Indian stocks demonstrated a remarkable turnaround in today's trading session, recovering from a sluggish start and breaking a three-day losing streak. This recovery, particularly in the second half, was fueled by strong performances in banking and metal stocks, helping the benchmark indices—Nifty 50 and Sensex—end the day in positive territory.

Nifty 50 and Sensex Break Losing Streak

After three consecutive days of losses, the Nifty 50 index saw a notable gain of 0.42%, closing at 24,854 points. Earlier in the day, the index had plunged below 24,600 points, indicating a weak start. However, the banking and auto sectors staged a strong recovery, pulling the index back into the green.

Similarly, the Sensex ended the session with a gain of 0.27%, closing at 81,227 points. This recovery was seen despite a weak opening, with investors showing renewed interest in key sectors such as banking, metals, and energy.

Sectoral Performance: Banks and Metals Shine

The recovery was led by the Nifty Bank Index, which gained 1.57%, closing at 52,094 points. Banking stocks demonstrated significant strength in today’s session, with top performers from the sector contributing to the broader market's rebound. The recovery in banking stocks comes at a critical juncture, as the market had faced pressure over the past few days due to global economic uncertainties and domestic inflation concerns.

Metal stocks also staged a strong comeback, with the Nifty Metal Index posting a 1.57% gain, closing at 9,753 points. The recovery in this sector was primarily driven by positive economic data from China, which boosted investor confidence in the global metals market. China's recent funding initiatives to support its economy provided a major boost to Indian metal stocks, which had been underperforming for four consecutive days.

Broader Market Performance: Nifty Midcap and Smallcap

In the broader market, the Nifty Midcap 100 Index saw a 0.31% gain, closing at 58,649 points. Midcap stocks continued to show resilience despite the volatility seen in large-cap stocks over the past week. The Nifty Smallcap 100 Index also managed a modest gain of 0.06%, ending the session at 19,077 points. Smallcap stocks have been under pressure recently, but today’s slight recovery indicates a potential shift in market sentiment.

IT and FMCG Stocks Underperform

While banking and metals saw gains, the IT sector faced significant losses. The Nifty IT Index closed with a decline of 1.47%, finishing at 42,106 points. This was largely due to disappointing earnings reports from companies such as LTIMindtree and Infosys.

LTIMindtree saw a steep decline of 6.3%, closing at ₹5,991 per share, following its Q2FY25 earnings report. Infosys also faced a sharp decline of 4.5%, closing at ₹1,879 per share. These losses dragged down the overall IT index, as nearly 70% of Nifty IT constituents ended the session in the red.

In addition to the IT sector, FMCG stocks also underperformed, with the Nifty FMCG Index dropping by 0.51%, closing at 61,042 points. This marked the lowest point for the index since early August, as FMCG stocks have been facing headwinds due to rising input costs and slowing consumer demand. The FMCG index is now down 8.10% from its recent high of 66,427 points, signaling a broader weakness in the sector.

Major Losers: Manappuram Finance and Elecon Engineering

Among the major losers in today’s session were Manappuram Finance and Elecon Engineering. Shares of Manappuram Finance tumbled after the Reserve Bank of India (RBI) imposed restrictions on its subsidiary, Asirvad Micro Finance, preventing the company from sanctioning or disbursing loans starting from October 21, 2024. This news led to a significant sell-off in Manappuram Finance, with the stock plummeting by 12.8%.

Elecon Engineering also saw a sharp decline, with its stock dropping by 10% following a weaker-than-expected earnings report for Q2FY25. Both Manappuram Finance and Elecon Engineering were among the top losers in today’s trading session, reflecting broader concerns about the regulatory environment and operational challenges in these companies.

Global Cues Impacting Indian Markets

The positive sentiment in today's session was partly attributed to global factors. Improved economic data from China—particularly in the metals sector—helped boost investor confidence. Additionally, recent moves by global central banks, including the US Federal Reserve, have eased concerns about aggressive rate hikes, which had weighed heavily on global equity markets in recent weeks.

Stock-Specific Updates

Aether Industries Reports Revenue Growth but Decline in Profit
Aether Industries posted a 21.1% year-on-year (YoY) increase in revenue to Rs 198.8 crore for Q2FY25, driven by strong performance in its large-scale manufacturing segment. However, its net profit fell by 5.1% YoY, reaching Rs 348 crore due to lower inventory sales. Notably, this stock appears in a screener where mutual funds have increased their shareholding over the past quarter.

