Nifty above 16,900; European shares advance

The benchmark indices climbed higher and hit a fresh intraday high in the afternoon trade. The Nifty traded above the 16,900 mark. IT, financial services and metal stocks advanced while healthcare and pharma stocks declined.

At 13:24 IST, the barometer index, the S&P BSE Sensex, was up 1,016 points or 1.82% to 56,832.71. The Nifty 50 index gained 274.30 points or 1.65% to 16,916.10.

In the broader market, the S&P BSE Mid-Cap index rose 0.86% while the S&P BSE Small-Cap index added 0.72%.

The market breadth was strong. On the BSE, 1,947 shares rose and 1,279 shares fell. A total of 168 shares were unchanged.

Investors cheered after the US Fed hinted at slowing down rate hikes going forward and rejected the speculation that the US economy is in recession.

Economy:

Union Cabinet has approved revival package of over Rs 1.64 Lakh crore for Bharat Sanchar Nigam (BSNL). It has also approved the merger of Bharat Broadband Network and BSNL.

Revival measures focus on infusing fresh capital for upgrading BSNL services, allocating spectrum, de-stressing its balance sheet, and augmenting its fiber network by merging Bharat Broadband Nigam Limited (BBNL) with BSNL.

With these measures, BSNL will be able to improve the quality of existing services, roll out 4G services and become financially viable. It is expected that with the implementation of this revival plan, BSNL will turn-around and earn profit in FY 2026-27.

Gainers & Losers:

Bajaj Finance (up 10.02%), Bajaj Finserv (up 9.38%), Tata Steel (up 5.47%), Nestle India (up 3.96%) and Indusind Bank (up 3.38%) were major Nifty gainers.

Dr Reddy`s Laboratories (down 1.26%), Bharti Airtel (down 0.90%), Shree Cements (down 0.71%), Hero MotoCorp (down 0.59%) and Tata Motors (down 0.53%) were majority Nifty losers.

Earnings Impact:

Bajaj Finserv surged 9.38% after the company`s consolidated net profit rose 57% to Rs 1,309 crore on a 14% rise in total income to Rs 15,888 crore in Q1 FY23 over Q1 FY22. The board of Bajaj Finserv has approved 5-for-1 stock split and 1:1 bonus issue of shares. The company will split each equity share of face value Rs 5 each into Rs 1 each. Later it will issue one fully paid bonus equity share of the face value of Rs 1 each against one equity share of the face value of Rs 1 each. This is subject to shareholders` approval.

Tata Motors fell 0.53%. The auto major reported consolidated net loss of Rs 5,006.60 crore in Q1 FY23 as against a net loss of Rs 4,450.92 crore in Q1 FY22. Revenue from operations increased 8.3% YoY to Rs 71,935 crore during the quarter ended 30 June 2022. EBITDA stood at Rs 5,307 crore in Q1 FY23. EBITDA margin in Q1 FY22 was 7.4%, down 90 bps.

Nestle India was up 3.96%. The FMCG major reported a 4.32% decline in net profit to Rs 515.34 crore on 16.1% rise in revenue from operations to Rs 4,036.57 crore in Q2 CY22 over Q2 CY21. Total sales jumped 15.7% year on year to Rs 4,007 crore in Q2 CY22 against Q2 CY21. Domestic sales and export sales for the quarter ended June 2022 increased by 16.4% and 0.66% respectively. Domestic sales growth is broad based with a healthy balance of pricing and volume & mix.

Bajaj Finance gained 10.02% after the NFBC`s consolidated net profit surged 158.99% to Rs 2,596.25 crore on 37.66% jump in total income to Rs 9,282.71 crore in Q1 FY23 over Q1 FY22. The company said it reported highest ever consolidated profit after tax in Q1 FY23. Profit before tax climbed 156.45% year on year to Rs 3,502.76 crore recorded in the quarter ended 30 June 2022.

Global Markets:

Shares in Europe and Asia were trading higher on Thursday following the U.S. Federal Reserve`s decision to raise rates by 75 basis points to fight inflation, a move that was widely expected.

US stocks rallied Wednesday after the Federal Reserve announced its much anticipated rate increase to fight inflation, but hinted that it could slow the pace of its hiking campaign at some point.

The Federal Reserve on Wednesday enacted its second consecutive 0.75 percentage point interest rate increase, taking its benchmark rate to a range of 2.25%-2.5%. The increase takes the funds rate to its highest level since December 2018.

Powell said in a press conference that the Fed could hike by 0.75 percentage point again in September, but that it would be dependent on the data.

�As the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases while we assess how our cumulative policy adjustments are affecting the economy and inflation,� he said.

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