Nifty above 16,200 level, broader market rallies

The headline equity indices traded with strong gains in the afternoon trade. The Nifty traded a tad above the 16,200 level. IT, PSU banks and metal stocks were in demand. On the other hand, healthcare and pharma shares declined.

At 13:30 IST, the barometer index, the S&P BSE Sensex, was up 503.63 points or 0.94% to 54,264.41. The Nifty 50 index added 156.25 points or 0.97% to 16,205.45.

The broader market was trading firm. The S&P BSE Mid-Cap index rose 1.23% while the S&P BSE Small-Cap index added 1.29%.

The market breadth was strong. On the BSE, 2,277 shares rose and 1,057 shares fell. A total of 168 shares were unchanged.

Economy:

India`s foreign exchange reserves declined by $8.062 billion to a 15-month low of $580.252 billion in the week ended 8 July 2022, according to the Reserve Bank of India`s Weekly Statistical Supplement released on Friday, 15 July 2022.

During the reporting week ended 8 July 2022, the decrease in the reserves was on account of a fall in the Foreign Currency Assets (FCA), a major component of the overall reserves, and in the gold reserves, RBI said. FCA was down by $6.656 billion to $518.089 billion in the reporting week. FCA includes the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.

Gold reserves fell by $1.236 billion to $39.186 billion.

In the reported week, the Special Drawing Rights (SDRs) with the International Monetary Fund (IMF) dropped by $122 million to $18.012 billion. The country`s reserve position with IMF decreased by $49 million to $4.966 billion in the reporting week, the RBI data showed.

Gainers & Losers:

Infosys (up 4%), Hindalco Industries (up 3.69%), IndusInd Bank (up 3.66%), Tech Mahindra (up 3.54%) and Bajaj Finserve (up 3.03%) were major Nifty gainers.

Dr. Reddy`s Laboratories (down 1.41%), Britania Industries (down 1.37%), HDFC Bank (down 1.17%), HDFC (down 0.68%) and Mahindra & Mahindra (M&M) (down 0.66%) were majority Nifty losers.

HDFC Bank fell 1.17%. The private lender`s net profit rose 18.97% to Rs 9,195.99 crore on 13.02% increase in total income to Rs 41,560.27 crore in Q1 FY23 over Q1 FY22. The bank`s provisions and contingencies (excluding tax provisions) declined 34.01% to Rs 3,187.73 crore in Q1 FY23 over Q1 FY22. Net interest income (interest earned less interest expended) for the quarter ended 30 June 2022 grew by 14.5% to Rs 19,481.4 crore from Rs 17,009 crore for the quarter ended 30 June 2021. Total advances as of June 30 2022 were Rs 1,395,068 crore, an increase of 21.6% over 30 June 2021.

Hindalco Industries gained 3.69%. Aditya Birla Group`s metals flagship company has signed an MoU with Israel-based Phinergy and IOC Phinergy (IOP). Israel-based Phinergy is a pioneer in metal-air battery technology. IOP is a joint venture between Phinergy and India`s leading energy PSU Indian Oil Corporation. As per the MoU, Phinergy and IOP will partner exclusively with Hindalco in India, on R&D and pilot production of aluminium plates for Aluminium-Air batteries, and recycling of aluminium, after usage in these batteries.

Global Markets:

Shares in Europe and Asia advanced on Monday as investors looked ahead to announcements later in the week. Japan`s market was closed for a holiday on Monday. Oil prices dropped as China`s rising COVID cases renew fuel demand concerns.

US stocks closed sharply higher on Friday fueled by upbeat earnings, strong economic data and easing fears of a larger-than-expected interest rate hike by the Federal Reserve.

Finance chiefs at the Group of 20 meeting in Bali "strongly condemned" the war in Ukraine and expressed concern over an "alarming increase of food and energy insecurity." Many members agreed that the recovery of the global economy has slowed and is facing a major setback as a result of Russia`s war against Ukraine, which was strongly condemned. Broadly, all G-20 central banks agreed to tackle inflation and calibrate monetary policies that would rein in soaring prices.

Global interest rates will likely keep rising until 2023 when heated prices will begin to cool in response to the actions from central banks, according to Kristalina Georgieva, managing director of the International Monetary Fund. Commodity prices, such as oil, may have leveled out and started sliding in recent months, but Georgieva said that they will do so in response to recession risks and not necessarily because inflation has been tamed.

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