Hindustan Zinc's Net Profit Rises by 34.6%
Hindustan Zinc reported a 34.6% YoY increase in net profit, reaching Rs 2,327 crore in Q2FY25. The company’s revenue also grew by 20.9% YoY to Rs 8,004 crore, largely driven by higher sales in the zinc, lead, and silver metals segment. It is featured in a screener highlighting stocks with consistent revenue growth over the last three quarters.

Emkay Upgrades Mahindra & Mahindra Financial Services to 'Buy'
Emkay Global Financial Services upgraded Mahindra & Mahindra Financial Services from 'Sell' to 'Buy,' with a new target price of Rs 360 per share, indicating a potential upside of 23.6%. The brokerage firm is optimistic about the company’s diversified and profitable growth strategy and expects its net profit to grow at a CAGR of 31.15% between FY25 and FY27.

Havells India Expects Margin Improvements in H2FY25
Anil Rai Gupta, Chief Managing Director of Havells India, anticipates core margin improvements in H2FY25, expecting margins to reach 13% excluding Lloyd. He also noted a positive start to the festive season and highlighted that a new cables manufacturing facility in Tumkur began operations last month, with additional Rs 450 crore expansion plans in the pipeline.

Elecon Engineering Reports Mixed Results
Elecon Engineering saw its net profit fall by 1% YoY to Rs 87.7 crore in Q2FY25, primarily due to higher raw material and employee expenses. Despite this, the company’s revenue grew by 4.4% YoY to Rs 519.5 crore, benefiting from improvements in the material handling equipment segment. This stock is listed in a screener showing sales by superstar investors.

Tata Communications Reports Steady Growth
Tata Communications experienced a 3% YoY increase in net profit to Rs 227.2 crore in Q2FY25, with revenue climbing by 18.4% YoY to Rs 5,767.4 crore. This growth was driven by a 21% YoY surge in data revenue. The company appears in a screener where mutual funds have recently increased their shareholding.

Hindware Home Innovation Approves Rights Issue
The board of Hindware Home Innovation approved a rights issue of 1.1 crore shares worth Rs 250 crore at an issue price of Rs 220 per share. The record date for the rights issue is set for October 25, 2024.

MSCI India Standard Index Likely to Include New Companies
According to JM Financial, companies such as Oberoi Realty, Adani Energy, Voltas, and Alkem Laboratories are expected to be included in the MSCI India Standard Index as part of its rebalancing. These changes are set to be effective from November 26, 2024.

Ajmera Realty Surges on Preferential Issue Approval
Ajmera Realty saw its stock rise after the company’s board approved a preferential issue of 31.6 lakh shares worth Rs 225 crore at an issue price of Rs 711 per share. This move aims to strengthen the company’s capital structure and support future growth initiatives.

JSW Energy Subsidiaries Sign Solar-Wind Hybrid PPAs
JSW Renew Energy Six and JSW Renew Energy Thirty, step-down subsidiaries of JSW Energy, signed Power Purchase Agreements (PPAs) with the Maharashtra State Electricity Distribution Company (MSEDCL) for Solar-Wind Hybrid projects with a total capacity of 1,200 MW. These agreements are for a 25-year term with a tariff of Rs 3.6 per kWh.

PolyCab India Misses Profit Estimates Despite Revenue Growth
PolyCab India posted a 3.3% YoY increase in net profit to Rs 439.8 crore, missing analysts' expectations by 1.7%. However, revenue rose 31.1% YoY to Rs 5,574.6 crore, driven by improvements in the wires & cables and fast-moving electrical goods (FMEG) segments. The stock is flagged in a screener where promoters are decreasing their shareholding.

Indraprastha Gas and Mahanagar Gas Announce Gas Allocation Cuts
Both Indraprastha Gas and Mahanagar Gas reported a 20% ad hoc reduction in the allocation of cheap APM gas for the CNG segment, effective from October 16, 2024. JM Financial anticipates that this cut will lead to a CNG price hike of Rs 3.5-5/kg, as the cheaper $6.5 per mmBtu gas will be replaced by more expensive alternatives costing $10-14 per mmBtu.

