Indices nudge higher in early trade; breadth strong

Amid volatility, the key indices are trading with small gains after opening lower. At 9:27 IST, the barometer index, the S&P BSE Sensex, rose 48.11 points or 0.08% at 58,836.27. The Nifty 50 index was up 19 points or 0.11% at 17,579.90.

In the broader market, the S&P BSE Mid-Cap index fell 0.1% while the S&P BSE Small-Cap index gained 0.16%.

The market breadth was strong. On the BSE, 1,728 shares rose and 906 shares fell. A total of 93 shares were unchanged.

Foreign portfolio investors (FPIs) sold shares worth Rs 1,597.54 crore, while domestic institutional investors (DIIs), were net sellers to the tune of Rs 370.58 crore in the Indian equity market on 3 February, provisional data showed.

Stocks in Spotlight:

ITC rose 0.53%. The company`s standalone net profit rose 12.70% to Rs 4,156.20 crore on 32.06% increase in net revenue to Rs 15,689.29 crore in Q3 FY22 as compared with Q3 FY21. EBITDA improved by 18.2% to Rs 5,102 crore in Q3 FY22 from Rs 4,315 crore in Q3 FY21. Profit before tax in the third quarter stood at Rs 5,492.03 crore, up by 12.53% from Rs 4,880.43 crore reported in the same period last year.

Total FMCG segment revenue increased by 12% YoY to Rs 10335 crore during the period under review. In the FMCG segment, cigarettes revenue rose by 14% YoY to Rs 6244 crore while the revenue from other FMCG segment improved by 9% YoY to Rs 4091 crore during the quarter. Hotel business revenue stood at Rs 473 crore (up 101% YoY), agri-business revenue was at Rs 4962 crore (down 100% YoY) and paperboards, paper & packaging revenues were at Rs 2046 crore (up 39% YoY) in the third quarter of FY22. The board recommended an interim dividend of Rs 5.25 per share for the financial ear ending 31st March 2022.

Dr.Reddy`s Laboratories fell 0.32%. The drug major said that it has entered into a definitive agreement to acquire German medical cannabis firm Nimbus Health GmbH. Nimbus Health is a privately owned, licensed pharmaceutical wholesaler from Germany focusing on medical cannabis in Germany. The pharma company will acquire Nimbus Health for an upfront payment plus performance and milestone-based earn-outs over the next four years. Founded in 2018, Nimbus Health is one of the pioneer companies for medical cannabis in Germany. The acquisition will allow Dr. Reddy`s to build on Nimbus Health`s strengths and introduce medical cannabis-based medicines as a promising treatment option for patients. The company will be operating under the brand Nimbus Health and as a wholly-owned subsidiary of Dr. Reddy`s.

Global Markets:

Asian stocks were trading higher on Friday, following heavy losses overnight on Wall Street that saw the tech-heavy Nasdaq Composite plunging nearly 4%. Markets in Hong Kong returned to trade on Friday after being closed for most of this week due to the Lunar New Year holidays. Over in mainland China, markets remain closed on Friday for the holidays.

U.S. stocks fell on Thursday, dragged down by technology and social-media companies, as Facebook owner Meta Platforms plunged after a disappointing earnings report.

Meta Platforms shares plunged after the company`s quarterly profit fell short of expectations. The company also issued weaker-than-expected revenue guidance for the current quarter. It was the biggest drop ever for the Facebook parent.

On the data front, investors are awaiting the U.S. Labor Department`s nonfarm payroll count due Friday, which is seen as one of the major indicators of the how the U.S. economy is doing.

In commodities, front-month U.S. oil futures rose 2.3% to settle at $90.27 per barrel, the first time the benchmark had topped $90 since October 2014. Crude prices rose as demand for petroleum products surges while supply remains constrained.

In Europe, the Bank of England pressed ahead with raising borrowing costs Thursday, nudging up its policy rate to 0.5% from 0.25%. The European Central Bank kept its key interest rates unchanged, but ECB President Christine Lagarde signaled concern about inflation and opened the door to a possible rate hike later this year.

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