Sensex jumps 548 pts, Nifty ends near 16,650 mark; pharma stocks rally

The domestic equity benchmarks ended with strong gains on Wednesday. After hitting the day`s low at 16,438.75 in early trade, the Nifty managed to stage a strong comeback and closed near the 16,650 mark. Strength was broad based, with pharma and healthcare stocks gaining the most. Investors remained cautious ahead of the US Fed`s forthcoming monetary policy decision, due to be announced Wednesday following a two-day meeting.

The barometer index, the S&P BSE Sensex, advanced 547.83 points or 0.99% to 55,816.32. The Nifty 50 index gained 157.95 points or 0.96% to 16,641.80.

In the broader market, the S&P BSE Mid-Cap index gained 0.90% while the S&P BSE Small-Cap index rose 0.38%.

The market breadth was positive. On the BSE, 1,686 shares rose and 1,635 shares fell. A total of 144 shares were unchanged.

Economy:

The International Monetary Fund (IMF) on Tuesday cut the global growth outlook and warned that the world may soon be on the brink of a recession. Global economic expansion will likely slow to 3.2% this year, slower than the 3.6% forecast by the fund in April, the IMF said.

The outlook for India has been revised down by 0.8% point, to 7.4%. For India, the revision reflects mainly less favourable external conditions and more rapid policy tightening, IMF stated. For emerging market and developing economies, the negative revisions to growth in 2022-23 reflect mainly the sharp slowdown of China`s economy and the moderation in India`s economic growth.

Numbers to Watch:

The yield on India`s 10-year benchmark federal paper declined to 7.341 as compared with 7.367 at close in the previous trading session.

In the foreign exchange market, the rupee was lower against the dollar. The partially convertible rupee was hovering at 79.92, compared with its close of 79.78 during the previous trading session.

MCX Gold futures for 5 August 2022 settlement rose 0.17% to Rs 50,672.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, declined 0.21 % to 106.96.

In the commodities market, Brent crude for September 2022 settlement rose 21 cents or 0.20% at $104.61 a barrel. The contract rose 75 cents or 0.71% to settle at $104.4 a barrel during the previous trading session.

Foreign Markets:

The Dow Jones futures were up 135 points, indicating a positive opening in the US stock market today.

Shares in Europe and Asia advanced on Wednesday. Investors looked forward to the Fed`s policy decision. At the end of its two-day monetary policy meeting on Wednesday, the Fed is widely expected to raise its main interest rate by 0.75 percentage points.

US stocks ended sharply lower Tuesday as a profit warning by Walmart dragged down retail shares and exceptionally weak consumer confidence data also fueled fears about spending.

The International Monetary Fund (IMF) has cut its gross domestic product (GDP) growth forecast for India for the current financial year by 80 basis points to 7.4%. A similar downgrade has been made to the growth forecast for FY24, which now stands at 6.1% as against 6.9% earlier.

"For India, the revision reflects mainly less favourable external conditions and more rapid policy tightening," the IMF said on July 26 in an update to its World Economic Outlook report.

The IMF on Tuesday cut its global GDP forecasts for 2022 and 2023. It now expects growth to come in at 3.2% this year, 0.4% points lower than its April projection.

German consumer sentiment is expected to slide to a record low in August as fears about diminishing gas supplies compound pressures from supply chain issues and the war in Ukraine.

Buzzing Segment:

The Nifty Pharma index rose 2.33% to 12,628.95. The index fell 2.91% in the past four sessions.

Glenmark Pharmaceuticals (up 4.16%), Sun Pharmaceutical Industries (up 3.18%), Zydus Lifesciences (up 2.9%), Aurobindo Pharma (up 2.82%), Divi`s Laboratories (up 2.63%), Alkem Laboratories (up 2.13%), Cipla (up 2.12%), Lupin (up 2.11%), Torrent Pharmaceuticals (up 1.86%), Abbot India (up 1.82%), Dr Reddy`s Laboratories (up 1.73%), Strides Pharma Science (up 1.66%), Biocon (up 1.48%), Granules India (up 1.45%), Pfizer (up 0.29%), Natco Pharma (up 0.22%) and Gland Pharma (up 0.02%) advanced.

