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Benchmarks trim gains; breadth remains strong

Published on Feb 01, 2022 11:35

The main indices pared gains amid the ongoing Union Budget announcements by Finance Minister. The Nifty declined below the 17,550 level. Healthcare, realty and banks stocks were in demand while PSU banks and auto shares saw selling pressure.

At 11:33 IST, the barometer index, the S&P BSE Sensex, jumped 703.03 points or 1.21% at 58,717.27. The Nifty 50 index advanced 187 points or 1.08% at 17,526.90.

In the broader market, the S&P BSE Mid-Cap index rose 0.42% while the S&P BSE Small-Cap index gained 0.47%.

The market breadth was strong. On the BSE, 1,729 shares rose and 1457 shares fell. A total of 125 shares were unchanged.

Union Budget 2022:

FM Sitharaman began her budget speech by expressing empathy to those who suffered during the pandemic. India`s growth estimated to be at 9.2%, highest among all large economies; we are now in a strong position to withstand challenges, said FM.

Strategic transfer of ownership of Air India has been completed, she added.

The Union Budget focuses on PM Gatishakti, inclusive development, productivity enhancement, sunrise opportunities, energy transition, climate action and financing of investments.

The PM Gatishakti masterplan will encompass the seven engines of economic transformation: roads, railways, airports, ports, mass transport, waterways. logistics infra. All 7 engines will pull forward the economy in unison, supported by energy transmission, IT communciation, bulk water and sewerage and social infra.

PM Gatishakti masterplan for expressways will be formulated in next financial year. The National Highway network will be expanded by 25,000 kms in 2022-23. Four multi-modal national parks contracts will be awarded in FY23.

Under the master plan, 400 new-generation Vande Bharat trains will be developed and manufactured in next 3 years. One station, one product` concept will be popularised to help local businesses. India plans 100 cargo terminals in 3 years.

FM said Emergency Credit Line Guarantee Scheme (ECLGS) will be extended upto March 2023, with guaranteed cover extended by another Rs 50,000 crore.

Economy:

The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers` Index (PMI) was at 54 in January 2022, down from 55.5 in December 2021 and signalling the weakest improvement in the health of the sector since last September.

Commenting on the latest survey results, Pollyanna De Lima, Economics Associate Director at IHS Markit said, �The latest PMI results indicated that the new wave of COVID-19 had a mild impact on the performance of the Indian manufacturing sector. A number of measures such as output, new orders and input buying remained in expansion mode. Although growth rates eased, they were historically strong. Companies sought to rebuild input stocks by purchasing additional raw materials and semi-finished items, but uncertainty surrounding growth prospects resulted in further job shedding. Survey participants were concerned that production growth would be hampered by inflationary pressures, the escalation of the pandemic and any new restrictions it would bring. The overall level of business confidence tumbled to a 19-month low. Input cost inflation receded for the third month in succession during January, but several companies again mentioned that input shortages led suppliers to hike their fees. Such increases continued to feed through to final product prices as firms transferred additional cost burdens to clients. In fact, output charges rose at a faster pace at the start of the year.�

Buzzing Index:

The Nifty Realty index was up 1.78% to 488.85, rising for third trading session. The realty index added 5.79% in three days.

Oberoi Realty (up 3.68%), Brigade Enterprises (up 3.43%), Sobha (up 2.88%), Indiabulls Real Estate (up 2.54%) and Prestige Estates Projects (up 2.41%) were the top gainers. Among the other gainers were Sunteck Realty (up 1.67%), DLF (up 1.46%), Godrej Properties (up 1.26%) and Macrotech Developers (up 0.77%).

Stocks in Spotlight:

Steel Strips Wheels (SSWL) was locked in 5% upper circuit at Rs 786.45 after the company achieved a net turnover of Rs 305.57 crore in January 2022 as against Rs 210.19 crore in January 2021, recording a growth of 44.72% YoY. The company achieved Gross turnover of Rs 3,77.83 crore in January 2022 as compared with Rs 253.50 crore in January 2021, thereby recording a growth of 47.35% YoY.

ITD Cementation India advanced 3% to Rs 77.20 after the company said that it has s secured following orders worth approximately Rs 900 crore. The company has bagged an order from Indian Oil Corporation, for construction of captive petroleum oil and lubricants (POL)/LPG marine jetty and associated mechanical, electrical, firefighting and instrumentation facilities at Kamarajar Port in Ennore, Tamil Nadu.

KEC International rose 0.73%. The EPC company reported a 35% fall in consolidated net profit to Rs 94 crore on a 2% rise in revenues to Rs 3,340 crore in Q3 FY22 over Q3 FY21. EBITDA in Q3 FY22 was Rs 239 crore, down by 20% from Rs 299 crore in Q3 FY21. EBITDA margin was 7.2% in Q3 FY22 as against 9.1% in Q3 FY21. The company`s order intake was Rs 14,121 crore, growth of more than two times against last year. YTD order book was Rs 24,401 crore, a growth of 36% YoY.

Global Markets:

Select Asian markets were trading higher on Tuesday, tracking gains on Wall Street. Markets in mainland China, Hong Kong, South Korea and Singapore are closed for a holiday.

US stocks surged for a second day Monday to wrap up a rough January, as investors snapped up some of the tech shares that have been battered all month.

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