Barometers rise for 3rd day; Nifty settle above 17,480 mark; NSE VIX drops over 5%

The domestic stock market ended with strong gains on Tuesday, amid favorable global & domestic cues. Sliding crude oil prices and upside prospects to Q2 corporate earnings boosted investors sentiment. Investors also cheered the Reserve Bank of India`s commentry on inflation. The Nifty closed above the 17,480 mark. All the sectoral indices on the NSE ended higher. PSU banks shares surged. Meanwhile, healthcare and pharma shares lagged.

The S&P BSE Sensex surged 549.62 points or 0.94% to 58,960.60. The Nifty 50 index gained 175.15 points or 1.01% to 17,486.95. In three consecutive sessions, the Sensex has advanced 3.01% while the Nifty has risen by 2.78%.

SBI (up 3.45%), Adani Ports & SEZ (up 3.13%), Eicher Motors (up 3.05%), ITC (up 2.59%) and SBI Life Insurance Company (up 2.54%) were top Nifty gainers.

Meanwhile, the NSE`s India VIX, a gauge of the market`s expectation of volatility over the near term, dropped 5.23% to 17.45.

In the broader market, the S&P BSE Mid-Cap index gained 1.06% while the S&P BSE Small-Cap index rose 0.71%.

The market breadth was strong. On the BSE, 2,077 shares rose and 1,356 shares fell. A total of 123 shares were unchanged.

RBI Commentary:

In its monthly bulletin, the Reserve Bank of India (RBI) stated that retail inflation is set to ease from September highs, whereas economic activity is expected to expand.

In its article titled "State of the Economy", RBI stated that headline inflation is set to ease from its September high, albeit stubbornly. The fight against inflation will be dogged and prolonged, given the long and variable lags with which monetary policy operates. The expected easing in inflation would likely be driven by the food and beverages, which has undergone repeated shocks in the first half of the year.

The central bank added that the persistence of headline inflation above the mandated tolerance band of 2% to 6% for three consecutive quarters will also be triggering the mandated accountability processes. However, monetary policy remains focused on re-aligning inflation with the target.

"Robust credit growth and fortified corporate and bank balance sheets provide further strength to the economy. These factors will entrench India`s prospects as one of the fastest growing economies of the world," RBI stated.

Numbers to Track:

The yield on India`s 10-year benchmark federal paper declined to 7.427 as compared with 7.407 at close in the previous trading session.

In the foreign exchange market, the rupee was slightly lower against the dollar. The partially convertible rupee was hovering at 82.3050, compared with its close of 82.30 during the previous trading session.

MCX Gold futures for 5 December 2022 settlement shed 0.04% to Rs 50,452.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was up 0.27% to 112.34

The United States 10-year bond yield declined 0.01% to 4.015.

In the commodities market, Brent crude for December 2022 settlement rose 6 cents or 0.07% at $91.68 a barrel.

Global Markets:

The US Dow Jones futures were up 390 points, indicating a positive opening in the US stock market today.

Shares in Europe and Asia advanced on Tuesday after Wall Street`s rally overnight. The UK`s decision to reverse more of its unfunded tax cuts also aided global market sentiment.

Wall Street jumped to robust gains on Monday as solid earnings and a financial policy reversal in Britain fueled risk appetite.

Britain`s new finance minister Jeremy Hunt scrapped Prime Minister Liz Truss`s proposed tax cuts and reined in her energy subsidies, while Bank of America Corp posted consensus-beating third quarter results, having benefited from a spate of interest rate hikes from the Federal Reserve.

Buzzing Index:

The Nifty PSU Bank index jumped 3.97% to 3,172.05, extending its winning run for third session. The index advanced 8% in three trading sessions.

Indian Bank (up 5.43%), Punjab National Bank (up 5.42%), Canara Bank (up 5.29%), Union Bank of India (up 4.89%), State Bank of India (up 3.45%), Bank of Baroda (up 3.20%), Punjab & Sind Bank (up 2.33%), UCO Bank (up 3.02%), Bank of India (up 2.45%) and Indian Overseas Bank (up 1.45%) jumped.

Stocks in Spotlight:

Tata Coffee rose 1.02%. The company reported a consolidated net profit of Rs 147 crore in Q2 FY23, which is significantly higher as compared with a net profit of Rs 54 crore recorded in Q2 FY22. The sharp improvement in profitability was driven by improved performance of Plantation and Instant Coffee businesses and one-time exceptional income on disposal of a non-core/surplus property. Consolidated total income for the quarter higher at Rs 723 crore compared to Rs 554 crore for the corresponding quarter of the previous year, an increase of 30%, driven by higher realisations in all businesses of the company.

Can Fin Homes advanced 4.40% after the company`s net profit rose 14.6% to Rs 141.71 crore on 40.5% increase in total income to Rs 657.55 crore in Q2 FY23 over Q2 FY22.

Indowind Energy hit an upper circuit limit of 5% after the company`s consolidated net profit surged 656.86% to Rs 3.86 crore on 64.60% increase in net sales to Rs 14.60 crore in Q2 FY23 over Q2 FY22. The net profit surged 138.27% and net sales soared 88.63% in Q2 FY23 over Q1 FY23.

Suzlon Energy gained 3.89% after the company said it secured an order for developing a 48.3 MW wind power project for Adani Green Energy. Suzlon will install 23 units of their wind turbine generators (WTGs) with a Hybrid Lattice Tubular (HLT) tower and a rated capacity of 2.1 MW each. The project is located in Mandvi, Kutch Gujarat and is expected to be commissioned in 2023.

Tata Communications rallied 3.36% after the company reported 25.13% rise in consolidated net profit to Rs 532.29 crore on 6.15% increase in net sales to Rs 4,430.74 crore in Q2 FY23 over Q2 FY22. Consolidated EBITDA stood at Rs 1,130 crore in Q2 FY23, registering a growth of 4.9% quarter on quarter (QoQ) and a rise of 1.5% year on year (YoY). Margins improved to 25.5% in Q2 FY23, expanding by 50 basis points QoQ while declining by 120 basis points YoY.

Aster DM Healthcare advanced 3.20%. The company said that its retail arm Aster Pharmacy has entered into a long-term joint venture agreement with Al Hokair Holding Group to setup and operate pharmacies in the Kingdom of Saudi Arabia (KSA). Aster Pharmacy through this partnership aims to set-up and operate 250 plus stores over a period of 5 years and provide ease of access to pharmaceutical and wellness products across the segments of nutrition, baby care, skin care, home healthcare etc.

Newgen Software Technologies rallied 2.52% after the company`s consolidated net profit rose 57.82% to Rs 30.27 crore on 20.34% increase in net sales to Rs 226.11 crore in Q2 September 2022 over Q1 June 2022.

Tata Metaliks rose 1.49%. The company reported a net profit of Rs 14.29 crore in Q2 FY23, down by 73.8% from Rs 54.62 crore recorded in Q2 FY22. Revenue from operations increased by 36% YoY to Rs 876.98 crore during the quarter. This was driven by higher sales volume of both Pig Iron (PI) and Ductile Iron (DI) Pipe by approximately 23% and approximately 52%, respectively, despite the disruption for 4-5 days due to rail & road agitation in Kharagpur.

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