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Benchmarks turn rangebound; auto shares advance

Published on Jul 06, 2022 11:30

The key equity indices traded in a narrow range in mid-morning trade. The Nifty hovered near the 15,900 level. Auto shares witnessed across the board buying.

At 11:28 IST, the barometer index, the S&P BSE Sensex, was up 319.63 points or 0.60% to 53,453.98. The Nifty 50 index added 84.30 points or 0.53% to 15,895.15.

In the broader market, the S&P BSE Mid-Cap index rose 0.66% while the S&P BSE Small-Cap index gained 0.29%.

The market breadth was strong. On the BSE, 1,593 shares rose and 1,441 shares fell. A total of 143 shares were unchanged.

Some cooling off in global crude prices boosted domestic investor sentiment and raised expectations for some relief from surging local inflation. Weak crude price benefits India as it positively impacts growth, current account deficit (CAD), inflation and fiscal deficit.

Investors will closely monitor the release of the Federal Reserve`s minutes of meeting in June, to be out late on Wednesday.

Buzzing Index:

The Nifty Auto index rose 1.82% to 11,862.25. The index had declined 0.53% in the past two sessions.

Tube Investments of India (up 5.29%), Hero MotoCorp (up 2.58%), Eicher Motors (up 2.55%), Escorts Kubota (up 2.27%) and TVS Motor Company (up 2.26%) were the top index gainers.

Among the other gainers were Mahindra & Mahindra (up 2.14%), Maruti Suzuki India (up 2.12%), Bosch (up 1.85%), Bajaj Auto (up 1.63%) and MRF (up 1.6%).

Stocks in Spotlight:

Marico added 0.97%. The FMCG major said its India business volumes in Q1FY23 declined in mid-single digits, particularly dragged by a sharp drop in Saffola Oils, while Parachute coconut oil recorded a minor volume decline.

Among key inputs, copra prices remained soft during the quarter. Edible and crude oil prices cooled to some extent towards the end of the quarter, but the company consumed higher cost inventory in this quarter.

Gross margin is expected to expand on a year-on year basis, but remain near the same levels as the preceding quarter.The company expects operating margin to expand, leading to reasonable operating profit growth on a year on year basis.

Macrotech Developers rose 3.72%. The realty major`s pre-sales for Q1 FY23 stood at Rs 2,814 crores in India, jumping 194% from Rs 957 crore posted in Q1 FY22.

The real estate developer`s collections grew by 53% year on year to Rs 2,616 crore in Q1 FY23. Meanwhile, net debt for India business has been reduced to Rs 8,858 crore in Q1 FY23 from 9,300 crore registered in Q4 FY22 and Rs 12,417 crore posted in Q1 FY22.

Global markets:

Asian shares dropped on Wednesday despite Wall Street recovering most of its losses by the close.

In central bank news, Bank Negara Malaysia is expected to release its monetary policy statement today.

US stock indices initially fell sharply on Tuesday before rallying in the afternoon. Concerns about a possible recession in the US weighed on investor sentiment but lower interest rates appeared to boost the tech sector.

The Nasdaq Composite ended the session 1.75% higher at 11,322.24, while the S&P 500 was up 0.16% at 3,831.39. The Dow Jones Industrial Average, however, shed 129.44 points, or 0.4%.

New orders for US-manufactured goods increased more than expected in May. The Commerce Department said on Tuesday that factory orders rose 1.6% in May after advancing 0.7 percent in April.

Crude oil futures rose after plunging overnight. In the commodities market, Brent crude for September 2022 settlement was up 95 cents or 0.92% at $103.72 a barrel. The contract slumped 7.94% on Tuesday to settle at $102.77 a barrel.

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