Indices end marginally higher; Nifty settles below 16,700

Domestic equity benchmarks ended with tiny gains on Thursday, tracking mixed global cues. The Nifty ended below 16,700 mark after hitting the day`s high of 16,945.70 in morning trade. IT and metal shares advanced while banks, FMCG and realty shares declined.

The barometer index, S&P BSE Sensex rose 33.20 points or 0.06% to 55,702.23. The Nifty 50 index added 5.05 points or 0.03% to 16,682.65.

The broader market declined. The S&P BSE Mid-Cap index fell 0.21% while the S&P BSE Small-Cap index declined 0.32%.

The market breadth was negative. On the BSE, 1529 shares rose while 1814 shares fell. A total of 118 shares were unchanged.

Economy:

The seasonally adjusted S&P Global India Services PMI Business Activity Index rose to 57.9 in April, up from 53.6 in March. The expansion was the fastest since last November. The output was boosted by higher bookings, the easing of pandemic-related restrictions and favourable demand conditions.

Numbers to Watch:

The yield on India`s 10-year benchmark federal paper rose to 7.403% as compared with 7.378% at close in the previous trading session.

In the foreign exchange market, the rupee was higher against the dollar. The partially convertible rupee was hovering at 76.2450, compared with its close of 76.40 during the previous trading session.

MCX Gold futures for 3 June 2022 settlement rose 1.27% to Rs 51,252.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, increased 0.17% to 102.76.

In the commodities market, Brent crude for July 2022 settlement rose 49 cents or 0.44% at $110.63 a barrel. The contract rose $5.17 or 4.93% to settle at $110.14 a barrel during the previous trading session.

Global Markets:

The US Dow Jones index futures were down 159 points, indicating a weak opening in the US stocks today.

European markets rallied across the board while most Asian stocks ended higher on Thursday, after the U.S. Federal Reserve doused speculation about more aggressive monetary tightening.

China`s services sector activity shrunk further in April, a private sector survey showed Thursday. The Caixin services Purchasing Managers` Index (PMI) declined to 36.2 for April, lower than March`s reading of 42.

Meanwhile, US private payrolls climbed by 247,000 in April, according to the ADP National Employment Report released Wednesday.

The U.S. trade deficit jumped 22.3% to record $109.8 billion in March, the U.S. Census Bureau and the U.S. Bureau of Economic Analysis said Wednesday. U.S. imports climbed 10.3% to $351.5 billion, while U.S. exports increased 5.6% to $241.7 billion in March.

In addition, the Institute for Supply Management services index showed weaker new-orders growth and employment, with the number dropping to 57.1% in April from 58.3%.

US Fed Policy Action:

The United States Federal Reserve raised its benchmark short-term interest rate by 50 basis point on Wednesday, its most aggressive move since 2000. This triggered a relief rally across global stocks as investors were worried that Fed might shock markets with a 75 bps hike.

Fed Chairman Jerome Powell said half-point rises remain on the table for the next couple of meetings. Powell talked about a strong economy, but also the pain consumers have been feeling at the grocery store and gas pump, in afternoon news conference, saying higher interest rates are the cure.

The Fed also outlined plans to reduce its near $9 trillion balance sheet, first by $47.5 billion a month starting in June, but ramping up to $95 billion a month. This will result in a nearly $3 trillion reduction in its record size over the next three years.

Buzzing Segment:

The Nifty IT index jumped 1.62% at 423.20. The index fell 3.51% in the past three sessions.

Tech Mahindra (up 4.22%), Infosys (up 3.29%), Coforge (up 2.75%), HCL Technologies (up 2.64%), L&T Technology Services (up 2.30%), Mindtree (up 1.15%), Tata Consultancy Services (up 0.83%), Larsen & Toubro Infotech (up 0.67%) and Mphasis (up 0.38%) advanced.

Wipro rose 1.86%. The IT major and and HFCL have partnered to engineer a portfolio of 5G products for the telecommunications sector, including 5G radio access network and 5G transport equipment.

Stocks in Spotlight:

TARC surged 10.98%. The North India based real estate development company raised Rs 1330 crore from US-based Bain Capital. The funds were infused by Bain Capital Credit in the form of secured long term NCDs.

Dabur India fell 1.55%. The FMCG firm reported a 22% decline in consolidated net profit to Rs 294.22 crore on a 7.7% rise in revenue from operations to Rs 2,517.81 crore in Q4 FY22 over Q4 FY21. Profit before tax in Q4 FY22 stood at Rs 389.71 crore, down13.7% from Rs 451.64 crore posted in Q4 FY21. Operating profit grew 2.5% year on year to Rs 453.6 crore while operating margin declined to 18% in Q4 FY22 from 18.9% in Q4 FY21.

Equitas Small Finance Bank rose 3.65% after the bank`s net profit rose 5.88% to Rs 119.51 crore on 4.74% increase in total income to Rs 1,043.98 crore in Q4 March 2022 over Q4 March 2021. Profit before tax (PBT) rose rose 5.15% year-on-year to Rs 160.73 crore in Q4 March 2022. Net Interest Income for Q4FY22 stood at Rs 552 crore as against Rs 449 crore in Q4FY21. NIM stood at 9.12% in Q4FY22.

ABB India surged 10.47% after the company`s net profit jumped 76.45% to Rs 152.08 crore on 20.75% increase in net sales to Rs 1,953.93 crore in Q1 March 2022 over Q1 March 2021. During the quarter, the company sold the turbocharger business to its wholly owned subsidiary Turbocharging Industries and Services India. In this regard, profit on sale amounting to Rs 293 crore has been disclosed as exceptional item in the financial results for the first quarter ended 31 March 2022.

Adani Power hit an upper circuit of 5% at Rs 279.50 after the company`s consolidated net profit soared to Rs 4645.47 crore in Q4 FY22 as against net profit of Rs 13.13 crore in Q4 FY21. Net sales in the fourth quarter stood at Rs 10,597.78 crore, up 66.28% from Rs 6,373.60 crore reported in the same period last year.

Total orders rose 2.14% QoQ and surged 25.53% YoY to Rs 2,291 crore in Q1 March 2022, the highest for the first quarter in the last five years.

Tata Power Company rose 1.06%. The company announced that its wholly owned subsidiary, Tata Power Solar Systems bagged single solar EPC order of 1GW (gigawatt) for approximately Rs 5,500 crore from SJVN, hydroelectric power generation company.

Larsen & Toubro (L&T) rose 0.28%. The company on Thursday announced that its railway arm secured a contract from National High-Speed Rail Corporation (NHSRCL) to construct 116 route kilometre of high-speed ballastless trackworks.

The contract received is for Mumbai-Ahmedabad High-Speed Rail (MAHSR) project, popularly referred to as the Bullet Train Project. As per L&T classification, the value of the `large` contract lies between Rs 2,500 crore and Rs 5,000 crore.

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