Sensex gains 89 pts, Nifty ends at 17,397.50; IT, banks support; RIL drags

The headline equity indices ended with small gains on Friday. IT, banks and financial services stocks were in demand. On the other hand, auto, consumer durables and media stocks were under pressure. Weak European shares put pressure on domestic shares. Meanwhile, the Reserve Bank of India (RBI) increased the interest rate by 50 basis points to 5.4% and retained the FY23 GDP growth forecast at 7.2%.

The barometer index, the S&P BSE Sensex, rose 89.13 points or 0.15% to 58,387.93. The Nifty 50 index gained 15.50 points or 0.09% to 17,397.50.

Ultratech Cement (up 2.86%), ICICI Bank (up 2.26%), Bharti Airtel (up 1.30%), Infosys (up 1.06%), Axis Bank (up 0.9%) and Hindustan Unilever (up 0.6%) supported the indices.

Index heavyweight Reliance Industries (RIL) fell 1.46% to settle at Rs 2533.95.

The Nifty opened higher and traded with modest gains for most part of the session. It briefly slipped into the negative terrain to hit the day`s low of 17,348.75 in the mid-afternoon trade. It bounced back in late trade and ended with small gains.

In the broader market, the S&P BSE Mid-Cap index rose 0.09% while the S&P BSE Small-Cap index added 0.23%.

The market breadth was positive. On the BSE, 1,866 shares rose and 1,482 shares fell. A total of 161 shares were unchanged.

Economy:

The RBI`s Monetary Policy Committee (MPC) today (5 August 2022) hiked the policy repo rate under the liquidity adjustment facility (LAF) by 50 basis points to 5.40% with immediate effect.

Consequently, the standing deposit facility (SDF) rate stands adjusted to 5.15% and the marginal standing facility (MSF) rate and the Bank Rate to 5.65%.

The MPC has retained the real GDP growth projection for the ongoing financial year 2022-23 at 7.2% and the quarterly growth forecast figures in its policy outcome on Friday.

The committee has also maintained its retail inflation projection for the current financial year at 6.7%, which was revised from 5.7% in the preceding monetary policy review in June.

The MPC decided to remain focused on withdrawal of accommodation to ensure that inflation remains within the target going forward, while supporting growth.

RBI Governor Shaktikanta Das, while delivering the outcome of the bi-monthly policy meet, said, "Headline inflation has recently flattened and the supply outlook is improving, helped by some easing of global supply constraints.�

Numbers to Track:

The yield on India`s 10-year benchmark federal paper rose to 7.3159 as compared with 7.157 at close in the previous trading session.

In the foreign exchange market, the rupee advanced against the dollar. The partially convertible rupee was hovering at 79.23, compared with its close of 79.40 during the previous trading session.

MCX Gold futures for 5 October 2022 settlement declined 0.23% to Rs 52,046.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, added 0.19% to 105.89.

In the commodities market, Brent crude for October 2022 settlement rose 6 cents or 0.06% at $94.18 a barrel.

Global Markets:

European shares slumped while Asian stocks rose across the board on Friday as investors tracked corporate earnings and awaited a key U.S. jobs report.

The Bank of England on Thursday hiked interest rates by 50 basis points while forecasting U.K. inflation to peak above 13% in October and the economy to enter a prolonged recession in the fourth quarter.

Wall Street stocks ended mixed, with gains for high-growth stocks offset by the drag from energy shares, as a key US jobs report loomed on Friday.

Stocks in Spotlight:

Titan Company rose 0.39% after the branded jewellery maker reported a steep rise in its Q1 FY23 net profit at Rs 793 crore compared with Rs 61 crore in the same quarter last year. Total income for the quarter was Rs 8,649 crore, a growth of 199%, compared to Rs 2,890 crore of Q1 FY22 (excluding bullion sale). The company recorded one of the highest profit before taxes (PBT) of Rs 1,066 crore for the quarter in comparison to Rs 82 crore in Q1 FY22.

The company`s Jewellery business registered an income of Rs 7,600 crore in Q1 FY23 compared to Rs 2,467 crore in Q1 FY22 (excluding bullion sale), a growth of 208% riding on a good Akshaya Tritiya sales and a better studded mix compared to the same quarter previous year.

Mahindra & Mahindra (M&M) fell 2.04%. The automobile major reported 66.9% rise in standalone net profit to Rs 1,430 crore on a 66.7% jump in revenue to Rs 19,613 crore in Q1 FY23 over Q1 FY22. While the revenue from the Auto segment was Rs 12,306 crore (up 103.4% YoY), Farm Equipment Sector (FES) revenue was Rs 6,689 crore (up 25.8% YoY) in Q1 FY23. Total Vehicles sale in Q1 FY23 was 1,49,803 units, up 74% YoY. Total tractors sale rose by 18% YoY to 1,17,413 units during the period under review.

Berger Paints India added 0.58% after the company`s consolidated net profit increased by 80.60% to Rs 253.71 crore in Q1 FY23 from Rs 140.48 crore recorded in Q1 FY22. Revenue from operations for the quarter ended 30 June 2022 was Rs 2,759.70 crore as against Rs 1,798.49 crore in the corresponding quarter of the last year, representing an increase of 53.44% over the corresponding quarter of last year.

BEML declined 0.83% after the company reported a consolidated net loss of Rs 82.36 crore in Q1 FY23 as against a net loss of Rs 94.01 crore in Q1 FY22. Net sales during the quarter jumped 48.4% YoY to Rs 669.18 crore. The company`s order book stood at Rs 9,100 crore as on 30 June 2022 as against Rs 11,211 crore as 30 June 2021. The defense firm said it executed orders worth Rs 663 crore in quarter ended June 2022.

Adani Enterprises shed 0.94%. The company`s consolidated net profit jumped 72.9% to Rs 469.46 crore in Q1 FY23 as against Rs 271.46 crore in Q1 FY22. Net sales in the first quarter stood at Rs 40,844.25 crore, surged 224.7% from Rs 12,578.77 crore reported in the same period last year.

Separately, Adani Enterprises has signed a share purchase agreement with MAIF Investments India and MAIF Investments India 3 (collectively as "MAIF") in connection with its proposed acquisition of 100% stake in Swarna Tollway and 56.8% stake in Gujarat Road and Infrastructure Company.

Alkem Laboratories fell 1.42%. The company`s consolidated net profit declined 72.62% to Rs 131.45 crore on 5.7% decline in revenue from operations to Rs 2,576.38 crore in Q1 FY23 over Q1 FY22.

Balkrishna Industries tumbled 6.72% after the company reported 3% fall in standalone net profit to Rs 320 crore on a 21% increase in revenue from operations to Rs 2,646 crore in Q1 FY23 over Q1 FY22.

Bayer CropScience advanced 3.59% after the company`s net profit rose 19.3% to Rs 302.60 crore on 17.8% rise in net sales to Rs 1667.40 crore in Q1 June 2022 over Q1 June 2021.

Thomas Cook (India) rose 2.77% after the company`s consolidated net loss narrowed to Rs 5.87 crore in Q1 June 2022 as against net loss of Rs 83.43 crore in Q1 June 2021. Net sales surged 238.9% year-on-year to Rs 976.17 crore in Q1 June 2022. Net sales jumped 86.98% compared with Q4 FY22 (QoQ).

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