Market rises for 5th session; Nifty ends above 18,250; Wipro drops 6%

Domestic equity benchmarks settled with small gains on Thursday, extending the rally to fifth consecutive trading session. Trading was volatile due to mixed global cues. The Nifty managed to end above the 18,250 level after hitting the day`s low of 18,163.80 in morning trade. Metal, pharma and auto stocks advanced while realty, banks and financial shares corrected.

Global cues were mixed after US inflation jumped at its fastest pace in nearly 40 years last month and China`s bank lending declined more than expected in December.

The barometer index, the S&P BSE Sensex, rose 85.26 points or 0.14% at 61,235.30. The Nifty 50 index rose 45.45 points or 0.25% at 18,257.80. Both these indices have risen about 2.8% in five sessions.

Broader indices outperformed the benchmarks. The S&P BSE Mid-Cap index rose 0.38% while the S&P BSE Small-Cap index added 0.49%.

The market breadth was positive. On the BSE, 1,737 shares rose and 1,681 shares fell. A total of 81 shares were unchanged.

COVID-19 Update:

India reported 2,47,417 new cases in the last 24 hours. The daily positivity rate stood at 13.11%. The country`s active caseload currently stands at 11,17,531. Active cases stands at 3.08% of the total infections and recovery rate currently stands at 95.59%. There were 84,825 recoveries in the last 24 hours, which increases total recoveries to 3,47,15,361.

Economy:

India`s retail inflation rose sharply to 5.59% in the month of December from 4.91% in November, pushed up by rising prices of manufactured items, data released by the government showed on Wednesday. Inflation as measured by Consumer Price Index (CPI) was 4.59% in the year-ago period.

Separately, industrial production for the month of November grew by 1.4% as compared to (-)1.6% in the same month last year. IIP surged 3.2% in the month of October.

Numbers to Track:

The yield on India`s 10-year benchmark federal paper fell to 6.565% as compared with 6.593% at close in the previous trading session.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 73.90, compared with its close of 73.93 during the previous trading session.

MCX Gold futures for 4 February 2022 settlement rose 0.03% to Rs 47,824.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, fell 0.08% to 94.84.

In the commodities market, Brent crude for March 2022 settlement rose 8 cents or 0.09% to $84.75 a barrel.

Global Markets:

Most European indices declined while the Asian markets ended on a mixed note on Thursday.

New bank lending in China fell more than expected in December from the previous month. Chinese banks extended 1.13 trillion yuan ($177.56 billion) in new yuan loans in December, down from 1.27 trillion yuan in November, according to data released by the People`s Bank of China (PBOC) on Wednesday.

Meanwhile, US consumer price growth rose at the fastest pace in almost four decades in December. The consumer price index (CPI) increased at a 7% year-on-year pace last month, a step up from the 6.8% rate registered in November and the largest jump since June 1982.

Investors are keeping an eye on Covid developments, as the World Health Organization reported a record 15 million new Covid-19 cases globally for a single week, as omicron rapidly replaces delta as the dominant variant across the globe. The World Health Organization warned that omicron cases are "off the charts."

Earnings Impact:

Wipro dropped 6%. The IT company reported a 1.3% rise in consolidated net profit to Rs 2,970 crore on a 3.3% rise in revenue from operations to Rs 20,313.6 crore in Q3 FY22 over Q2 FY22. In dollar terms, Wipro`s gross revenue was $2.7 billion in the third quarter of financial year ended 2022. The IT services segment revenue stood at $2,639.7 million, an increase of 2.3% Q-o-Q and 27.5% Y-o-Y. IT services operating margin for the quarter was at 17.6%, a decrease of 19 basis points quarter on quarter. Wipro said it expects revenue from its IT services business to be in the range of $2,692 million to $2,745 million. This translates to a sequential growth of 2% to 4%.

Tata Consultancy Services (TCS) rose 1.05%. The IT major`s consolidated net profit rose 1.51% to Rs 9,769 crore on 4.31% increase in net sales to Rs 48,885 crore in Q3 FY22 over Q2 FY22. On a year-on-year (Y-o-Y) basis, the IT major`s net profit rose 12.27% and net sales rose 16.35% in Q3 FY22. Constant currency revenue grew 15.4% Y-o-Y. Operating margin fell 1.6% Y-o-Y to 25% in Q3 FY22. The board recommended a third interim dividend of Rs 7 per share.

