Nifty above 16,600 level, broader market rallies

The benchmark indices traded with minor gains in the morning trade. The Nifty was trading a tad above 16,600 level. Share of metal, oil & gas and PSU banks were in the green while IT, auto and healthcare stocks corrected.

At 10:28 IST, the barometer index, S&P BSE Sensex was up 104.88 points or 0.19% to 55,671.29. The Nifty 50 index rose 21.10 points or 0.13% to 16,605.65.

The broader market outperforms the frontline indices. The S&P BSE Mid-Cap index rose 0.50% while the S&P BSE Small-Cap index gained 1.1%.

The market breadth was strong. On the BSE, 2,039 shares rose while 949 shares fell. A total of 145 shares were unchanged.

Foreign portfolio investors (FPIs) sold shares worth Rs 1,003.56 crore, while domestic institutional investors (DIIs), were net buyers to the tune of Rs 1,845.15 crore in the Indian equity market on 31 May 2022, provisional data showed.

India Manufacturing PMI:

The seasonally adjusted S&P Global India Manufacturing Purchasing Managers` Index (PMI) stood at 54.6 in May, little-changed from 54.7 in April, pointing to a sustained recovery across the sector. The above-50.0 reading was the eleventh in as many months and consistent with a solid improvement in operating conditions.

Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence, said: �India`s manufacturing sector sustained strong growth momentum in May. Thanks in part to the sharpest rise in international sales for eleven years, total new orders expanded further. In response to demand resilience, companies continued with their efforts to rebuild stocks and hired extra workers accordingly.

�While firms appear to be focusing on the now, the survey`s gauge of business optimism shows a sense of unease among manufacturers. The overall level of sentiment was the second-lowest seen for two years, with panellists generally expecting growth prospects to be harmed by acute price pressures.

"There was little-movement in the rate of input price inflation during May, which remains historically high, but output charge inflation surged to its highest in over eight-and-a-half years as companies continued to transfer additional cost burdens to their clients."

Economy:

India`s GDP growth in Q4 FY22 was at 4.1% year-on-year, compared to a revised growth of 5.4% for Q3 FY22. Gross Value Added (GVA), which excludes the impact of subsidies and indirect taxes, grew 3.9% year-on-year in the fourth quarter.

For the full fiscal year, GDP grew 8.7% year-on-year, compared to a contraction of 6.6% in FY21. GVA for FY22 grew 8.1% year-on-year, compared to a contraction of 4.8% in FY21.

The combined Index of Eight Core Industries stood at 143.2 in April 2022, which is an increase of 8.4% (provisional) as compared to the Index of April 2021. The production of Coal, Electricity, Refinery Products, Fertilizers, Cement and Natural Gas industries increased in April 2022 over the corresponding period of last year. The Eight Core Industries comprise 40.27% of the weight of items included in the Index of Industrial Production (IIP).

Final growth rate of Index of Eight Core Industries for January 2022 is revised to 4.0% from its provisional level 3.7%. The growth rate of ICI during April-March 2021-22 was 10.4% (P) as compared to the corresponding period of last FY.

New Listing:

Shares of eMudhra were trading at Rs 261.40 at 10:18 IST on the BSE, a premium of 2.11% as compared to the issue price of Rs 256.

The scrip was listed at Rs 271, representing a premium of 5.86% as compared to the issue price.

So far, the scrip has hit a high of Rs 279 and a low of Rs 256.4. Over 2.82 lakh shares of the company have changed hands in the counter till now.

The IPO of eMudhra subscribed 2.72 times. The issue opened for bidding on Friday (20 May 2022) and it closed on Tuesday (24 May 2022). The price band of the IPO was fixed at Rs 243-256 per share.

Buzzing Index:

The Nifty IT index fell 0.96% to 29,392.80. The index shed 1.21% in two trading sessions.

Mindtree (down 1.46%), Tech Mahindra (down 1.25%), Wipro (down 1.12%), Larsen & Toubro Infotech (down 0.98%), L&T Technology Services (down 0.94%) Coforge (down 0.88%), Infosys (down 0.87%), HCL Technologies (down 0.68%), Tata Consultancy Services (down 0.49%) and Mphasis (down 0.46%) edged lower.

Stocks in Spotlight:

Escorts fell 0.86% after the company total tractor sales jumped by 31.1% YoY to 8,421 units in May 2022 from 6,423 units sold in May 2021. On a sequential basis, tractor sales rose 1.15% in May 2022 from 8,325 units sold in April 2022. Domestic tractor sales in May 2022 stood at 7,667 tractors as against 6,158 tractors sold in May 2021, registering a growth of 24.5% year on year. Export tractor sales in May 2022 were at 754 units in May 2022 against 265 units sold in May 2021, posting a jump of 184.5% year on year.

HFCL rose 2.86% after the company bagged purchase orders aggregating to Rs 237.25 crore from one of the private telecom operators of the country. The order is for the supply of various types of optical fibre cables as per customer specifications. The contract has to be executed by October 2022.

Rail Vikas Nigam advanced 3.24% after the company said that its joint venture RVNL-Bhartia has been awarded a letter of acceptance (LoA) by the Northeast Frontier Railway for construction of single line BG tunnel. The total estimated cost of the project is Rs 560.26 crore.

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