Market Update: Gift Nifty Slips, Shakti Pumps Announces Bonus Shares, Hero Motors Withdraws DRHP & Top Buzzing Stocks

Indian stock markets experienced a downturn on Monday, as the session wore on, culminating in a weak close across major indices. The initial optimism in the markets gave way to a widespread sell-off across various sectors, resulting in a downward trend.

Benchmark Indices Drop After Early Gains

By the end of trading on Monday, both the major indices BSE Sensex and NSE Nifty had erased their early gains, closing in the red. The BSE Sensex fell sharply by 638 points, a decline of 0.8%. Similarly, the NSE Nifty index experienced a loss of 219 points, down by 0.9%. This market retreat was primarily driven by sector-wide sell-offs, which impacted investor sentiment.

Top Performers and Losers

Among the leading gainers in Monday’s session were Mahindra & Mahindra (M&M), ITC, and Trent, which managed to buck the overall market trend. On the other hand, NTPC, SBI, and Adani Ports emerged as the day’s biggest losers, weighing down the indices.

Broader Market Performance: Mid and Small Cap Struggles

It wasn’t just the benchmark indices that faced pressure broader markets also witnessed a significant downturn. BSE Mid Cap Index saw a considerable decline of 1.9%, while the BSE Small Cap Index dropped by 3.3%. These negative performances across mid- and small-cap stocks underscore the extent of market weakness across the board.

Sectoral Analysis: Mixed Performance

Apart from the Information Technology (IT) sector, which remained relatively stable, all other major sectoral indices closed on a negative note. Stocks within energy, oil & gas, metal, and power sectors were hit the hardest, experiencing significant selling pressure throughout the day.

Gold Prices Edge Higher

Amidst the turbulence in the stock market, gold prices provided a glimmer of positivity. On the Multi Commodity Exchange (MCX), gold prices for the latest contracts were trading 0.2% higher, reaching Rs 76,274 per 10 grams by the time the Indian markets closed on Monday. This upward movement in gold is often seen as a sign of investors seeking safer havens during times of market volatility.

Gift Nifty Reflects Negative Sentiment

As of 8:00 AM today, Gift Nifty was trading 69 points lower, at 24,880 levels. Gift Nifty, which serves as an indicator of how the Indian market might open, suggests that Indian share markets are headed for another negative start today, following the trend from the previous session.

Key Buzzing Stocks to Watch

Several stocks are expected to remain in focus today, as they either extended their losses or experienced notable developments:

Reliance Power

The shares of Reliance Power have been on a consistent downtrend, declining for the third consecutive session. On 7 October, the stock hit its 5% lower circuit as investors continued to engage in profit-booking. The stock is now trading 11% below its 52-week high of Rs 53.6, reached last week, suggesting further pressure on the stock price.

Suzlon Energy

Another key stock under the spotlight is Suzlon Energy, which has been facing an extended period of losses. The stock saw a sharp decline, falling 5%, marking its eighth consecutive losing session. Over the past week, Suzlon’s share price has dropped by over 12%, partly due to concerns raised in an ‘advisory cum warning letter’ issued by the BSE and NSE. This letter flagged corporate governance issues after the resignation of independent director Marc Desaedeleer, contributing to the stock’s downward momentum.

Shakti Pumps Announces Bonus Shares

In positive corporate news, the board of directors of Shakti Pumps has approved a bonus issue for shareholders in a 1:5 ratio, meaning every shareholder will receive five free equity shares for each share they currently hold. This decision was taken during a board meeting on 7 October 2024.

The bonus shares will be fully paid-up equity shares of Rs 10 each, and the company has yet to announce the record date, which will determine shareholder eligibility. Investors should keep an eye on future announcements regarding the record date.

Additionally, Shakti Pumps has been consistently rewarding its shareholders, having recently paid a final dividend of Rs 4 per share on 23 September 2024. This follows the Rs 2 dividend issued in September 2023.

Airtel Launches ‘Secure Internet’ in Partnership with Fortinet

Telecom giant Airtel has unveiled a new cybersecurity solution, ‘Airtel Secure Internet’, in collaboration with Fortinet, a global leader in cybersecurity. This solution aims to provide robust, fully-managed protection against online threats, tailored for businesses using Internet Lease Line (ILL) circuits.

Airtel Secure Internet service integrates Fortinet’s next-generation firewall technology with Airtel’s trusted internet connectivity to deliver comprehensive protection. The service will also leverage Airtel’s Security Operations Centre (SOC) and Fortinet’s Security Orchestration, Automation and Response (SOAR) platform, offering businesses a future proof, scalable solution that mitigates cybersecurity risks.

This launch addresses the increasing demand for robust cybersecurity solutions, particularly for enterprises operating across multiple locations that may lack adequate in-house security expertise.

Hero Motors Withdraws DRHP

In regulatory news, Hero Motors has withdrawn its Draft Red Herring Prospectus (DRHP) as of 5 October. Company, which is the flagship auto component arm of the Hero Motors Company (HMC) Group, had previously planned to raise Rs 9 billion through a combination of a fresh issue and an Offer for Sale (OFS).

As part of the offering, OP Munjal Holdings, a promoter entity, had been slated to sell Rs 250 crore worth of shares, while other promoters Bhagyoday Investments and Hero Cycles were expected to sell Rs 750 million each through the OFS.

Hero Motors specializes in providing powertrain solutions for both electric and non-electric vehicles, serving major original equipment manufacturers (OEMs) in India, Europe, and the **United States.

In Conclusion, The Indian stock markets are currently facing significant downward pressure, with both the Sensex and Nifty struggling due to sector wide sell offs. While certain stocks like M&M and ITC managed to post gains, most sectors, including energy and metals, faced significant selling. Investors should remain cautious, as the Gift Nifty indicates a potential continuation of the bearish trend.