Market breadth turns negative from positive

The benchmark indices hit an intraday low during afternoon trade. The Nifty index held its 15,750 level. European markets opened lower on the back of extreme weather and the spread of COVID-19 across the continent.

At 13:20 IST, the barometer index, the S&P BSE Sensex, dropped 254.39 points or 0.48% at 52,597.88. The Nifty 50 index lost 71.30 points or 0.45% at 15,753.15.

Reliance Industries (down 1.39%), Dr Reddy`s Laboratories (down 7.60%) and Axis Bank (down 2.86%) dragged the market.

Broader markets suffered minor losses. The S&P BSE Mid-Cap index slipped 0.49%. The S&P BSE Small-Cap index skid 0.14%.

Sellers outnumbered the buyers. On the BSE, 1,499 shares rose and 1,681 shares fell. A total of 125 shares were unchanged.

Foreign portfolio investors (FPIs) sold shares worth Rs 2,376.79 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 1,551.27 crore in the Indian equity market on 26 July 2021, provisional data showed.

COVID-19 Update:

Total COVID-19 confirmed cases worldwide stood at 19,47,23,719 with 41,67,658 deaths. India reported 3,98,100 active cases of COVID-19 infection and 4,21,382 deaths while 3,06,21,469 patients have been discharged, according to the data from the Ministry of Health and Family Welfare, Government of India.

India on Tuesday reported 29,689 new cases, the number falling under 30,000 for the first time since 17 March 2021. The country`s active caseload too has dropped, and now stands under 4 lakh. Even as the mass vaccination programme progresses, there are concerns about the private sector not administering enough doses. Despite being allotted 25% vaccines, private firms have vaccinated only 7% people so far.

Economy:

The second wave of COVID-19 may have a more lasting damage on the Indian economy and exports will once again be the foundation for recovery, Moody`s Analytics said on Monday.

The Delta variant of COVID-19 is among factors now adversely affecting economies of the Asia-Pacific (APAC) region, but the economic hit from the current round of movement restrictions in the region will not be as severe as the recessions in the second quarter of last year.

In India, where exports make up relatively small shares of the economy, high commodity prices have boosted the value of exports. This is one factor that helped reinvigorate India after its first devastating wave of COVID-19.

Gainers & Losers:

Hindalco Industries (up 3.69%), Bajaj Finserv (up 1.92%), Nestle India (up 1.85%), SBI Life Insurance Company (up 1.54%) and Tata Steel (up 1.39%) were major gainers in Nifty 50 index.

Dr Reddy`s Laboratories (down 7.60%), Cipla (up 2.94%), Axis Bank (down 2.86%), Sun Pharmaceutical Industries (down 2.52%) and Adani Ports & Special Economic Zone (APSEZ) (down 2.50%) were major losers in Nifty 50 index.

Nifty Result Today:

IndusInd Bank (down 0.38%) will announce its quarterly result today.

Earnings Impact:

Tata Motors skid 0.96%. The auto major`s consolidated net loss contracted to Rs 4,450.92 crore in Q1 June 2021 as compared to a net loss of Rs 8,437.99 crore in Q1 June 2020. Total revenue from operations soared 107.63% to Rs 66,406.45 crore in Q1 FY22 from Rs 31,983.06 crore in Q1 FY21. EBITDA margins improved by 570 bps to 8.3% in Q1 FY22 over Q1 FY21.

The company reported a pre-tax loss of Rs 2,578.64 crore in Q1 FY22 as against a pre-tax loss of Rs 6,183.73 crore in Q1 FY21. Finance costs increased by Rs 326 crore to Rs 2,203 crore during Q1 FY22 as compared to the prior year due to higher gross borrowings as compared to Q1 FY21. Free cash flow (automotive) in the quarter was negative Rs 18,200 crore (as compared with negative Rs 19,400 crore in Q1 FY21) of which Rs 16,500 crore was due to working capital unwind.

GlaxoSmithKline Pharmaceuticals declined 3.17%. The pharmaceutical major`s consolidated net profit grew 9.2% to Rs 121.08 crore on a 21.8% jump in net sales to Rs 789.99 crore in Q1 June 2021 (Q1 FY22) over Q1 June 2020 (Q1 FY21). Consolidated profit before tax surged 10.6% to Rs 164.90 crore in Q1 FY22 as against Rs 149.14 crore in Q1 FY21.

Global Markets:

European markets tumbled across the board on Tuesday, 27 July 2021 as investors continued to monitor corporate earnings, along with extreme weather and the spread of COVID-19 across the continent.

Asian stocks traded mixed even as several major Chinese tech stocks in Hong Kong remained under pressure following a Monday tumble. Investors continued to assess the steep losses incurred in Chinese stocks sparked by Beijing`s sweeping regulatory overhaul.

All three major US stock indexes eked out record closing highs for a second straight session on Monday as investors were optimistic heading into a slew of earnings from heavyweight technology and internet names this week, while caution ahead of a Federal Reserve policy meeting kept the market in check.

Investors will be watching the Federal Reserve`s two-day policy meeting, beginning Tuesday. The Federal Open Market Committee and the Board of Governors are expected to issue a statement on the stance of monetary policy Wednesday. On Thursday, the Commerce Department will report second-quarter gross domestic product data.

Meanwhile, on the data front, sales of new U.S. single-family homes dropped unexpectedly in June, falling 6.6% to a seasonally adjusted annual rate of 6,76,000 units, the Commerce Department said on Monday.

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