Sensex trades lower, Nifty below 17,100; telecom, metal stocks under pressure

The Nikkei plunged 1.7% while the Shanghai Composite shed 0.1%. The Hang Seng reversed losses and is up 0.1%.

In US stock markets, Wall Street indices ended sharply lower on Tuesday, with the Nasdaq closing at its lowest since December 2020 as investors worried about slowing global growth and a more aggressive Federal Reserve.

The Dow Jones tumbled 2.4% while the Nasdaq slumped 4%.

Back home, Indian share markets are trading on a negative note today tracking weak global markets.

Market participants are tracking shares of HUL, Bajaj Auto, and HDFC AMC as these companies will announce their March quarter results today.

Meanwhile, the ₹15 bn initial public offering (IPO) of Rainbow Children’s Medicare opened for subscription today.

At present, the BSE Sensex is trading down by 344 points. Meanwhile, the NSE Nifty is trading lower by 117 points.

Reliance & Kotak Bank are among thetop gainers today. Bajaj Finance and Bajaj Finserv, on the other hand, are among thetop losers today.

The BSE Mid Cap index is down 1% while the BSE Small Cap index fell 1.1%.

Sectoral indices are trading in red with stocks in the metal sector and telecom sector witnessing most of the selling.

Shares of Page Industries and Adani Power hit their 52-week highs today.

The rupee is trading at 76.64 against theUS$.

Gold prices are trading down by 0.3% at ₹51,447 per 10 grams.

Meanwhile, silver prices are trading down by 0.2% at ₹64,867 per kg.

Crude oil prices rose today, extending gains from the previous session after China’s central bank said it would support its economy.

In news from the breweries and distilleries space, United Breweries is among the top buzzing stocks today.

Beer maker United Breweries on Tuesday reported a 67.9% increase in its consolidated net profit to ₹1.6 bn for the fourth quarter ended March 2022, led by a volume-based growth.

The company, which is controlled by Dutch multinational company Heineken NV, had posted a net profit of ₹1 bn during the January-March quarter of the previous fiscal.

Revenues were marginally up at ₹36.6 bn.

In a statement, the company said,

The fourth quarter witnessed robust year-on-year and sequential growth (volume) of 7% and 14%, respectively.

The commodity cost picture remains challenging and volatile, and the company is in the process of securing price increases in combination with continued cost measures to mitigate this impact.

The growth was mixed during the quarter with January being muted due to the impact of the Omicron variant, while March showed a promising start of the peak season, the company added.

For full year ended March 2022, the company’s consolidated net profit was up over three-fold to ₹3.7 bn.

United Breweries share price is currently trading down by 1%.

Moving on to news from the electric vehicles (EV) space, union minister Nitin Gadkari on Tuesday urged companies to take advance action to recall all defective vehicles, even as he said there is some problem with EV batteries when the temperature rises in the months of March, April and May.

The above developments come following several incidents of electric two-wheelers catching fire in recent days.

The Road Transport and Highways Minister also acknowledged that the country’s EV industry has just started and emphasised that the government does not want to put up a hurdle.

The road transport and highways minister noted that the government wants to make EVs popular.

We understand that the EV industry has just started. We don’t want to put a hurdle. But safety is the highest priority for the government and there can be no compromise with human lives.

Last week, Gadkari had said that the companies found negligent will be penalised and a recall of all defective vehicles will be ordered after receiving the report of an expert panel that has been formed to enquire into the matter.

We will keep you updated on the latest developments from this space. Stay tuned.

Speaking of EVs, have a look at the chart below which shows the massive opportunity in the two-wheeler EVs.

View Full Image

Here’s what lead Smallcap Analyst at Equitymaster, Richa Agarwal wrote about this in one of the editions of Profit Hunter:

In the last five years, two-wheeler sales in India were around 2 crore units per year. Now the sector is cyclical and has been in the downturn for some time. So let’s consider a moderate 5% growth for the next 10 years.

By 2030, we are looking at 2-wheeler sales of 3 crore units. Even if one third of this is EV sales, that’s 1 crore electric 2-wheelers per year.

In the last 2 years, average electric 2-wheeler sales were 1.5 lakh units. From 1.5 lakh to 1 crore, that’s a 66x opportunity in 2-wheeler EVs.

This is an annual growth rate of 52% over next 10 years. It’s an almost vertical growth opportunity.

As per Richa, this is like a gold rush. But like in any gold rush, the winners will just be a few.

(This article is syndicated from Equitymaster.com)