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Benchmarks crawl higher, rise for 5th day; Nifty ends at 17,345.45; NSE VIX jumps 6%

Published on Aug 02, 2022 16:34

The domestic equity barometers ended a tad above the flat line after a volatile session on Tuesday. Negative global cues triggered profit selling in domestic shares. PSU banks, FMCG and auto shares were in demand. On the other hand, realty, IT and financial services shares were under pressure.

The barometer index, the S&P BSE Sensex, was up 20.86 points or 0.04% to 58,136.36. The Nifty 50 index rose 5.40 points or 0.03% to 17,345.45. Both the indices have climbed over 5% in five trading sessions.

The Nifty opened in the red and hit the day`s low of 17,215.85 in the morning trade. It bounced back in mid-afternoon trade and hit the day`s high of 17,390.15 in late trade.

Asian Paints (up 2.18%), Hindustan Unilever (up 1.6%), Kotak Mahindra Bank (up 1.61%), SBI (up 1.55%) and Reliance Industries (up 0.31%) supported the indices.

The broader market outperformed the headline indices. The S&P BSE Mid-Cap index rose 0.50% while the S&P BSE Small-Cap index gained 0.34%.

The market breadth was positive. On the BSE, 1,892 shares rose and 1,479 shares fell. A total of 123 shares were unchanged.

The NSE`s India VIX, a gauge of the market`s expectation of volatility over the near term, rose 5.97% to 18.53.

Economy:

Finance Minister Nirmala Sitharaman said on Monday that India is still the fastest growing economy whose financial situation is much better than most other countries. Speaking during a debate on the issue of price hike in the Lok Sabha, Sitharaman said the global agencies have ranked India`s economy higher than most countries and there is no sign of recession in the country. Sitharaman added that the government is making efforts to bring down retail inflation below 7%.

5G Spectrum Auction:

Communications Minister Ashwini Vaishnaw has said that the 5G telecom services is likely to be launched by October this year.

Briefing the media in New Delhi, Vaishnaw said, more than Rs 1.5 lakh crore of bids were received during the 5G auction, which commenced on 26th of last month. The spectrum will be assigned to the successful bidders for providing 5G services to the public and enterprises. The auction was held for spectrum in various Low, Medium, and High-frequency bands.

The Government of India had put 72,098 MHz spectrum to auction, of which 51,236 MHz (71% of the total) has been sold with bid amounting to Rs 1,50,173 crore.

Numbers to Track:

The yield on India`s 10-year benchmark federal paper declined to 7.1962 as compared with 7.240 at close in the previous trading session.

In the foreign exchange market, the rupee advanced against the dollar. The partially convertible rupee was hovering at 78.695, compared with its close of 79.06 during the previous trading session.

MCX Gold futures for 5 August 2022 settlement declined 0.25% to Rs 51,135.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, rose 0.09% to 105.54.

In the commodities market, Brent crude for October 2022 settlement fell $1.13 or 1.13% at $98.90 a barrel.

Global Markets:

The Dow Jones index futures were down 171 points, indicating a negative opening in the US stocks today.

Shares in Europe and Asia declined on Tuesday as South Korea`s inflation rose and investors look ahead to the Reserve Bank of Australia`s interest rate decision.

The Reserve Bank of Australia is expected to hike rates after official data showed prices in Australia rose 6.1% in the second quarter compared with a year ago.

Consumer prices in South Korea rose 6.3% in July compared with the same period in 2021, official data showed on Tuesday.

Wall Street ended a three-day winning streak and crude prices plunged on Monday as economic data from the US, Europe and China showed demand weakening under inflation pressures, while the looming possibility of recession curbed risk appetite.

Buzzing segment:

The Nifty Auto index rose 0.54% to 13,023.65. The index has advanced 6.09% in five trading sessions.

Tube Investments of India (up 2.81%), Balkrishna Industries (up 2.17%), Maruti Suzuki India (up 1.46%), Mahindra & Mahindra (up 1.07%), MRF (up 0.80%), %), Bosch (up 0.65%) and Bajaj Auto (up 0.63%) edged higher.

TVS Motor Company rose 1.01%. The company`s total sales rose by 13% in July 2022 with sales of 314,639 units as against 278,855 units in the month of July 2021. Total two-wheelers registered a growth of 14% in July 2022 with sales increasing from 262,728 units in July 2021 to 299,658 units in July 2022.

