US Stocks: Wall Street slips as growth stocks struggle amid rising bond yields Wall Street’s main indexes slipped in choppy trading on Thursday as technology and growth stocks struggled for direction amid rising bond yields and weaker risk appetite on concerns around surging inflation and aggressive interest rate hikes. Nine of the 11 major S&P sectors declined in morning trade, with energy and materials among the biggest losers. Defensive consumer staples sector was the top gainer, up 0.5%. Investors fear a hot reading on inflation could keep the U.S. Federal Reserve on its path to raise interest rates aggressively against the backdrop of a volatile stock market, strong consumer spending and tight labor market. “We’re not going to see the market enjoy a robust recovery until there is a sense the inflationary pressures are easing as that will suggest the Fed has been moving in the right direction and the weakening of the economy has not been drastic,” said Quincy Krosby, chief equity strategist at LPL Financial.“The market has been in a tight trading range. The volume in either scenario, buying or selling, has been weak and that is indicative of a market without commitment.” The U.S. central bank has raised its short-term interest rate by three-quarters of a percentage point this year and intends to keep at it with 50 basis points increases at its meeting next week and again in July. At 10:08 a.m. ET, the Dow Jones Industrial Average was down 60.73 points, or 0.18%, at 32,850.17, the S&P 500 was down 9.04 points, or 0.22%, at 4,106.73, and the Nasdaq Composite was down 30.00 points, or 0.25%, at 12,056.27. Tesla Inc rose 3.9% as the electric automaker sold 32,165 China-made vehicles last month, up sharply from 1,152 in April. Brokerage UBS upgraded the stock to “buy” and raised its profit estimates for the next three years. Alibaba Group slipped 1.6% after its affiliate Ant Group said it has no plan to initiate an initial public offering.Reuters reported China’s central leadership has given a tentative green light to Jack Ma’s Ant Group to revive its initial public offering in Shanghai and Hong Kong. The CBOE volatility index, also known as Wall Street’s fear gauge, rose after two straight days of fall and was last trading at 24.63 points.Declining issues outnumbered advancers for a 3.30-to-1 ratio on the NYSE and for a 2.73-to-1 ratio on the Nasdaq. The S&P index recorded three new 52-week highs and 30 new lows, while the Nasdaq recorded 11 new highs and 56 new lows.
The Japanese pharma major is also filing a plea before the Delhi HC seeking appointment of forensic auditors to analyse transactions involving IHH, Fortis Healthcare and RHT, Singapore, as directed by the HC on October 18.
The development is likely to create legal hurdles and delay the proposed open offer as IHH had recently told FE that it could only go ahead if Sebi agreed with its legal interpretation that the SC’s September 22 order has lifted all such restraints.
IHH managing director and CEO Kelvin Loh told FE on November 9 that the company would like to go ahead with the open offer “as soon as possible” as there has already been a delay of four years. Ravi Rajagopal, chairman of Fortis Healthcare, had added that their legal counsel has advised that the company can go ahead with the open offer as the SC order has disposed of various appeals, including the suo motu contempt. “We have represented to the Sebi and the matter is with them,” Rajagopal had said.
However, legal observers told FE that the matter is not that straightforward and simple as the Delhi HC has to take the final call on the matter of open offer as well as whether a forensic audit has to be done in the share sale which was executed in 2018.
Also Read: IHH to float open offer for Fortis if Sebi concurs with our legal view: MD & CEO
Loh and Rajagopal had said the possibility that the matter may take a different turn when it comes up in Delhi HC cannot be ruled out.
IHH had in July 2018 acquired a 31% stake in Fortis Healthcare for Rs 4,000 crore through the bidding route. It had also earmarked Rs 3,000 crore to make an open offer for an additional 26% to the public shareholders as required under the law.
Daiichi has written to Sebi that the SC in its September 22 order had asked the HC to consider ordering a forensic audit into the dilution of FHL shareholding, repeated violation of undertakings and assurance by former FHL promoters — Malvinder and Shivinder Singh — and the transaction between FHL, IHH and the clandestine transfer of Rs 4,666 crore to RHT Singapore.
Daiichi is “severely prejudiced” with IHH’s clandestine attempt to subvert the status quo order directed by the SC on December 14, 2018, and September 22 with respect to the conduct of forensic audit and the pending proceedings before the HC by purportedly consulting regulatory authorities, including Sebi, on the proposed FHL-IHH transaction. It has reiterated that the FHL-IHH transaction was currently sub-judice before the HC where FHL is also a party, its solicitors, P&A Law Offices, have said in the letter.
“We further state that any such attempt by FHL and/or IHH to proceed with the FHH-IHH transaction would be in direct contravention of the HC and SC orders,” the letter sent by the law firm has stated. Daiichi Sankyo is pursuing the enforcement of Rs 3,500-crore arbitration award against the Singh brothers pronounced by a Singapore tribunal for concealing information when they sold Ranbaxy Laboratories to it for $4.6 billion in 2008. The apex court had in 2018 put on hold the sale of Fortis Healthcare to IHH on a contempt plea filed by the Japanese drugmaker against the Singh brothers.