Laurus Labs climbed 6.21%. The company`s PAT rose 4% to Rs 251 crore while revenue increased 20% to Rs 1,539 crore year-on-year in Q1 June 2022. EBITDA was at Rs 454 crore, increased by 14% Y-o-Y.

Performance driven by strong traction in Synthesis business (+196% YoY), and Other APIs which more than compensated for overall ARV business decline.

Stocks in Spotlight:

Maruti Suzuki India advanced 1.62%. The company`s net profit jumped 129.8% to Rs 1,012.8 crore on 50.52% rise in net sales to Rs 25,286.3 crore in Q1 FY23 over Q1 FY22. The auto major said that the performance in Q1 FY22 was affected by Covid related shutdowns and disruptions and hence a comparison of Q1 FY23 with Q1 FY22 is not on a like to like basis.

Colgate-Palmolive (India) rose 2.05%. The company reported a 10.1% decline in net profit to Rs 209.67 crore on 2.48% increase in revenue from operation to Rs 1,186.59 crore in Q1 FY23 over Q1 FY22.

Larsen & Toubro added 2.67%. The company reported 45% rise in consolidated net profit to Rs 1702 crore on 22% rise in total revenue to Rs 35853 crore in Q1 FY23 over Q1 FY22. The company secured orders worth Rs 41,805 crore at the group level during the quarter ended June 30, 2022, registering a growth of 57% over corresponding quarter of the previous year.

Tata Power Company fell 3.63%. On a consolidated basis, Tata Power Company`s net profit jumped 90% to Rs 884 crore on 43% increase in net sales to Rs 14,495.48 crore in Q1 FY23 over Q1 FY22.

Aditya Birla Sun Life AMC added 0.93%. The company`s consolidated net profit fell 33.6% to Rs 102.84 crore on 18.6% decline in total income to Rs 273.70 crore in Q1 FY23 over Q1 FY22. Total QAAUM including alternate assets stood at Rs 2,92,600 crore for the quarter ending 30 June 2022.

United Spirits tumbled 6.73%. The spirits maker`s standalone net profit surged 204.2% to Rs 210 crore on 34.3% increase in net sales to Rs 2,169 crore in Q1 June 2022 over Q1 June 2021.

Yes Bank rallied 7.14%. The bank said that its board will consider fund raising on Friday, 29 July 2022.

Shoppers Stop rallied 7.60%. The company reported a consolidated net profit of Rs 22.83 crore in Q1 FY23 as compared to a net loss of Rs 104.89 crore in Q1 FY22. Consolidated net sales surged to Rs 948.44 crore in the quarter ended 30 June 2022 from Rs 205.23 crore recorded in Q1 FY22.

Thirumalai Chemicals dropped 9.45%. The company`s consolidated net profit declined 7.77% to Rs 60.05 crore in Q1 FY23 as against Rs 65.11 crore posted in Q1 FY22. Revenue from operations surged 56.4% YoY to Rs 621.05 crore in the quarter ended 30 June 2022.

V-Guard Industries fell 2.63%. The company`s standalone net profit jumped 119.3% to Rs 54.02 crore on 80.1% increase in net revenue to Rs 1,009.64 crore in Q1 FY23 over Q1 FY22.

KEI Industries rose 1.14%. The company`s consolidated net profit jumped 54.6% to Rs 103.77 crore on 53.8% increase in revenue from operations to Rs 1,565.41 crore in Q1 FY23 over Q1 FY22.

Relaxo Footwears shed 0.69%. The footwear maker`s net profit rose 24.9% to Rs 38.67 crore on 34.2% increase in net sales to Rs 667.15 crore in Q1 FY23 Q1 FY22.

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