May 30th 2024 Stock Market analysis

‍Bears Dominate as Nifty Closes Below 22,500 on F&O Expiry; Sensex Drops 617 Points

Bears tightened their grip on Dalal Street on May 30 as benchmark indices extended their losing streak to the fifth consecutive session, with the Nifty closing below 22,500 on May's F&O expiry day.

The Sensex closed down 617.30 points, or 0.83 percent, at 73,885.60, while the Nifty dropped 216 points, or 0.95 percent, to 22,488.70.

The Nifty50 index ended 0.4 percent lower for the May series.

After a weak start, the market's losses deepened throughout the day, dragging the Nifty close to 22,400 amid broad-based selling, except in banking stocks. However, some intraday losses were mitigated by a final-hour buying surge.

The biggest Nifty losers were Tata Steel, Tech Mahindra, Power Grid Corporation, Wipro, and Titan Company. Gainers included ICICI Bank, Axis Bank, HDFC Bank, SBI, and Kotak Mahindra Bank. Among sectors, the Bank index rose by 0.5 percent, while Auto, FMCG, Metal, IT, and Healthcare indices fell by 1-2 percent.

Both the BSE midcap and smallcap indices declined by 1.2 percent.

More than 100 stocks, including Aditya Birla Fashion, BF Utilities, Coromandel International, EID Parry, Emami, Heritage Foods, Indian Bank, Jupiter Wagons, KNR Construction, Mazagon Dock, Samvardhana Motherson, Saregama India, Suprajit Engineering, and UNO Minda, touched their 52-week highs on the BSE.

‍Paytm Stock Surges 5% for Second Consecutive Day: Key Drivers Behind the Rally

Shares of Paytm hit a 5 percent upper circuit for the second consecutive session on May 30, driven by reports suggesting that billionaire Gautam Adani is considering acquiring a stake in One97 Communications, Paytm's parent company. However, Paytm later clarified that these reports are purely speculative and that no discussions are taking place.

"We hereby clarify that the aforementioned news item is speculative, and the company is not engaged in any discussions in this regard. We have always made and will continue to make disclosures in compliance with our obligations under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015," Paytm stated officially.

The Adani Group also refuted the claims, stating, "We categorically deny this baseless speculation; it is totally false and untrue."

Earlier this year, on January 31, the Reserve Bank of India imposed business restrictions on Paytm Payments Bank (PPBL) due to repeated regulatory violations. As a result, PPBL was prohibited from accepting new deposits and conducting credit transactions after February 29. This led to Paytm's stock plunging to a 52-week low of Rs 310 on May 9.

The recent speculation regarding a potential partnership with the Adani Group comes at a critical time for Paytm, which recently reported weak financial results for the quarter ending March 2024. Paytm's net loss widened to Rs 550 crore in Q4FY24, a 3.2-fold increase compared to Q4FY23, due to the impact of the RBI's restrictions on PPBL. Additionally, its revenue from operations decreased by 2.9 percent year-on-year to Rs 2,267 crore.

Currently, founder Vijay Shekhar Sharma holds nearly a 19 percent stake in Paytm, valued at Rs 4,218 crore at the previous session's closing price of Rs 342. Sharma owns 9 percent directly and an additional 10 percent indirectly through Resilient Asset Management.

As of 2:23 pm, Paytm shares were trading 5 percent higher at Rs 377.40 on the National Stock Exchange (NSE), with the fintech firm's market cap climbing to Rs 24,001 crore. YES Securities recently revised its price target for the stock to Rs 450, valuing Paytm at 2.8 times its FY26 price-to-sales ratio.