Sensex jumps 508 pts; cement stocks under pressure

The benchmark indices continued to trade with strong gain in mid-morning trade. The Nifty traded a tad below 16,750 mark. Shares of IT, oil & gas and financial services were in the green while auto, FMCG and healthcare stocks corrected.

At 11:30 IST, the barometer index, S&P BSE Sensex was up 508.02 points or 0.91% to 56,326.13. The Nifty 50 index rose 113.50 points or 0.68% to 16,741.50.

In the broader market, the S&P BSE Mid-Cap index fell 0.14% while the S&P BSE Small-Cap index added 0.17%.

The market breadth was positive. On the BSE, 1,810 shares rose while 1,290 shares fell. A total of 143 shares were unchanged.

Economy:

The seasonally adjusted S&P Global India Services PMI Business Activity Index stood at 58.9 in May, up from 57.9 in April. The latest figure indicated the fastest rate of expansion in over 11 years.

Meanwhile, the S&P Global India Composite PMI Output Index rose to 58.3 in May, from 57.6 in April. The latest figure pointed to the fastest rate of expansion since last November.

Buzzing Segment:

Cement stocks tumbled after UltraTech announced Rs 12,886 crore capex plan as competition grows in cement.

J.K Cement (down 6.24%), Shree Cements (down 4.17%),Ramco Cements (down 4.27 %), Sagar Cements (down 3.22 %), J K Lakshmi Cement (down 3.19%), Nuvoco Vistas Corp (down 1.75%), Deccan Cements (down 1.59%), Ambuja Cements (down 1.57%) and ACC (down 2.12%) tumbled.

Ultratech Cement fell 3.40%. The company said that its board has approved capex of Rs 12,886 crore towards increasing capacity by 22.6 MTPA, with a mix of brown field and green field expansion. This would be achieved by setting-up integrated and grinding units as well as bulk terminals. The additional capacity will be created across the country. The capex would be funded via a mix of debt and internal accruals.

Commercial production from these new capacities is expected to go on stream in a phased manner, by FY25. UltraTech`s current expansion program is on track and estimated to be completed by the end of FY23. Upon completion of the latest round of expansion, the company`s capacity will grow to 159.25 MTPA, reinforcing its position as the third largest cement company in the world, outside of China.

Stocks in Spotlight:

Adani Ports and Special Economic Zone fell 0.25% after the company said that it had handled a cargo volume of 30.37 MMT in May 2022, implying 4% YoY growth. Total coal volumes increased 6% YoY, on the back of thermal coal growth of 5% and coking coal by 9%. Despite record crude prices, volumes jumped 15% YoY. Key ports reflecting this volume growth are Mundra (7%), Dhamra (35%), Dahej (42%) and Kattupalli & Ennore combined (50%).

Angel One rose 0.95%. The stock broker`s client base stood at 10.10 million in May 2022 as against 4.84 million in the month of May 2021, registering a jump of nearly 109% year on year. Sequentially, the company`s client base rose by 4.7% month-on-month (MoM) last month from 9.64 million clients in April 2022. Gross client acquisition stood at 0.47 million in May 2022 compared with 0.44 million in April 2022 (up 6%) and 0.43 million in May 2021 (up 10.2%).

Angel`s overall average daily turnover (ADTO) was Rs 8,94,200 crore in May 2022 (down 5.7% month on month and up 88.2% year on year). The company`s ADTO from the F&O segment stood at Rs 8,72,900 crore, accounting for 97.61% of the overall ADTO during the month. The company`s F&O market share stood at 19.9% (down 151 bps month on month and down 388 bps year on year). Retail turnover market share in commodity segment was reported at 45.1% (up 184 bps month on month and up 1,915 bps year on year) in May 2022.

Global Markets:

Most Asian shares rose on Friday, following gains overnight on Wall Street. Investors are looking ahead to the release of U.S. jobs data for May. Markets in mainland China, Hong Kong and Taiwan are closed on Friday for a holiday.

In the US, the three major indices snapped two-day losing streaks. The S&P 500 jumped 1.84% to 4,176.82. The Dow Jones Industrial Average climbed 435.05 points, or 1.33%, to 33,248.28. The tech-heavy Nasdaq Composite surged 2.69% to 12,316.90.

Microsoft fell after the company warned of a hit to its profits from a stronger dollar. It cut its fourth-quarter forecasts for both profit and revenue.

In the commodities market, Brent crude for August 2022 settlement was down 9 cents or 0.08% at $117.52 a barrel. The Organization of the Petroleum Exporting Countries (OPEC) agreed on Thursday to pump more crude oil over the next two months as Russian production begins to drop because of Western sanctions.

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