Benchmarks trade in narrow range; breadth turns negative

Equity indices traded in a narrow range with decent gains in mid morning trade. The Nifty traded above the 17,100 level. FMCG and oil & gas stocks were in demand while media shares corrected.

At 11:29 IST, the S&P BSE Sensex rose 348.79 points or 0.61% to 57,0168.13. The Nifty 50 index gained 102.1 points or 0.6% to 17,140.25.

The broader market traded near the flat line. The S&P BSE Mid-Cap index rose 0.04% while the S&P BSE Small-Cap index fell 0.27%.

The market breadth turned negative. On the BSE, 1500 shares rose while 1711 shares fell. A total of 134 shares were unchanged.

Buzzing Index:

The Nifty FMCG index rallied 1.59% to 38,231.95 and was the top gaining on the NSE sectoral indices.

Varun Beverages (up 3.33%), United Breweries (up 2.3%), Procter & Gamble Hygiene and Health Care (up 1.29%) and Emami (up 0.99%) were the top gainers. Among the other gainers were Nestle India (up 0.97%), ITC (up 0.83%), Colgate-Palmolive (India) (up 0.49%) and Tata Consumer Products (up 0.43%).

Hindustan Unilever was up 3.07%. The FMCG major reported an 8.59% rise in standalone net profit to Rs 2,327 crore on 10.40% increase in sales to Rs 13,190 crore in Q4 FY22 over Q4 FY21. During the quarter, HUL`s volume growth was flat. Earnings before interest, tax, depreciation and amortization (EBITDA) for the quarter stood at Rs 3,245 crore, a growth of 10% YoY. EBITDA margin at 24.6% remained healthy despite very high inflationary headwinds. Profit before tax (PBT) rose 10.84% to Rs 3,128 crore in Q4 FY22 over Q4 FY21.

Stocks in Spotlight:

Oil and Natural Gas Corporation (ONGC) fell 0.76%. The PSU company announced that it has signed a memorandum of understanding (MoU) with Equinor ASA, the Norwegian state-owned multinational energy company. As per the agreement, both ONGC and Equinor will collaborate with each other in the field of upstream oil and gas, midstream, marketing and trading, besides exploring further options in low carbon fuel, renewables, carbon capture storage (CCS) as well as carbon capture utilization and sequestration (CCUS) opportunities in India. The MoU is valid for two years under which both companies have agreed to work together in the areas identified.

Cyient fell 0.83%. The IT company will acquire Grit Consulting for an enterprise value of $37 million on a debt free, cash free basis. The company will pay 50% of the consideration upfront and remaining 50% will be paid as an earnout over two years subject to business performance. The transaction is accretive on EPS and EBIT margin from the first year. Cyient said that the global consulting services market is expected to cross $1.2 trillion by 2025. The acquisition will enable Cyient customers across sectors to draw value from the Grit`s deep knowledge and Cyient`s technology solutions capabilities.

Global Markets:

Asian stocks were trading higher on Thursday, as investors in the region look ahead to the Bank of Japan`s latest monetary policy decision. Chinese tech stocks rose, boosted by news to support the economy.

Investors in Asia-Pacific have been continuing to monitor developments surrounding the Covid situation in mainland China. Chinese President Xi Jinping on Tuesday called for an �all-out� effort to construct infrastructure. His comments come as mainland China has since March been facing its worst outbreak of Covid-19 since the initial shock of the pandemic in early 2020.

Japan`s retail sales rose more than expected in March, according to government data released Thursday. Retail sales gained 0.9% in March as compared with a year earlier.

U.S. stocks edged higher in choppy trading Wednesday, clawing back some of their losses after selling off sharply a day earlier.

The US trade deficit in goods widened to a record high in March. The goods trade deficit jumped 17.8% to an all-time high of $125.3 billion. The increase likely reflected both higher volumes and prices. Imports of goods accelerated 11.5% to $294.6 billion. They were boosted by a 15.% surge in imports of industrial supplies, which include petroleum products.

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