Monsoon joy for agri-input stocks, Markets end weaker, Bears prevail

Hey there, fam! Have you heard about the inverted waterfall? There’s a viral video that shows strong winds forcing a waterfall to swirl upwards! Wish there were some winds that could drive the markets higher.

Despite a strong opening, markets extended their losing streak to the third straight day amid weak global cues. In all, 27 of the Nifty50 stocks closed in the green.  US inflation accelerated to 9.1%, exceeding forecasts. Among the Nifty sectoral indices, Pharma (+1.3%) and FMCG (+0.9%) saw the most gains, while Oil and Gas (-1.3%) and Financial Service (-0.9%) were the top losers.

NIFTY50 15,966  91 (-0.5%) SENSEX 53,514  372 (-0.6%)

What's UP  STOCK TODAY'S CHANGE Divi’s Lab 3,784  96 (+2.6%) JSW Steel 587  13 (+2.2%) HUL 2,496  47 (+1.9%)

What's Down  STOCK TODAY'S CHANGE IndusInd Bank 820  26 (-3.1%) HDFC 2,170  56 (-2.5%) Bharti Airtel 646  16 (-2.4%)

What’s trending?

Steelmakers gain as iron ore prices tumble TATASTEEL (NSE): 903  1.6 (+0.1%), JINDALSTEL (NSE): 354  5.8 (+1.6%) International iron ore prices plunged to a seven-month low nearing $100 per tonne on Wednesday. The fall is due to concerns that China may impose Covid restrictions, which could impact construction activity. State-owned iron-ore miner NMDC on Tuesday cut prices of lump ore and fines by ₹500 per tonne due to low demand from the steel industry. Meanwhile, shares of steelmakers like Tata Steel and Jindal Steel closed higher as they stand to benefit from a drop in iron ore prices.   Mindtree delivers strong results MINDTREE (NSE): 2,911  57 (+2.0%) International iron ore prices plunged to a seven-month low nearing $100 per tonne on Wednesday. The fall is due to concerns that China may impose Covid restrictions, which could impact construction activity. State-owned iron-ore miner NMDC on Tuesday cut prices of lump ore and fines by ₹500 per tonne due to low demand from the steel industry. Meanwhile, shares of steelmakers like Tata Steel and Jindal Steel closed higher as they stand to benefit from a drop in iron ore prices.   Paper stocks rise on import curbs  JKPAPER (NSE): 305  7.4 (+2.4%), WSTCSTPAPR (NSE): 344  6.9 (+2.0%) Paper stocks were up on Wednesday as the government amended the import policy for key paper products. The import will remain free but will be subject to registration under the Paper Import Monitoring System (PIMS), which will come into effect on 1 October. The PIMS is being introduced to curb imports of paper in some categories, and promote the 'Make in India' initiative.       Delta Corp hits jackpot in Q1  DELTACORP (NSE): 179  0.2 (+0.1%) Shares of casino and hotel operator Delta Corp rose in early trade after it reported strong Q1 results. Revenues rose 230% year-on-year to ₹250 crore, on a low base. Meanwhile, the company reported a net profit of ₹57 crore, compared to a loss of ₹28.9 crore in the same period a year ago.  Real estate gets PE boost  DLF (NSE): 347  0.3 (+0.1%) According to an industry report, the real estate sector received ₹5,600 crore worth of private equity (PE) investment in Q2. The majority investment flowed into commercial office assets. The report also said that factors like geopolitical uncertainties, increasing prices of commodities and inflation have not impacted the real estate investment market.

In focus Monsoon boosts agri-inputs sector

Heavy rains are lashing some parts of the country, and this has given a big boost to the agri-input sector. Companies such as UPL, PI Industries, Sumitomo and Escorts Kubota have risen in the range of 7-16% in July alone. But what's causing these stocks to germinate? Let’s dig in.  Monsoons had a soft start in June, with a rainfall deficit of 8% across the country. This had led to a significant shortfall in sowing of major Kharif crops like pulses and oilseeds. However, the monsoon recovery in July saw a pickup in sowing activity on a weekly basis and a rise in demand for agrochemicals. A good monsoon and higher acreage (land under agricultural use) result in strong crop production. This, in turn, will lead to improved sales volumes and revenues for companies that make agri-inputs, like fertilisers and insecticides. A bumper crop yield will also bring cheer to farm equipment makers like M&M and Escorts Kubota. Furthermore, the price hikes carried out by companies due to input cost pressures, along with strong inventory placement ahead of the Kharif season is expected to give a revenue boost. All in all, the agri-input sector is making hay, while the sun doesn’t shine.