Hero MotoCorp fell 2.46%. The company said that it had sold 445,580 units in July 2022, which is lower by 2% as compared with 454,398 units sold in July 2021. While sales in the domestic market rose marginally to 430,684 units, exports fell by 41% to 14,896 units in July 2022 over July 2021. The company sold 421,288 units of motorcycles (down 1% YoY) and 24,292 units of scooters (down 20% YoY) during the period under review.

Eicher Motors gained 0.83%. The company said that its unlisted subsidiary VE Commercial Vehicles sold 5982 units in July 2022, up 40.10% compared with 4271 units sold in July 2021.

Separately, Eicher Motors informed that it sold 55,555 motorcycle units in July 2022 as against 44,038 units sold in July 2021, recording a growth of 26% YoY.

Escorts Kubota dropped 5.11% after the company`s standalone net profit tumbled 20.4% to Rs 147.5 crore on a 20.1% jump in revenue from operations to Rs 2,014.85 crore in Q1 FY23 over Q1 FY22.

Stocks in Spotlight:

ITC rose 0.68% to Rs 309.65 after the company`s standalone net profit rose 38.4% to Rs 4,169 crore on 41.9% increase in net revenue to Rs 17,217 crore in Q1 June 2022 over Q1 June 2021. The counter hit 52 week high of Rs 316.65, extending its winning run to second consecutive trading session.

Total FMCG segment revenue increased 25% YoY to Rs 11060 crore during the period under review. In the FMCG segment, cigarettes revenue rose by 29% YoY to Rs 6609 crore while the revenue from other FMCG segment improved by 19% YoY to Rs 4451 crore during the quarter. Hotel business revenue stood at Rs 555 crore (up 336% YoY), agri-business revenue was at Rs 7473 crore (up 83% YoY) and paperboards, paper & packaging revenues were at Rs 2267 crore (up 43% YoY) in the frist quarter of FY23.

Zomato hit an upper circuit of 20% to settle at Rs 55.60 after the online food delivery platform reported a consolidated net loss of Rs 186 crore in Q1 June 2022, as against net loss of Rs 360.70 crore in Q1 June 2021. Zomato reported a net loss of Rs 359.70 crore in Q4 March 2022. Revenue from operations stood at Rs 1,413.9 crore in Q1 June 2022, up 67.44% from Rs 844.4 crore reported in Q1 June 2021.

Growth in revenue was driven by ~10% QoQ growth in Gross Order Value (GOV) to Rs 6,430 crore in Q1 FY23 and growth in revenue per order. GOV growth was in turn driven by robust growth in order volumes and mild growth in average order values as compared to the previous quarter.

Yes Bank surged 12.84% after the media reported that former HDFC Bank MD Aditya Puri is likely to get a board seat in Yes Bank on behalf of the Carlyle Group.

Aditya Puri is a senior advisor to the Carlyle Group`s Asia private equity team. Puri was the CEO and managing director of HDFC Bank from its inception in 1994 until October 2020. Over his 26 tenure leading the business, Puri grew HDFC Bank into the largest private sector bank in India with over $210 billion of assets (as of 30 September 2020), and the most valuable bank in India with a market cap of over $90 billion (as of October 2020). The media reported that Yes Bank MD and CEO Prashant Kumar will continue to lead the bank, post the deal.

Kansai Nerolac Paints rose 16.16%. On a standalone basis, the company declared net revenue of Rs 1944.6 crore in Q1 June 2022, a growth of 47.1% over the corresponding quarter of the previous year. EBIDTA was at Rs 255.6 crore, a growth of 34.7% over the same quarter of the previous year. PAT was at Rs 162.9 crore, a growth of 37% over the same quarter of the previous year.

SpiceJet jumped 10.17%. The low-cost airliner has entered into a full and final settlement with the Airports Authority of India (AAI) and has cleared all outstanding principal dues of the airport operator. With this, SpiceJet will no longer remain on `cash and carry` at AAI run airports across the country and will revert to advance payment mechanism for daily flight operations.

Bank of India added 2.65% after the bank reported 22% drop in standalone net profit to Rs 561 crore on a 4% fall in total income to Rs 11,124 crore in Q1 FY23 over Q1 FY22. Net Interest Income (NII) increased by 29% to Rs 4,072 crore in Q1 FY23 from Rs 3,146 crore in Q1 FY22. Net Interest Margin (NIM) was 2.55% in Q1 FY23 as against 2.16% in Q1 FY22. Operating profit fell 21% YoY to Rs 2,183 crore in the first quarter.

Adani Ports and Special Economic Zone (APSEZ) rose 0.14%. The company said that it handled a record cargo volume of 31.23 million metric tonnes (MMT) in July 2022, implying a 13% YoY growth.

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