled by over 5% following allegations by the Congress Party accusing SEBI chairperson Madhabi Puri Buch of a conflict of interest involving the company. This controversy could weigh on investor sentiment in the short term.

Corporate Developments: Bonus Issues and Business Expansions

1. Godfrey Phillips: Considering a Bonus Issue

Cigarette manufacturer Godfrey Phillips announced it will consider a bonus issue in its upcoming board meeting. The company has scheduled a meeting on 20 September 2024 to potentially recommend a 1:2 bonus issue, which would provide shareholders with two additional shares for each share they currently hold.

This move, if approved, would be a positive for shareholders, as it rewards their loyalty and can improve liquidity in the stock.

2. Ease My Trip: Venturing into EV Buses

Ease My Trip (EMT), India’s second-largest travel portal, announced plans to enter the electric vehicle (EV) bus manufacturing sector. The company is developing an EV bus prototype, which it aims to launch by the next financial year.

The project, backed by an initial investment of ₹2 billion for research and development, will focus on producing 2,000 buses in the first phase, eventually scaling up to 5,000 units. EMT’s foray into EV bus manufacturing is aligned with its existing bus ticketing business and is a step toward diversification. The company is seeking government support through the **Production Linked Incentive (PLI) scheme**, which could further boost its ambitions.

3. SpiceJet: Fleet Expansion Plans

Embattled airline SpiceJet revealed plans to unground 28 of its aircraft, potentially doubling its current operational fleet. The airline’s fleet size has been significantly reduced due to grounded planes, a situation exacerbated by financial difficulties and the global grounding of Boeing 737 Max aircraft in 2019.

SpiceJet is eyeing a turnaround, citing exclusive access to regional and international routes and lower fuel prices as potential growth catalysts. However, the company faces substantial financial liabilities, including ₹37 billion in dues owed to lessors, engineers, and vendors, alongside ₹6.5 billion in outstanding statutory payments.

Sectoral Analysis: Telecom and Oil & Gas

Both the telecom and oil & gas sectors experienced heavy selling pressure during Friday’s session. The surge in crude oil prices has weighed on companies in these sectors, especially those like SpiceJet, which rely heavily on fuel.

Additionally, regulatory challenges and competition within the telecom sector have dampened investor sentiment. With evolving market dynamics and global uncertainties, both sectors may continue to face headwinds in the near term.

Commodities Watch: Gold Prices Inch Higher

In commodities, gold prices traded marginally higher at ₹71,996 per 10 grams during Indian market hours. The precious metal remains a safe haven for investors amid market volatility and economic uncertainties.

Looking Ahead: Key Factors for the Upcoming Trading Sessions

Investors will continue to monitor global cues, especially the release of US jobs data, which could have a significant impact on markets worldwide. Domestically, corporate developments like bonus issues, business expansions, and SpiceJet’s fleet plans are expected to dominate headlines in the coming days.

Indian markets are poised for a cautious start today, as indicated by the Gift Nifty. Investors may look for opportunities in sectors such as FMCG and renewables, while staying alert to potential risks in volatile sectors like aviation and telecom.