Sensex climbs 86 pts, Nifty ends above 18,300

The domestic equity benchmarks ended with minor gains on Monday. The Nifty closed a tad above 18,300 mark. Auto and realty shares advanced while banks and financials stocks corrected.

The barometer index, the S&P BSE Sensex, gained 85.88 points or 0.14% to 61,308.91. The Nifty 50 index gained 52.35 points or 0.29% to 18,308.10.

TCS (up 1.26%), Larsen & Toubro (up 1.20), Infosys (up 0.58%) and Reliance Industries (up 0.54%) supported the indices.

In the broader market, the BSE Mid-Cap index rose 0.23% and the BSE Small-Cap index gained 0.61%.

The market breadth was strong. On the BSE, 2,297 shares rose and 1,308 shares fell. A total of 134 shares were unchanged.

COVID-19 Update:

In last 24 hours, India reported 2,58,089 fresh COVID cases, as per the health ministry`s data. The country reported 385 new deaths taking the death toll to 4,86,451. The country recorded 1,51,740 recoveries, taking the total number of recoveries to 3,52,37,461. The active cases comprise 4.43% of the total infections, while the national COVID-19 recovery rate has decreased to 94.27%, the ministry said.

Economy:

Finance Minister Nirmala Sitharaman held a pre-Budget stakeholder`s consultations with BJP`s State party representatives, on 16 January 2022. BJP National Spokesperson Gopal Krishna Agarwal said, representatives from 25 states participated in this discussion. The representations were from industries, professionals, business communities, academicians, economists, tribal communities, and backward classes and women.

Numbers to Watch:

The yield on 10-year benchmark federal paper rose to 6.637% as compared with 6.582% at close in the previous trading session.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 74.24, compared with its close of 74.15 during the previous trading session.

MCX Gold futures for 4 February 2022 settlement rose 0.22% to Rs 47,883.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, fell 0.03% to 95.14.

In the commodities market, Brent crude for March 2022 settlement fell 9 cents at $85.97 a barrel. The contract rose $1.59, or 1.88% to settle at $86.06 a barrel in the previous trading session.

Foreign Markets:

European stocks advanced while Asian stocks ended mixed on Monday as investors digested a string of corporate news and the latest growth data out of China.

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.

Investors kept an eye on the latest Eurogroup meeting of finance ministers in Brussels. Data releases in Europe on Monday include final inflation data for the euro zone in December.

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.

Buzzing Index:

The Nifty Auto index rose 2.05% to 11,881.25. The index declined 0.37% on Friday.

Tata Motors (up 2.92%), Mahindra & Mahindra (up 2.1%), Bajaj Auto (up 1.61%), Ashok Leyland (up 1.2%) and Eicher Motors (up 0.72%) advanced.

Hero MotoCorp jumped 5.11%. The two-wheeler maker said that its board has approved an investment of up to Rs 420 crore in one or more tranches, in Ather Energy.

Maruti Suzuki India gained 2.08%. The car major announced price change across models owing to increase in various input costs. The weighted average price increase in ex-showroom prices (Delhi) across models is 1.7%. The new prices are effective from Saturday, 15 January 2022.

Stocks in Spotlight:

Sonata Software rose 0.5%. On a consolidated basis, the IT company posted a 7.1% rise in net profit to Rs 97.67 crore on a 93% rise in revenue from operations to Rs 1,858.02 crore in Q3 FY22 over Q2 FY22. As compared to Q3 FY21, the IT firm`s net profit surged 81.5% while revenue from operations in Q3 FY22 jumped 33%.

Profit before tax rose by 7.85% quarter on quarter and 30% year on year to Rs 129.59 crore in Q3 FY22. EBITDA grew by 8% quarter on quarter and 29% year on year to Rs 146.9 crore in Q3 FY22.

Fineotex Chemical surged 6.42% after the company`s consolidated net profit jumped 41.13% to Rs 18.46 crore on 80.04% increase in net sales to Rs 105.07 crore in Q3 December 2021 over Q3 December 2020. Operational EBIDTA for the quarter has increased 84.14% to Rs 25.08 crore from Rs 13.62 crore on Y-o-Y basis.

Ultratech Cement added 2.78%. On a consolidated basis, the cement major`s net profit rose 7.83% to Rs 1,708 crore on 4.66% increase in net sales to Rs 12,710 crore in Q3 December 2021 over Q3 December 2020. There is a one-time gain of Rs 535 crore in tax for earlier years. During the quarter, profit before tax (PBT) tumbled 29.93% year-on-year to Rs 1,634 crore. Profit Before Interest, Depreciation & Taxes (PBIDT) fell 25.94% to Rs 2,490 crore during the period under review.

HDFC Bank fell 1.53%. The private sector bank`s net profit rose 18.08% to Rs 10,342.20 crore on 8.33% increase in total income to Rs 40,651.60 crore in Q3 December 2021 over Q3 December 2020. The bank`s provisions and contingencies (excluding tax provisions) fell 12.30% to Rs 2,993.98 crore in Q3 December 2021 over Rs 3,414.13 crore in Q3 December 2020.

HCL Technologies slumped 5.89%. 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. HCL Tech 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.

Bhansali Engineering Polymers (BEPL) slumped 9.19%. The company posted a 44.4% decline in consolidated net profit to Rs 75.71 crore on a 17% fall in revenue from operations to Rs 341.52 crore in Q3 FY22 over Q3 FY21.

Metro Brands surged 19.46% after the company posted a 54.6% rise in consolidated net profit to Rs 100.85 crore on a 59% jump in net sales to Rs 483.77 crore in Q3 FY22 over Q3 FY21.

Gujarat Ambuja Exports jumped 7.37%. The company announced its decision to setup a greenfield corn wet milling plant at Sitarganj, Uttaranchal (Uttarakhand).

Ajmera Realty & Infra India hit an upper circuit limit of 5% at Rs 429.30 after the company said it will develop residential project at Wadala (Mumbai) with an estimated sales value of Rs 1500 crore.

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