The TCS board also recommended to buyback upto four crore equity shares for an aggregate amount not exceeding Rs 18,000 crore, being 1.08% of the total paid-up equity share capital, at Rs 4,500 per share. The buyback price is 16.66% premium to Wednesday`s closing price.

Infosys gained 1.03%. The IT major`s consolidated net profit rose 7.1% to Rs 5,809 crore on a 7.7% increase in revenues to Rs 31,867 crore in Q3 FY22 over Q2 FY22. On a year-on-year basis, Infosys` net profit and revenue in Q3 FY22 increased 11.8% and 22.9%, respectively. In dollar terms, the company reported revenues of $4,250 million, registering a growth of 20.9% Y-o-Y for the quarter ended 31 December 2021. Revenues in constant currency terms grew by 21.5% Y-o-Y and 7% Q-o-Q. Operating margin for the quarter stood at 23.5%, a decline of 1.9% Y-o-Y and 0.1% Q-o-Q. Infosys has revised upwards its revenue guidance for FY22 to 19.5%-20%. Margin guidance is retained at 22%-24%.

CESC fell 0.65%. The company`s consolidated net profit remained flat at Rs 329 crore while sales rose 1.51% to Rs 2826 crore in Q3 FY22 as compared with Q3 FY21. Profit before tax in Q3 FY22 stood at Rs 459 crore, up by 1.55% from Rs 452 crore in Q3 FY21. The company has declared an interim dividend of Rs 4.50 per equity share for financial year 2021-22. The record date for the same is 25 January 2022.

Stocks in Spotlight:

Reliance Industries (RIL) rose 0.59%. RIL announced that it signed MoU today with the Government of Gujarat for a total investment of Rs 5.955 lakh crore as part of Investment Promotion Activity for Vibrant Gujarat Summit 2022.

To make Gujarat net zero and carbon free, RIL proposes to invest Rs 5 lakh crore in the State over the span of 10 to 15 years to set up 100 GW Renewable Energy Power Plant and Green Hydrogen Eco-System development.

State Bank of India (SBI) rose 0.23%. The PSU bank concluded the issue of $300 million senior unsecured fixed rate notes having maturity of five years and a coupon rate of 2.49% payable semi-annually. The bonds will be issued through its London branch as of 26 January 2022 and shall be listed on Taipei Exchange (TPEx), Singapore Stock Exchange and lndia lnternational Exchange, GIFT City (Gujarat).

Manappuram Finance fell 0.56%. The NBFC said that a meeting of the financial resources and management committee of the board will be held on Monday, 17 January 2022, to consider and approve the issuance of secured, rated redeemable non-convertible debentures.

Tata Motors rose 0.96%. The company`s its subsidiary, Jaguar Land Rover (JLR) recorded a 37.6% drop in retail sales to 80,126 units in Q3 FY22 over Q3 FY21. Sequentially, Jaguar Land Rover (JLR), the subsidiary of Tata Motors, witnessed a 13.6% fall in retail sales to 80,126 units in Q3 FY22 from Q2 FY22. Jaguar Land Rover retail sales for the three-month period to 31 December 2021 continued to be constrained by the global semiconductor shortage, though the company started to see some improvement in chip supply and wholesale volumes compared to the preceding quarter.

TVS Motor Company added 0.86% after the company announced a strategic partnership with Swiggy, India`s leading on-demand delivery platform. As part of the MoU, TVS Motor and Swiggy will test the implementation of TVS Motor`s electric vehicles (EV) for food delivery and other on-demand services of Swiggy. The two companies are exploring the co-creation of sustainable and comprehensive solutions for Swiggy`s delivery partners. This will include working on customised packages like a need-specific product, flexible financing options and, connected services.

Ramkrishna Forgings rose 1.66% after the company won an export order worth Rs 57.50 crore from North America for supplying spindle. The export order will be supplied over a period of 3 years from one of the largest TIER-1 manufacturers in North America in commercial vehicle (CV) segment.

Lumax Industries fell 0.29%. The company commenced its commercial production of electronic components for automotives, at its new manufacturing plant situated at Bawal (Haryana) on Wednesday, 12 January 2022.

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