Sensex, Nifty trade flat; PSU banks in demand

The key equity indices are trading almost near flat line in mid morning trade, erasing early gains. The Nifty slipped below the 15,850 mark. Meanwhile, PSU bank stocks edged higher.

At 11:24 IST, the barometer index, the S&P BSE Sensex, was up 23.09 points or 0.04% to 52,875.36. The Nifty 50 index added 17.40 points or 0.11% to 15,841.85.

In the broader market, the S&P BSE Mid-Cap index gained 0.32% while the S&P BSE Small-Cap index rose 0.92%.

The market breadth was strong. On the BSE, 1996 shares rose and 1043 shares fell. A total of 144 shares were unchanged.

Economy:

The second wave of COVID-19 may have a more lasting damage on the Indian economy and exports will once again be the foundation for recovery, Moody`s Analytics said on Monday.

The Delta variant of COVID-19 is among factors now adversely affecting economies of the Asia-Pacific (APAC) region, but the economic hit from the current round of movement restrictions in the region will not be as severe as the recessions in the second quarter of last year.

In India, where exports make up relatively small shares of the economy, high commodity prices have boosted the value of exports. This is one factor that helped reinvigorate India after its first devastating wave of COVID-19.

Primary Market:

The initial public offer of bulk drug and contract manufacturer Glenmark Life Sciences received bids for 1.04 crore shares as against 1.50 crore shares on offer on Tuesday (27 July 2021), according to stock exchange data at 10:55 IST. The issue was subscribed 0.69 times.

The Retail Individual Investors (RIIs) category was subscribed 1.35 times, as it received bids for 1.02 crore shares as against 75.43 lakh shares reserved for them.

The issue opened for bidding on Tuesday (27 July 2021) and it will close Thursday (29 July 2021). The price band of the IPO was fixed at Rs 695-720 per share. An investor can bid for a minimum of 20 equity shares and in multiples thereof.

Buzzing Index:

The Nifty PSU Bank index rose 1.26% to 2,438.90. The index had declined 0.80% to end at 2,408.55 yesterday.

SBI (up 1.90%), Canara Bank (up 1.88%), UCO Bank (up 1.48%), Bank Of Baroda (up 0.94%) and Bank of India (up 0.84%) edged higher while Jammu and Kashmir Bank (down 0.63%) and Indian Overseas Bank (down 0.20%) lagged behind.

Earnings Impact:

DLF gained 2.62% to Rs 342.75 after the realty major posted a consolidated net profit of Rs 337 crore in Q1 FY22 as against a net loss of Rs 70.65 crore registered in Q1 FY21. Net sales jumped 107.7% to Rs 1,139.53 crore in Q1 FY22 from Rs 548.63 crore registered in Q1 FY21.

The company witnessed encouraging demand in the residential business. New sales bookings exhibited sustained performance sequentially and stood at Rs 1,014 crore, reflecting a 567% year on year growth. DLF registered new products sales booking of Rs 542 crore during the quarter. The luxury segment remains attractive, with Camellias witnessing sustained demand despite the resurgence of the pandemic.

Vedanta slipped 0.29% to Rs 270.70. The company`s consolidated net profit soared 247% to Rs 5,282 crore on a 79.2% jump in net sales to Rs 28,105 crore in Q1 June 2021 over Q1 June 2020.

Revenue for Q1 FY2022 was higher by 79.2% Y-o-Y (year-on-year), primarily due to improved commodity prices and higher volumes across businesses. The revenues for Q1 FY2022 was at Rs 28,105 crore, higher by 1% Q-o-Q (quarter-on-quarter), primarily due to improved commodity prices, partially offset by lower sales volume at Zinc India, Iron Ore & Steel and Copper business.

Global Markets:

Asian stocks were trading mostly higher on Tuesday even as several major Chinese tech stocks in Hong Kong remained under pressure following a Monday tumble. Investors continued to assess the steep losses incurred in Chinese stocks sparked by Beijing`s sweeping regulatory overhaul.

All three major US stock indexes eked out record closing highs for a second straight session on Monday as investors were optimistic heading into a slew of earnings from heavyweight technology and internet names this week, while caution ahead of a Federal Reserve policy meeting kept the market in check.

Investors will be watching the Federal Reserve`s two-day policy meeting, beginning Tuesday. The Federal Open Market Committee and the Board of Governors are expected to issue a statement on the stance of monetary policy Wednesday. On Thursday, the Commerce Department will report second-quarter gross domestic product data.

Meanwhile, on the data front, sales of new U.S. single-family homes dropped unexpectedly in June, falling 6.6% to a seasonally adjusted annual rate of 676,000 units, the Commerce Department said on Monday.

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