Tata Chemicals Sees Sharp Profit Decline in Q2FY25
Tata Chemicals reported a 54.7% YoY drop in net profit to Rs 194 crore for Q2FY25, citing higher employee benefits and freight & forwarding expenses. Revenue remained largely flat at Rs 3,999 crore, beating analysts' estimates by 2.1%. The company is featured in a screener highlighting underperforming stocks in their industry for the past quarter.

Mazagon Dock Shipbuilders Considers Interim Dividend and Stock Split
The board of Mazagon Dock Shipbuilders has scheduled a meeting on October 22, 2024, to consider the declaration of an interim dividend and a sub-division/split of equity shares. The company has set October 30, 2024, as the record date for the dividend.

Godavari Biorefineries Sets IPO Price Band
Godavari Biorefineries has set its IPO price band at Rs 334-352 per share, with a total issue size of Rs 554.9 crore. The IPO consists of a fresh issue worth Rs 325 crore and an offer for sale amounting to Rs 229.9 crore. The issue opens on October 23, 2024.

Ceat's Profit Declines Amid Higher Raw Material Costs
Ceat reported a 41.5% YoY decline in net profit to Rs 121.5 crore in Q2FY25, driven by higher raw material costs. However, revenue grew 8.2% YoY to Rs 3,304.5 crore, narrowly beating analysts' estimates by 0.6%. The company is highlighted in a screener showcasing improving book value over the past two years.

Zomato to Discuss Fundraising Plan
The board of Zomato is scheduled to meet on October 22, 2024, to consider a proposal for raising funds via a qualified institutional placement (QIP) of equity shares. The company will also announce its Q2FY25 earnings during the meeting.

Axis Bank Reports Strong Profit Growth
Axis Bank posted an 18% YoY increase in net profit to Rs 6,917.6 crore for Q2FY25, while revenue grew 17.3% YoY to Rs 37,141.7 crore. The growth was driven by improvements across its treasury, corporate, and retail banking segments. Additionally, the bank’s asset quality improved as gross and net NPAs contracted during the quarter.

Manappuram Finance Plunges Amid RBI Restrictions
Manappuram Finance saw its stock drop by over 12% after the Reserve Bank of India (RBI) imposed restrictions on its subsidiary, Asirvad MFI, from sanctioning or disbursing loans, effective October 21, 2024. Several brokerages have downgraded the stock following this development.

LTIMindtree Posts Profit and Revenue Growth
LTIMindtree saw its net profit grow by 10.3% quarter-on-quarter (QoQ) to Rs 1,251 crore, while revenue increased by 3.9% QoQ to Rs 9,731.8 crore. The company attributed this growth to improvements in sectors such as banking, financial services & insurance (BFSI), technology, and media.

Diamond Power Infrastructure Wins Major Order
Diamond Power Infrastructure secured an order worth Rs 99.9 crore from Reverence Infrastructure India for the supply of 11KV aluminum cables under the Revamped Distribution Sector Scheme (RDSS).

Wipro Reports Steady Growth in Q2FY25
Wipro posted a 6.8% QoQ increase in net profit to Rs 3,208.8 crore, driven by a reduction in sub-contracting & technical and other expenses. Revenue rose by 2.5% QoQ to Rs 23,263.5 crore, supported by growth in the Americas, Europe, and APMEA segments.

Infosys Falls Short of Analyst Expectations
Infosys reported a 2.2% QoQ growth in net profit to Rs 6,506 crore, missing analysts' estimates by 4.4%. Revenue for the quarter increased by 3.8% QoQ to Rs 41,698 crore, driven by improvements in sectors like financial services, retail, and communication.

Outlook for the Upcoming Sessions

With the banking and metal sectors showing signs of recovery, market sentiment appears to be stabilizing after a volatile week. However, sectors such as IT and FMCG may continue to face pressure in the short term, given the headwinds of earnings disappointments and rising input costs.

Looking ahead, market participants will be closely monitoring corporate earnings, macroeconomic data, and any updates from global central banks. While today’s session marked a positive shift, the Indian stock market may still face challenges as it navigates through the remaining weeks of October.

Today’s stock market performance underscores the importance of sectoral dynamics, with banks and metals leading the recovery, while IT and FMCG stocks lagged behind. Investors should remain cautious, but opportunities exist in sectors showing resilience, particularly banking and metals, as the broader market attempts to regain momentum.

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