Market Watch: Gift Nifty Slips, SpiceJet Settles with ELFC, and Ashish Kacholia Reduces Stake in Sky Gold

The Indian equity market experienced a mixed performance on Tuesday. Despite reaching fresh all-time highs earlier in the afternoon, the gains were short lived, and the indices eventually closed in the negative territory. By the end of the trading session, the BSE Sensex had dropped 15 points, while the NSE Nifty managed a marginal increase, closing just 1 point higher.

Among the top performing stocks, Tata Steel, Hindalco, and Tech Mahindra stood out as key gainers, reflecting strong investor interest. On the contrary, HUL, Grasim Industries, and Shriram Finance faced losses, making them some of the worst performers of the day.

As for midcap and smallcap stocks, the BSE MidCap index showed modest gains of 0.2%, while the BSE SmallCap index remained flat. Sector-wise, market performance was mixed. The power and metal sectors attracted buyers, contributing to an uptick in those areas, while the real estate and telecom sectors witnessed selling pressure, indicating bearish sentiment.

Turning to commodities, gold prices traded higher on the Multi Commodity Exchange (MCX). By the close of Indian market hours, gold for the most recent contract was up by 0.3%, valued at ₹74,519 per 10 grams.

Heading into Wednesday’s trading session, the outlook for the Indian stock market appeared bearish. At 8:15 AM today, the Gift Nifty, an indicator of the Indian market's opening sentiment, was down by 60 points, trading at 25,925, hinting at a negative start for the day.

Key Stocks to Watch Today

1. Power Grid Corporation– Power Grid shares saw a 2.3% uptick after the company was declared the successful bidder for establishing an inter-state transmission system. The stock is expected to remain in the spotlight today as investors react to this development.

2. Sapphire Foods – Shares of Sapphire Foods surged by more than 12% on 24 September, reaching a record high of ₹401 on the NSE, driven by high trading volumes. A large transaction of 8.5 lakh shares, amounting to 1.3% of the company’s equity, exchanged hands at ₹355 per share, translating into a ₹305 million deal.

SpiceJet Settles Legal Dispute with ELFC

In other corporate news, SpiceJet successfully resolved a long-standing legal battle with Engine Lease Finance Corporation (ELFC), marking a significant step in the airline’s ongoing efforts to stabilize its financial position. ELFC had originally claimed $16.7 million from SpiceJet, but the two parties reached a mutually agreeable settlement for a lower, undisclosed amount.

This resolution comes on the heels of a Qualified Institutional Placement (QIP) by SpiceJet, which was oversubscribed by institutional investors, including global giants such as Goldman Sachs and Societe Generale. The airline plans to use the raised funds to expand its operations, settle outstanding liabilities, and unground 28 aircraft that had been sidelined due to financial constraints. This settlement is part of SpiceJet’s broader strategy to streamline operations, revive its fleet, and bolster its exclusive access to key regional and international destinations.

Ashish Kacholia Reduces Stake in Sky Gold

Renowned investor Ashish Kacholia made headlines with his decision to trim his stake in Sky Gold, a company specializing in the design and manufacturing of 22-karat gold jewelry. On 23 September 2024, Kacholia sold 76,720 shares of Sky Gold, representing a 0.6% stake in the company, at an average price of ₹2,602.93 per share. The total value of this transaction was approximately ₹199.7 million.

At the close of the June 2024 quarter, Kacholia held a 2.6% stake in Sky Gold. While the exact reasons for his stake reduction remain unclear, speculation suggests that profit-booking could be a contributing factor, given the stock’s impressive performance this year. Sky Gold's stock has surged by nearly 170% in 2024, with a 75% jump in the last three months alone.

The company is also pursuing ambitious growth targets, including expanding its corporate business to 100% over the next three years. A potential collaboration with Tanishq, one of India’s largest jewelry retailers, is also in the works, with all product meetings having been completed, and final confirmation from Tanishq eagerly awaited.

Metal Stocks Rally on China's Economic Stimulus

Metal stocks have been a major focus in recent trading sessions, driven by positive developments in China. On 24 September, metal companies saw their share prices rise by up to 5%, following announcements from the People’s Bank of China (PBOC) aimed at stimulating the country’s struggling economy. China has been grappling with a series of economic challenges, including a debt crisis in the property sector, high youth unemployment, and weakening consumer demand.

The PBOC’s new measures include plans to lower the reserve requirement ratio, reduce the policy interest rate, and cut market benchmark interest rates. Additionally, the central bank has proposed lowering interest rates on existing mortgages and standardizing down payment ratios to boost demand in the property sector, which traditionally contributes a significant portion of China’s GDP.

The announcement has sparked renewed optimism, particularly for metal stocks, as China is the world’s largest consumer of metals. In response to the news, the Nifty Metal index jumped by 1.5%, with stocks like NALCO and NMDC leading the charge, posting gains of up to 5%. Other metal stocks, including MOIL, SAIL, Tata Steel, Jindal Steel, Vedanta, Hindalco, JSW Steel, and Hindustan Zinc, also saw increases ranging from 1% to 3%.

China’s property sector has been under significant pressure since 2020, when government authorities imposed restrictions on credit access to developers in an attempt to control rising debt levels. This policy shift has led to financial struggles for major players such as China Evergrande and Country Garden, causing property prices to plummet and reducing demand for metals. However, the recent stimulus measures from the PBOC may signal the beginning of a recovery for the sector, which could, in turn, benefit metal companies reliant on China’s demand.

In conclusion, today’s market movements will likely be influenced by a combination of global economic developments and domestic corporate news, with metal stocks, Power Grid, SpiceJet, and Sky Gold among the top stocks to watch.