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Nifty above 18,300; Asian markets mixed

Published on Jan 17, 2022 11:28

The domestic equity barometers were currently trading near the day`s high in mid-morning trade. The Nifty was trading above the 18,300 mark. IT stocks advanced for the third consecutive session. Asian shares were mixed.

At 11:26 IST, the barometer index, the S&P BSE Sensex, was up 125.1 points or 0.20% to 61,348.13. The Nifty 50 index advanced 52.45 points or 0.29% to 18,308.20.

In broader market, the S&P BSE Mid-Cap index rose 0.37% while the S&P BSE Small-Cap index added 0.73%.

Buyers outpaced sellers. On the BSE, 2270 shares rose and 1180 shares fell. A total of 138 shares were unchanged.

Results Today:

UltraTech Cement (down 1.87%), Angel One (up 1.59%), Sonata Software (up 0.55%), Tata Steel Long Products (up 1.41%), Tatva Chintan Pharma Chemicals (up 0.52%), HFCL (up 5.39%), Maharashtra Scooters (up 0.63%), Bhansali Engineering Polymers (down 0.11%), Hathway Cable and Datacom (up 1.08%) and Moschip Technologies (up 5%) will announce their quarterly earnings today.

Buzzing Index:

The Nifty IT index rose 0.34% to 38,958.75. The index has gained 0.92% in three sessions.

TCS (up 1.53%), Infosys (up 1.17%), Wipro (up 1.13%), L&T Technology Services (up 0.76%) and Tech Mahindra (up 0.44%) advanced while Mphasis (down 0.72%), Coforge (down 0.49%) and Larsen & Toubro Infotech (down 0.45%) declined.

Shares of HCL Technologies tanked 5.47% to Rs 1264.40 on the BSE today after the company Q3 earnings disappointed on the margins front.

The IT major reported 5.4% rise in consolidated net profit to Rs 3,442 crore and revenue increased by 8.1% to Rs 22,331 crore in Q3 FY22 over Q2 FY22. It expects revenue to grow in double digits in constant currency, while EBIT margin is projected to be between 19% and 21% for FY22.

HCL reported flattish earnings before interest and tax (EBIT) margins of 19% at the company level while margins for services (IT services+ ER&D) were down 190 bps QoQ due to 80 bps impact of salary hike, -65 bps due to loss of days due to furlough, -85 bps on retention and bonus related, -40bps new customer investment, which was mitigated by +60 bps operating efficiencies and +20 bps currency tailwind, a domestic brokerage said in a result update.

"margins are expected to be under pressure for a few more quarters. We expect approximately 140 bps EBIT margin decline over FY21-24E," the brokerage firm reportedly added.

Meanwhile, Commerce and Industry Minister Piyush Goyal has said that the IT industry can play a key role in raising services exports to one trillion dollar per year in a decade. In the virtual meeting with the leaders of IT industry, Goyal said IT industry can become a bigger global player by focusing on new technologies. He said government will provide all help to IT firms to boost exports. The Minister said India was on track to achieve its merchandise exports target of $400 billion this year, while Services exports were likely to be about $250 billion.

Stocks in Spotlight:

Johnson Pharmacare hit an upper circuit limit of 5% at Rs 1.05 after the company said its board will consider bonus share issue on 18 February 2022.

Lagnam Spintex hit an upper circuit limit of Rs 10% to Rs 90.45 after the company`s net profit surged 107.05% to Rs 9.40 crore on 45.03% rise in net sales to Rs 90.95 crore in Q3 December 2021 over Q3 December 2020.

Renaissance Global jumped 5.04% to Rs 1019.75 after the company announced strategic licensing agreement for the National Football League (NFL) inspired branded jewellery in USA.

Global markets:

Asian stocks were mixed on Monday after the release of Chinese economic data.

China`s economy grew by 8.1% in 2021, and industrial production rose steadily through the end of the year and offset a drop off in retail sales, according to official data from China`s National Bureau of Statistics released on Monday. China`s gross domestic product grew by 2.2% in 2020 from the prior year.

China`s central bank on Monday cut the borrowing costs of its medium-term loans for the first time since April 2020. The People`s Bank of China (PBOC) said it was lowering the interest rate on 700 billion yuan ($110.19 billion) worth of one-year medium-term lending facility (MLF) loans to some financial institutions by 10 basis points to 2.85% from 2.95% in previous operations.

U.S. markets will remain closed today for Martin Luther King Jr. Day. New York Fed President John Williams, a key ally of Fed Chairman Jerome Powell, said Friday that he expects economic growth to slow in 2022 to a 3.5% annual rate, from an estimated 5.5% rate last year, on the spread of omicron.

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